LOAN AND SECURITY AGREEMENT Dated as of March 31, 2006
MODTECH
HOLDINGS, INC.,
as
Borrower
Dated
as
of March 31, 2006
$25,000,000
CERTAIN
FINANCIAL INSTITUTIONS,
as
Lenders
and
BANK
OF AMERICA, N.A.,
as
Agent
TABLE
OF CONTENTS
Page | ||
SECTION
1.
|
DEFINITIONS;
RULES OF CONSTRUCTION
|
1
|
1.1
|
Definitions
|
1
|
1.2
|
Accounting
Terms
|
24
|
1.3
|
Certain
Matters of Construction
|
24
|
SECTION
2.
|
CREDIT
FACILITIES
|
25
|
2.1
|
Revolver
Commitment
|
25
|
2.2
|
[Intentionally
Omitted]
|
27
|
2.3
|
Letter
of Credit Facility
|
27
|
SECTION
3.
|
INTEREST,
FEES AND CHARGES
|
29
|
3.1
|
Interest
|
29
|
3.2
|
Fees
|
31
|
3.3
|
Computation
of Interest, Fees, Yield Protection
|
32
|
3.4
|
Reimbursement
Obligations
|
32
|
3.5
|
Illegality
|
32
|
3.6
|
Increased
Costs
|
33
|
3.7
|
Capital
Adequacy
|
34
|
3.8
|
Mitigation
|
34
|
3.9
|
Funding
Losses
|
34
|
3.10
|
Maximum
Interest
|
34
|
SECTION
4.
|
LOAN
ADMINISTRATION
|
35
|
4.1
|
Manner
of Borrowing and Funding Revolver Loans
|
35
|
4.2
|
Defaulting
Lender
|
37
|
4.3
|
Number
and Amount of LIBOR Loans; Determination of Rate
|
37
|
4.4
|
Borrower
Agent
|
37
|
4.5
|
One
Obligation
|
38
|
4.6
|
Effect
of Termination
|
38
|
SECTION
5.
|
PAYMENTS
|
38
|
5.1
|
General
Payment Provisions
|
38
|
5.2
|
Repayment
of Revolver Loans
|
38
|
5.3
|
[Intentionally
Omitted]
|
39
|
5.4
|
Payment
of Other Obligations
|
39
|
5.5
|
Marshaling;
Payments Set Aside
|
39
|
5.6
|
Post-Default
Allocation of Payments
|
39
|
5.7
|
Application
of Payments
|
40
|
5.8
|
Loan
Account; Account Stated
|
40
|
5.9
|
Taxes
|
40
|
5.10
|
Withholding
Tax Exemption
|
41
|
5.11
|
Nature
and Extent of Each Borrower’s Liability
|
41
|
ii
(continued)
Page | ||
SECTION
6.
|
CONDITIONS
PRECEDENT
|
44
|
6.1
|
Conditions
Precedent to Initial Loans
|
44
|
6.2
|
Conditions
Precedent to All Credit Extensions
|
45
|
6.3
|
Limited
Waiver of Conditions Precedent
|
46
|
6.4
|
Conditions
Subsequent
|
46
|
SECTION
7.
|
COLLATERAL
|
46
|
7.1
|
Grant
of Security Interest
|
46
|
7.2
|
Lien
on Deposit Accounts; Cash Collateral
|
47
|
7.3
|
Real
Estate Collateral
|
48
|
7.4
|
Other
Collateral
|
48
|
7.5
|
No
Assumption of Liability
|
49
|
7.6
|
Further
Assurances
|
49
|
7.7
|
Foreign
Subsidiary Stock
|
49
|
SECTION
8.
|
COLLATERAL
ADMINISTRATION
|
49
|
8.1
|
Borrowing
Base Certificates
|
49
|
8.2
|
Administration
of Accounts
|
49
|
8.3
|
Administration
of Inventory
|
50
|
8.4
|
Administration
of Equipment
|
51
|
8.5
|
Administration
of Deposit Accounts
|
51
|
8.6
|
General
Provisions
|
52
|
8.7
|
Power
of Attorney
|
53
|
SECTION
9.
|
REPRESENTATIONS
AND WARRANTIES
|
54
|
9.1
|
General
Representations and Warranties
|
54
|
9.2
|
Complete
Disclosure
|
60
|
SECTION
10.
|
COVENANTS
AND CONTINUING AGREEMENTS
|
60
|
10.1
|
Affirmative
Covenants
|
60
|
10.2
|
Negative
Covenants
|
63
|
10.3
|
Financial
Covenants
|
68
|
SECTION
11.
|
EVENTS
OF DEFAULT; REMEDIES ON DEFAULT
|
68
|
11.1
|
Events
of Default
|
68
|
11.2
|
Remedies
upon Default
|
70
|
11.3
|
License
|
71
|
11.4
|
Setoff
|
71
|
11.5
|
Remedies
Cumulative; No Waiver
|
71
|
SECTION
12.
|
AGENT
|
72
|
12.1
|
Appointment,
Authority and Duties of Agent
|
72
|
12.2
|
Agreements
Regarding Collateral and Field Examination Reports
|
73
|
iii
TABLE
OF CONTENTS
(continued)
Page | ||
12.3
|
Reliance
By Agent
|
74
|
12.4
|
Action
Upon Default
|
74
|
12.5
|
Ratable
Sharing
|
74
|
12.6
|
Indemnification
of Agent Indemnitees
|
75
|
12.7
|
Limitation
on Responsibilities of Agent
|
75
|
12.8
|
Successor
Agent and Co-Agents
|
76
|
12.9
|
Due
Diligence and Non-Reliance
|
76
|
12.10
|
Replacement
of Certain Lenders
|
77
|
12.11
|
Remittance
of Payments and Collections
|
77
|
12.12
|
Agent
in its Individual Capacity
|
78
|
12.13
|
Agent
Titles
|
78
|
12.14
|
No
Third Party Beneficiaries
|
78
|
SECTION
13.
|
BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
|
78
|
13.1
|
Successors
and Assigns
|
78
|
13.2
|
Participations
|
79
|
13.3
|
Assignments
|
79
|
13.4
|
Tax
Treatment
|
80
|
13.5
|
Representation
of Lenders
|
80
|
SECTION
14.
|
MISCELLANEOUS
|
80
|
14.1
|
Consents,
Amendments and Waivers
|
80
|
14.2
|
Indemnity
|
81
|
14.3
|
Notices
and Communications
|
81
|
14.4
|
Performance
of Borrowers’ Obligations
|
82
|
14.5
|
Credit
Inquiries
|
82
|
14.6
|
Severability
|
82
|
14.7
|
Cumulative
Effect; Conflict of Terms
|
83
|
14.8
|
Counterparts;
Facsimile Signatures
|
83
|
14.9
|
Entire
Agreement
|
83
|
14.10
|
Obligations
of Lenders
|
83
|
14.11
|
Confidentiality
|
83
|
14.12
|
[Intentionally
Omitted]
|
84
|
14.13
|
GOVERNING
LAW
|
84
|
14.14
|
Consent
to Forum; Arbitration
|
84
|
14.15
|
Waivers
by Borrowers
|
85
|
14.16
|
Patriot
Act Notice
|
86
|
iv
TABLE
OF CONTENTS
(continued)
LIST
OF EXHIBITS AND
SCHEDULES
Exhibit
A
|
Assignment
and Acceptance
|
Exhibit
B
|
Assignment
Notice
|
Schedule
1.1
|
Commitments
of Lenders
|
Schedule
8.5
|
Deposit
Accounts
|
Schedule
8.6.1
|
Business
Locations
|
Schedule
9.1.4
|
Names
and Capital Structure
|
Schedule
9.1.5
|
Former
Names and Companies
|
Schedule
9.1.8
|
Disclosed
Losses
|
Schedule
9.1.10
|
Taxes
Owed by Subsidiaries
|
Schedule
9.1.12
|
Patents,
Trademarks, Copyrights and Licenses
|
Schedule
9.1.15
|
Environmental
Matters
|
Schedule
9.1.16
|
Restrictive
Agreements
|
Schedule
9.1.17
|
Litigation
|
Schedule
9.1.19
|
Pension
Plans
|
Schedule
9.1.21
|
Labor
Contracts
|
Schedule
10.2.2
|
Existing
Liens
|
Schedule
10.2.17
|
Existing
Affiliate Transactions
|
v
THIS
LOAN AND SECURITY AGREEMENT
is dated
as of March 31, 2006, among MODTECH HOLDINGS, INC., a Delaware corporation
(“Borrower
Agent”)
and
those Subsidiaries of Borrower Agent set forth on the signature pages hereto
or
which hereafter become parties hereto (individually, a “Borrower”
and
collectively, “Borrowers”),
the
financial institutions party to this Agreement from time to time as lenders
(collectively, “Lenders”),
and
BANK
OF AMERICA, N.A.,
a
national banking association, as agent for the Lenders (“Agent”).
R
E C I T A L S:
Borrowers
have requested that Lenders make available a credit facility, to be used by
Borrowers to finance their mutual and collective business enterprise. Lenders
are willing to provide such credit facility on the terms and conditions set
forth in this Agreement.
NOW,
THEREFORE, for valuable consideration hereby acknowledged, the parties agree
as
follows:
SECTION
1.
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions.
As used
herein, the following terms have the meanings set forth below:
Account
- as
defined in the UCC, including all rights to payment for goods sold or leased,
or
for services rendered.
Account
Debtor
- a
Person who is obligated under an Account, Chattel Paper or General
Intangible.
Accounts
Formula Amount
- 85% of
the Value of Eligible Accounts; provided,
however,
that
such percentage shall be reduced by two-tenths of one percent for each one-tenth
of one percent that the Dilution Percent exceeds 7.5%.
Adjusted
LIBOR
- for
any Interest Period, with respect to LIBOR Loans, the per annum rate of interest
(rounded upward, if necessary, to the nearest 1/8th of 1%) appearing on Telerate
Page 3750, or if such page is unavailable, the Reuters Screen LIBO Page (or
any
successor page of either, as applicable), as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided,
however,
if the
Reuters Screen LIBO Page is used and more than one rate is shown on such page,
the applicable rate shall be the arithmetic mean thereof. If for any reason
none
of the foregoing rates is available, the Offshore Base Rate shall be the rate
per annum determined by Agent as the rate of interest at which Dollar deposits
in the approximate amount of the applicable LIBOR Loan would be offered to
major
banks in the offshore Dollar market at or about 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If the Board of Governors shall impose
a
Reserve Percentage with respect to LIBOR deposits, then Adjusted LIBOR shall
equal the amount determined above, divided by 1 minus the Reserve
Percentage.
1
Affiliate
- with
respect to any Person, another Person (a) who directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such first Person; (b) who beneficially owns 10% or more of the
voting securities or any class of Equity Interests of such first Person; (c)
at
least 10% of whose voting securities or any class of Equity Interests is
beneficially owned, directly or indirectly, by such first Person; or (d) who
is
an officer, director, partner or managing member of such first Person.
“Control”
means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through ownership
of Equity Interests, by contract or otherwise.
Agent
Indemnitees
- Agent
and its officers, directors, employees, Affiliates, agents and
attorneys.
Agent
Professionals
-
attorneys, accountants, appraisers, auditors, business valuation experts,
environmental engineers or consultants, turnaround consultants, and other
professionals and experts retained by Agent.
Allocable
Amount
- as
defined in Section
5.11.3.
Anti-Terrorism
Laws
- any
laws relating to terrorism or money laundering, including the Patriot
Act.
Applicable
Law
- all
laws, rules, regulations and governmental guidelines applicable to the Person,
conduct, transaction, agreement or matter in question, including all applicable
statutory law, common law and equitable principles, and all provisions of
constitutions, treaties, statutes, rules, regulations, orders and decrees of
Governmental Authorities.
Applicable
Margin
- with
respect to any Type of Loan, the margin set forth below, as determined by the
EBITDA (measured on the first day of each Fiscal Quarter, on a trailing 12
month
basis) for the immediately preceding Fiscal Quarter:
Level
|
EBITDA
|
Base
Rate Revolver Loans
|
LIBOR
Revolver Loans
|
|||||||
I
|
|
<
10,000,000
|
0.75
|
%
|
3.00
|
%
|
||||
II
|
|
>10,000,000
and < $12,000,000
|
0.50
|
%
|
2.75
|
%
|
||||
III
|
|
>12,000,000
and < $15,000,000
|
0.25
|
%
|
2.50
|
%
|
||||
IV
|
|
>15,000,000
and < $25,000,000
|
0.00
|
%
|
2.25
|
%
|
||||
V
|
|
≥
25,000,000
|
0.00
|
%
|
2.00
|
%
|
||||
Until
October 1, 2006, margins shall be determined as if Level III were applicable.
Effective October 1, 2006, the margins shall be subject to increase or decrease
based on the EBITDA (measured on a trailing 12 month basis) as set forth in
the
financial statements and corresponding Compliance Certificate for the
immediately preceding Fiscal Quarter, which change shall be effective on the
first Business Day of the calendar month that occurs more than 10 days following
receipt. If, by the first Business Day of a month following any Fiscal Quarter,
any financial statements and Compliance Certificate due in the preceding month
have not been received, then the margins shall be determined as if Level I
were
applicable, from such day until the first Business Day of the Fiscal Quarter
following actual receipt.
2
To
the
extent that at any time of determination the aggregate amount of outstanding
Obligations exceeds an amount equal to the sum of the Eligible Accounts
Component and Eligible Inventory Component at such time (as determined by
Agent), then such excess shall bear interest at a rate per annum equal to the
rate of interest otherwise applicable as set forth in this definition, plus
0.25%.
Approved
Fund
- any
Person (other than a natural person) that is engaged in making, holding or
investing in extensions of credit in its ordinary course of business and is
administered or managed by a Lender, an entity that administers or manages
a
Lender, or an Affiliate of either.
Asset
Disposition
- a
sale, lease, license, consignment, transfer or other disposition of Property
of
an Obligor, including a disposition of Property in connection with a
sale-leaseback transaction or synthetic lease.
Assignment
and Acceptance
- an
assignment agreement between a Lender and Eligible Assignee, in the form of
Exhibit
A.
Availability
-
determined as of any date, the amount that Borrowers are entitled to borrow
as
Revolver Loans, being the Borrowing Base minus the principal balance of all
Revolver Loans.
Availability
Reserve
- the
sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges
Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) the aggregate
amount of liabilities secured by Liens upon Collateral that are senior to
Agent’s Liens (but imposition of any such reserve shall not waive an Event of
Default arising therefrom); (f) the Payable Reserve; and (g) such additional
reserves, in such amounts and with respect to such matters, as Agent in its
discretion may elect to impose from time to time.
Bank
of America
- Bank
of America, N.A., a national banking association, and its successors and
assigns.
Bank
of America Indemnitees
- Bank
of America and its officers, directors, employees, Affiliates, agents and
attorneys.
Bank
Product
- any of
the following products, services or facilities extended to any Borrower or
Subsidiary by Bank of America or any of its Affiliates: (a) Cash Management
Services; (b) products under Hedging Agreements; (c) commercial credit card
and
merchant card services; and (d) other banking products or services as may be
requested by any Borrower or Subsidiary, other than Letters of
Credit.
3
Bank
Product Debt
- Debt
and other obligations of an Obligor relating to Bank Products.
Bank
Product Reserve
- the
aggregate amount of reserves established by Agent from time to time in its
discretion in respect of Bank Product Debt.
Bankruptcy
Code
- Title
11 of the United States Code.
Base
Rate
- the
rate of interest announced by Bank of America from time to time as its prime
rate. Such rate is a reference rate only and Bank of America may make loans
or
other extensions of credit at, above or below it. Any change in the prime rate
announced by Bank of America shall take effect at the opening of business on
the
effective date specified in the public announcement of the change.
Base
Rate Loan
- any
Loan that bears interest based on the Base Rate.
Base
Rate Revolver Loan
- a
Revolver Loan that bears interest based on the Base Rate.
Board
of Governors
- the
Board of Governors of the Federal Reserve System.
Bonded
Accounts
-
Accounts of a Borrower, arising in the ordinary course of business of the
Borrower with respect to a contract which requires the Borrower to have a bond
posted on its behalf to secure the Borrower’s performance of such contract.
Borrowed
Money
- with
respect to any Obligor, without duplication, its (a) Debt that (i) arises from
the lending of money by any Person to such Obligor, (ii) is evidenced by notes,
drafts, bonds, debentures, credit documents or similar instruments, (iii)
accrues interest or is a type upon which interest charges are customarily paid
(excluding trade payables owing in the Ordinary Course of Business), or (iv)
was
issued or assumed as full or partial payment for Property; (b) Capital Leases;
(c) reimbursement obligations with respect to letters of credit; and (d)
guaranties of any Debt of the foregoing types owing by another
Person.
Borrower
Agent
- as
defined in the Recitals to this Agreement.
Borrowing
- a
group of Loans of one Type that are made on the same day or are converted into
Loans of one Type on the same day.
Borrowing
Base
- on any
date of determination, an amount equal to the lesser of (a) the aggregate amount
of Revolver Commitments, minus
the LC
Reserve; or (b) the sum of the Accounts Formula Amount, plus
the
Inventory Formula Amount, plus,
the
Fixed Asset Formula Amount, minus
the
Availability Reserve.
4
Borrowing
Base Certificate
- a
certificate, in form and substance satisfactory to Agent, by which Borrowers
certify calculation of the Borrowing Base.
Business
Day
- any
day (a) excluding Saturday, Sunday and any other day on which banks are
permitted to be closed under the laws of the States of North Carolina and
California; and (b) when used with reference to a LIBOR Loan, also excluding
any
day on which banks do not conduct dealings in Dollar deposits on the London
interbank market.
Capital
Adequacy Regulation
- any
law, rule, regulation, guideline, request or directive of any central bank
or
other Governmental Authority, whether or not having the force of law, regarding
capital adequacy of a bank or any Person controlling a bank.
Capital
Expenditures
- all
liabilities incurred, expenditures made or payments due (whether or not made)
by
a Borrower or Subsidiary for the acquisition of any fixed assets, or any
improvements, replacements, substitutions or additions thereto with a useful
life of more than one year, including the principal portion of Capital
Leases.
Capital
Lease
- any
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP.
Cash
Collateral
- cash,
and any interest or other income earned thereon, that is delivered to Agent
to
Cash Collateralize any Obligations.
Cash
Collateral Account
- a
demand deposit, money market or other account established by Agent at such
financial institution as Agent may select in its discretion, which account
shall
be subject to Agent’s Liens for the benefit of Secured Parties.
Cash
Collateralize
- the
delivery of cash to Agent, as security for the payment of Obligations, in an
amount equal to (a) with respect to LC Obligations, 105% of the aggregate LC
Obligations, and (b) with respect to any inchoate or contingent Obligations
(including Obligations arising under Bank Products), Agent’s good faith estimate
of the amount due or to become due, including all fees and other amounts
relating to such Obligations. “Cash
Collateralization”
has
a
correlative meaning.
Cash
Equivalents
- (a)
marketable obligations issued or unconditionally guaranteed by, and backed
by
the full faith and credit of, the United States government, maturing within
12
months of the date of acquisition; (b) certificates of deposit, time deposits
and bankers’ acceptances maturing within 12 months of the date of acquisition,
and overnight bank deposits, in each case which are issued by a commercial
bank
organized under the laws of the United States or any state or district thereof,
rated A-1 (or better) by S&P or P-1 (or better) by Xxxxx’x at the time of
acquisition, and (unless issued by a Lender) not subject to offset rights;
(c)
repurchase obligations with a term of not more than 30 days for underlying
investments of the types described in clauses (a) and (b) entered into with
any
bank meeting the qualifications specified in clause (b); (d) commercial paper
rated A-1 (or better) by S&P or P-1 (or better) by Xxxxx’x, and maturing
within nine months of the date of acquisition; and (e) shares of any money
market fund that has substantially all of its assets invested continuously
in
the types of investments referred to above, has net assets of at least
$500,000,000 and has the highest rating obtainable from either Xxxxx’x or
S&P.
5
Cash
Management Services
- any
services provided from time to time by Bank of America or any of its Affiliates
to any Borrower or Subsidiary in connection with operating, collections,
payroll, trust, or other depository or disbursement accounts, including
automatic clearinghouse, controlled disbursement, depository, electronic funds
transfer, information reporting, lockbox, stop payment, overdraft and/or wire
transfer services.
CERCLA
- the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C.
Sec. 9601 et seq.).
Chattel
Paper
- as
defined in the UCC.
Claims
- all
liabilities, obligations, losses, damages, penalties, judgments, proceedings,
costs and expenses of any kind (including remedial response costs, reasonable
attorneys’ fees and Extraordinary Expenses) at any time (including after Full
Payment of the Obligations, resignation or replacement of Agent, or replacement
of any Lender) incurred by or asserted against any Indemnitee in any way
relating to (a) any Loan Documents or transactions relating thereto, (b) any
action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) failure by any Obligor to perform or observe
any terms of any Loan Document, in each case including all costs and expenses
relating to any investigation, litigation, arbitration or other proceeding
(including an Insolvency Proceeding or appellate proceedings), whether or not
the applicable Indemnitee is a party thereto.
Closing
Date
- as
defined in
Section 6.1.
Collateral
- all
Property described in Section
7.1,
all
Property described in any Security Documents as security for any Obligations,
and all other Property that now or hereafter secures (or is intended to secure)
any Obligations.
Commercial
Tort Claim
- as
defined in the UCC.
Commitment
- for
any Lender, the amount of such Lender’s Revolver Commitment. “Commitments”
means
the aggregate amount of all Revolver Commitments.
Commitment
Termination Date
- the
earliest to occur of (a) the Revolver Termination Date; (b) the date on which
Borrowers terminate the Revolver Commitments pursuant to Section
2.1.4;
or (c)
the date on which the Revolver Commitments are terminated pursuant to
Section
11.2.
Compliance
Certificate
- a
certificate, in form and substance satisfactory to Agent, by which Borrowers
certify compliance with Sections
10.2.3
and
10.3
and
calculate the applicable Level for the Applicable Margin.
6
Contingent
Obligation
- any
obligation of a Person arising from a guaranty, indemnity or other assurance
of
payment or performance of any Debt, lease, dividend or other obligation
(“primary
obligations”)
of
another obligor (“primary
obligor”)
in any
manner, whether directly or indirectly, including any obligation of such Person
under any (a) guaranty, endorsement, co-making or sale with recourse of an
obligation of a primary obligor; (b) obligation to make take-or-pay or similar
payments regardless of nonperformance by any other party to an agreement; and
(c) arrangement (i) to purchase any primary obligation or security therefor,
(ii) to supply funds for the purchase or payment of any primary obligation,
(iii) to maintain or assure working capital, equity capital, net worth or
solvency of the primary obligor, (iv) to purchase Property or services for
the
purpose of assuring the ability of the primary obligor to perform a primary
obligation, or (v) otherwise to assure or hold harmless the holder of any
primary obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be the stated or determinable amount of the
primary obligation (or, if less, the maximum amount for which such Person may
be
liable under the instrument evidencing the Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability with
respect thereto.
CWA
- the
Clean Water Act (33 U.S.C. Sec.Sec. 1251 et seq.).
Debt
- as
applied to any Person, without duplication, (a) all items that would be included
as liabilities on a balance sheet in accordance with GAAP, including Capital
Leases, but excluding trade payables incurred and being paid in the Ordinary
Course of Business; (b) all Contingent Obligations; (c) all reimbursement
obligations in connection with letters of credit issued for the account of
such
Person; and (d) in the case of a Borrower, the Obligations. The Debt of a Person
shall include any recourse Debt of any partnership in which such Person is
a
general partner or joint venturer.
Default
- an
event or condition that, with the lapse of time or giving of notice, would
constitute an Event of Default.
Default
Rate
- for
any Obligation (including, to the extent permitted by law, interest not paid
when due), 2% plus the interest rate otherwise applicable thereto.
Deposit
Account
- as
defined in the UCC.
Deposit
Account Control Agreements
- the
Deposit Account control agreements to be executed by each institution
maintaining a Deposit Account for a Borrower, in favor of Agent, for the benefit
of Secured Parties, as security for the Obligations.
Dilution
Percent
- the
percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad
debt write-downs or write-offs, discounts, returns, promotions, credits, credit
memos and other dilutive items with respect to Accounts, divided by
(b)
gross sales.
Distribution
- any
declaration or payment of a distribution, interest or dividend on any Equity
Interest (other than payment-in-kind); any distribution, advance or repayment
of
Debt to a holder of Equity Interests; or any purchase, redemption, or other
acquisition or retirement for value of any Equity Interest.
7
Document
- as
defined in the UCC.
Dollars
- lawful
money of the United States.
Dominion
Account
- a
special account established by Borrowers at Bank of America or another bank
acceptable to Agent, over which Agent has exclusive control for withdrawal
purposes.
EBITDA
-
determined on a consolidated basis for Borrowers and Subsidiaries, net income,
calculated before interest expense, provision for income taxes, depreciation
and
amortization expense, gains or losses arising from the sale of capital assets,
gains arising from the write-up of assets, non-cash gains or losses, and any
extraordinary gains (in each case, to the extent included in determining net
income).
Eligible
Account
- an
Account owing to a Borrower that arises in the Ordinary Course of Business
from
the sale of goods, is
payable in Dollars and is deemed by Agent, in its discretion, to be an Eligible
Account. Without limiting the foregoing, no Account shall be an Eligible Account
if (a) it is a Bonded Account, (b) it is unpaid for more than
60 days
after the original due date, or more than 90 days
after the original invoice date; (c) 50% or more of the Accounts owing by
the Account Debtor are not Eligible Accounts under the foregoing clause (b);
(d) when aggregated with other Accounts owing by the Account Debtor, it
exceeds 15% of
the
aggregate Eligible Accounts (or such higher percentage as Agent may establish
for the Account Debtor from time to time, including, but not limited to Xxxxxxxx
Scottsman and Resun Leasing with respect to each of which such percentage shall
be 30%); (e) it does not conform with a covenant or representation herein;
(f) it is owing by a creditor or supplier, or is otherwise subject to a
counterclaim, dispute, deduction, discount, recoupment, reserve, defense,
chargeback, credit or allowance (but ineligibility shall be limited to the
amount thereof) or a potential offset; (g) an Insolvency Proceeding has
been commenced by or against the Account Debtor; or the Account Debtor has
failed, has suspended or ceased doing business, is liquidating, dissolving
or
winding up its affairs, or is not Solvent; (h) the Account Debtor is
organized or has its principal offices or assets outside the United States
or
Canada; (i) it is owing by a Government Authority, unless (1) otherwise
approved by Agent (as of the Closing Date, for the purposes of this subsection
(i) Agent has approved Accounts owing by any Governmental Authority which is
a
school district in the States of Florida or California), or (2) the Account
Debtor is the United States or any department, agency or instrumentality thereof
and the Account has been assigned to Agent in compliance with the Assignment
of
Claims Act; (j) it is not subject to a duly perfected, first priority Lien
in favor of Agent, or is subject to any other Lien other than the Lien arising
under the Existing Subordinated Debt Documents; (k) except as set forth in
subsection (n) below, the goods giving rise to it have not been delivered to
and
accepted by the Account Debtor, the services giving rise to it have not been
accepted by the Account Debtor, or it otherwise does not represent a final
sale;
(l) it is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; (m) its payment has been extended, the Account
Debtor has made a partial payment, or it arises from a sale on a
cash-on-delivery basis; (n) it arises from a sale to an Affiliate, or from
a sale on a xxxx-and-hold (except for those sales on a xxxx-and-hold basis
for
which the applicable invoices indicate that title to sold goods shall pass
from
Borrower to its customer once production of the goods is completed and they
become available to be accepted by or delivered to the customer), guaranteed
sale, sale-or-return, sale-on-approval, consignment, or other repurchase or
return basis; (o) it represents a progress billing or retainage;
(p) it includes a billing for interest, fees or late charges, but
ineligibility shall be limited to the extent thereof; or (q) it arises from
a retail sale to a Person who is purchasing for personal, family or household
purposes. In calculating delinquent portions of Accounts under clauses (a)
and
(b), credit balances more than 90 days old will be excluded.
8
Eligible
Accounts Component
- as of
any date of determination, the amount of the Borrowing Base attributable to
Eligible Accounts, after taking into account any Availability Reserves
applicable thereto, as each of the foregoing is determined by
Agent.
Eligible
Assignee
- a
Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved
Fund; (b) any other financial institution approved by Agent and Borrower
Agent (which approval by Borrower Agent shall not be unreasonably withheld
or
delayed, and shall be deemed given if no objection is made within two Business
Days after notice of the proposed assignment), that is organized under the
laws
of the United States or any state or district thereof, has total assets in
excess of $5 billion, extends asset-based lending facilities in its ordinary
course of business and whose becoming an assignee would not constitute a
prohibited transaction under Section 4975 of ERISA or any other Applicable
Law;
and (c) during any Event of Default, any Person acceptable to Agent in its
discretion.
Eligible
Equipment
-
Equipment owned by a Borrower that Agent, in its discretion, deems to be
Eligible Equipment.
Eligible
Inventory
-
Inventory owned by a Borrower that Agent, in its discretion, deems to be
Eligible Inventory. Without limiting the foregoing, no Inventory shall be
Eligible Inventory unless it (a) is raw materials, and not finished goods,
work-in-process, packaging or shipping materials, labels, samples, display
items, bags, or replacement parts; (b) is not held on consignment; (c) is in
new
and saleable condition and is not damaged, defective, shopworn or otherwise
unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and does
not
constitute returned or repossessed goods; (e) meets all standards imposed by
any
Governmental Authority, and does not constitute hazardous materials under any
Environmental Law; (f) conforms with the covenants and representations herein;
(g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien
other than the Lien arising under the Existing Subordinated Debt Documents;
(h)
is within the continental United States or Canada, is not in transit except
between locations of Borrowers, and is not consigned to any Person; (i) is
not
subject to any warehouse receipt or negotiable Document; (j) is not subject
to
any License or other arrangement that restricts such Borrower’s or Agent’s right
to dispose of such Inventory, unless Agent has received an appropriate Lien
Waiver; and (k) is not located on leased premises or in the possession of a
warehouseman, processor, repairman, mechanic, shipper, freight forwarder or
other Person, unless the lessor or such Person has delivered a Lien Waiver
or an
appropriate Rent and Charges Reserve has been established; and (l) is reflected
in the details of a current perpetual inventory report once Borrowers have
established a perpetual inventory reporting system satisfactory to
Agent.
9
Eligible
Inventory Component
- as of
any date of determination, the amount of the Borrowing Base attributable to
Eligible Inventory, after taking into account any Availability Reserves
applicable thereto, as each of the foregoing is determined by
Agent.
Enforcement
Action
- any
action to enforce any Obligations or Loan Documents or to realize upon any
Collateral (whether by judicial action, self-help, notification of Account
Debtors, exercise of setoff or recoupment, or otherwise).
Environmental
Agreement
- each
agreement of Borrowers with respect to any Real Estate subject to a Mortgage,
pursuant to which Borrowers agree to indemnify and hold harmless Agent and
Lenders from liability under any Environmental Laws.
Environmental
Laws
- all
Applicable Laws (including all programs, permits and guidance promulgated by
regulatory agencies), relating to public health (but excluding occupational
safety and health, to the extent regulated by OSHA) or the protection or
pollution of the environment, including CERCLA, RCRA and CWA.
Environmental
Notice
- a
notice (whether written or oral) from any Governmental Authority or other Person
of any possible noncompliance with, investigation of a possible violation of,
litigation relating to, or potential fine or liability under any Environmental
Law, or with respect to any Environmental Release, environmental pollution
or
hazardous materials, including any complaint, summons, citation, order, claim,
demand or request for correction, remediation or otherwise.
Environmental
Release
- a
release as defined in CERCLA or under any other Environmental Law.
Equipment
- as
defined in the UCC, including all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles and other tangible personal Property (other
than Inventory), and all parts, accessories and special tools therefor, and
accessions thereto.
Equity
Interest
- the
interest of any (a) shareholder in a corporation, (b) partner in a partnership
(whether general, limited, limited liability or joint venture), (c) member
in a
limited liability company, or (d) other Person having any other form of equity
security or ownership interest.
ERISA
- the
Employee Retirement Income Security Act of 1974.
Event
of Default
- as
defined in
Section 11.
Excluded
Tax
- Tax on
the overall net income or gross receipts of a Lender imposed by the jurisdiction
in which such Lender’s principal executive office is located.
Existing
Subordinated Credit Agreement
- that
certain Securities Purchase Agreement dated as of December 31, 2004 providing
for the issuance of convertible senior subordinated notes by Borrower Agent
(as
amended, supplemented, modified, extended, renewed, replaced or refinanced
from
time to time).
10
Existing
Subordinated Debt
- the
Debt incurred by Borrower Agent pursuant to the Existing Subordinated Debt
Documents.
Existing
Subordinated Debt Collateral Agent
-
Amphora Limited, an exempt company organized under the laws of the Cayman
Islands.
Existing
Subordinated Debt Documents
- the
Existing Subordinated Credit Agreement, the Subordinated Convertible Notes
and
the Transaction Documents (as defined in the Existing Subordinated Debt Credit
Agreement) and each of the other agreements, documents and instruments providing
for or evidencing or related to the Existing Subordinated Debt Obligations,
and
any other agreement, writing, document or instrument executed or delivered
at
any time in connection with the Existing Subordinated Debt Obligations,
including any intercreditor or joinder agreement among the holders of the
Existing Subordinated Debt Obligations, as each may be amended, restated,
supplemented, modified, renewed, extended or refinanced from time to
time.
Existing
Subordinated Debt Lenders
- the
“Lenders” as defined in the Existing Subordinated Debt Credit Agreement, and any
successors and assigns.
Existing
Subordinated Debt Letter of Credit
- the
irrevocable standby letter of credit no.SLCLSTL01562, dated December 31, 2004,
issued by U.S. Bank National Association for the Borrower Agent’s account for
the benefit of Existing Subordinated Debt Collateral Agent, in the maximum
amount of $10,000,000 to secure certain of the Existing Subordinated Debt
Obligations.
Existing
Subordinated Debt Notes
- the
Senior Subordinated Secured Convertible Notes, dated as of December 31, 2004,
issued by the Borrower Agent in favor of the Existing Subordinated Debt Lenders,
in the original aggregate principal amount of $25,000,000, as amended, restated,
supplemented, modified, renewed, extended or refinanced from time to time in
accordance with the terms of the Intercreditor Agreement.
Existing
Subordinated Debt Obligations
- all
obligations of Borrower Agent, whether outstanding or contingent, evidenced
by
or arising under: (i) the Existing Subordinated Credit Agreement and/or (ii)
any
of the other Existing Subordinated Debt Documents.
Extraordinary
Expenses
- all
costs, expenses or advances that Agent may incur during a Default or Event
of
Default, or during the pendency of an Insolvency Proceeding of an Obligor,
including those relating to (a) any audit, inspection, repossession, storage,
repair, appraisal, insurance, manufacture, preparation or advertising for sale,
sale, collection, or other preservation of or realization upon any Collateral;
(b) any action, arbitration or other proceeding (whether instituted by or
against Agent, any Lender, any Obligor, any representative of creditors of
an
Obligor or any other Person) in any way relating to any Collateral (including
the validity, perfection, priority or avoidability of Agent’s Liens with respect
to any Collateral), Loan Documents or Obligations, including any lender
liability or other Claims; (c) the exercise, protection or enforcement of any
rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding;
(d) settlement or satisfaction of any taxes, charges or Liens with respect
to
any Collateral; (e) any Enforcement Action; (f) negotiation and documentation
of
any modification, waiver, workout, restructuring or forbearance with respect
to
any Loan Documents or Obligations; or (g) Protective Advances. Such costs,
expenses and advances include transfer fees, taxes, storage fees, insurance
costs, permit fees, utility reservation and standby fees, legal fees, appraisal
fees, brokers’ fees and commissions, auctioneers’ fees and commissions,
accountants’ fees, environmental study fees, wages and salaries paid to
employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.
11
Fiscal
Quarter
- each
period of three months, commencing on the first day of a Fiscal
Year.
Fiscal
Year
- the
fiscal year of Borrowers and Subsidiaries for accounting and tax purposes,
ending on December 31 of each year.
Fixed
Asset Formula Amount
- the
lesser of (a) the Fixed Asset Sublimit, or (b) the sum of (i)
70% of the fair market value of the Mortgaged Property, as determined by an
appraisal satisfactory to Agent, and (ii) 80% of the orderly liquidation
value of Eligible Equipment, as determined by an appraisal satisfactory to
Agent.
Fixed
Asset Sublimit
- an
amount equal to $3,700,000, which amount shall be reduced quarterly in the
amount of $108,340 with the first such reduction occurring on July 1, 2006
and
subsequent reductions continuing on the first day of each quarter
thereafter.
Fixed
Charge Coverage Ratio
- the
ratio, determined on a consolidated basis for Borrowers and Subsidiaries, for
any measurement period, of (a) EBITDA to (b) Fixed
Charges.
Fixed
Charges
- the
sum of interest expense (other than payment-in-kind), principal payments made
on
Borrowed Money, cash payments made with respect to a reduction of the Fixed
Asset Sublimit (determined on a monthly basis), unfinanced Capital Expenditures
and cash taxes paid.
FLSA
- the
Fair Labor Standards Act of 1938.
Foreign
Lender
- any
Lender that is organized under the laws of a jurisdiction other than the laws
of
the United States, or any state or district thereof.
Foreign
Plan
- any
employee benefit plan or arrangement maintained or contributed to by any Obligor
or Subsidiary that is not subject to the laws of the United States, or any
employee benefit plan or arrangement mandated by a government other than the
United States for employees of any Obligor or Subsidiary.
Foreign
Subsidiary
- a
Subsidiary that is a “controlled foreign corporation” under Section 957 of the
Internal Revenue Code, such that a guaranty by such Subsidiary of the
Obligations or a Lien on the assets of such Subsidiary to secure the Obligations
would result in material tax liability to Borrowers.
12
Full
Payment
- with
respect to any Obligations, (a) the full and indefeasible cash payment thereof,
including any interest, fees and other charges accruing during an Insolvency
Proceeding (whether or not allowed in the proceeding); (b) if such Obligations
are LC Obligations or inchoate or contingent in nature, Cash Collateralization
thereof (or delivery of a standby letter of credit acceptable to Agent in its
discretion, in the amount of required Cash Collateral); and (c) a release of
any
Claims of Obligors against Agent, Lenders and Issuing Bank arising on or before
the payment date. No Loans shall be deemed to have been paid in full until
all
Commitments related to such Loans have expired or been terminated.
GAAP
-
generally accepted accounting principles in the United States in effect from
time to time.
General
Intangibles
- as
defined in the UCC, including choses in action, causes of action, company or
other business records, inventions, blueprints, designs, patents, patent
applications, trademarks, trademark applications, trade names, trade secrets,
service marks, goodwill, brand names, copyrights, registrations, licenses,
franchises, customer lists, permits, tax refund claims, computer programs,
operational manuals, internet addresses and domain names, insurance refunds
and
premium rebates, all rights to indemnification, and all other intangible
Property of any kind.
Goods
- as
defined in the UCC.
Governmental
Approvals
- all
authorizations, consents, approvals, licenses and exemptions of, registrations
and filings with, and required reports to, all Governmental
Authorities.
Governmental
Authority
- any
federal, state, municipal, foreign or other governmental department, agency,
commission, board, bureau, court, tribunal, instrumentality, political
subdivision, or other entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions for or pertaining to any
government or court, in each case whether associated with the United States,
a
state, district or territory thereof, or a foreign entity or
government.
Guarantor
Payment
- as
defined in Section
5.11.3.
Guarantors
- each
Person who guarantees payment or performance of any Obligations. There are
no
Guarantors as of the Closing Date.
Guaranty
- each
guaranty agreement executed by a Guarantor in favor of Agent.
Hedging
Agreement
- an
agreement relating to any swap, cap, floor, collar, option, forward, cross
right
or obligation, or combination thereof or similar transaction, with respect
to
interest rate, foreign exchange, currency, commodity, credit or equity
risk.
Indemnitees
- Agent
Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America
Indemnitees.
13
Insolvency
Proceeding
- any
case or proceeding commenced by or against a Person under any state, federal
or
foreign law for, or any agreement of such Person to, (a) the entry of an order
for relief under the Bankruptcy Code, or any other insolvency, debtor relief
or
debt adjustment law; (b) the appointment of a receiver, trustee, liquidator,
administrator, conservator or other custodian for such Person or any part of
its
Property; or (c) an assignment or trust mortgage for the benefit of
creditors.
Instrument
- as
defined in the UCC.
Insurance
Assignment
- each
collateral assignment of insurance pursuant to which an Obligor assigns to
Agent, for the benefit of Secured Parties, such Obligor’s rights under business
interruption or other insurance policies as Agent deems appropriate, as security
for the Obligations.
Intellectual
Property
- all
intellectual and similar Property of a Person, including inventions, designs,
patents, patent applications, copyrights, trademarks, service marks, trade
names, trade secrets, confidential or proprietary information, customer lists,
know-how, software and databases; all embodiments or fixations thereof and
all
related documentation, registrations and franchises; all books and records
describing or used in connection with the foregoing; and all licenses or other
rights to use any of the foregoing.
Intellectual
Property Claim
- any
claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s
or Subsidiary’s ownership, use, marketing, sale or distribution of any
Inventory, Equipment, Intellectual Property or other Property violates another
Person’s Intellectual Property.
Intercreditor
Agreement
- the
Intercreditor Agreement of even date herewith, in form and substance
satisfactory to Agent, between the Existing Subordinated Debt Collateral Agent
and Agent, relating to the Existing Subordinated Debt, as may be amended,
modified, supplemented or restated from time to time.
Interest
Period
- as
defined in Section
3.1.3.
Interest
Rate Contract
- any
interest rate swap, collar or cap agreement, or other agreement or arrangement
by any Borrower or Subsidiary with Bank of America that is designed to protect
against fluctuations in interest rates.
Inventory
- as
defined in the UCC, including all goods intended for sale, lease, display or
demonstration; all work in process; and all raw materials, and other materials
and supplies of any kind that are or could be used in connection with the
manufacture, printing, packing, shipping, advertising, sale, lease or furnishing
of such goods, or otherwise used or consumed in a Borrower’s business (but
excluding Equipment).
Inventory
Formula Amount
- the
lesser of (a) $10,000,000; or (b) 60% of the Value of Eligible
Inventory.
14
Inventory
Reserve
-
reserves established by Agent to reflect factors that may negatively impact
the
Value of Inventory, including change in salability, obsolescence, seasonality,
theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor
chargebacks.
Investment
- any
acquisition of all or substantially all assets of a Person; any acquisition
of
record or beneficial ownership of any Equity Interests of a Person; or any
advance or capital contribution to or other investment in a Person.
Investment
Property
- as
defined in the UCC.
Issuing
Bank
- Bank
of America or an Affiliate of Bank of America.
Issuing
Bank Indemnitees
-
Issuing Bank and its officers, directors, employees, Affiliates, agents and
attorneys.
LC
Application
- an
application by Borrower Agent to Issuing Bank for issuance of a Letter of
Credit, in form and substance satisfactory to Issuing Bank.
LC
Conditions
- the
following conditions necessary for issuance of a Letter of Credit: (a) each
of
the conditions set forth in Section
6;
(b)
after giving effect to such issuance, total LC Obligations do not exceed the
Letter of Credit Subline, no Overadvance exists and, if no Revolver Loans are
outstanding, the LC Obligations do not exceed the Borrowing Base (without giving
effect to the LC Reserve for purposes of this calculation); (c) the expiration
date of such Letter of Credit is (i) no more than 365 days from issuance, in
the
case of standby Letters of Credit, (ii) no more than 120 days from issuance,
in
the case of documentary Letters of Credit, and (iii) at least 20 Business Days
prior to the Revolver Termination Date; (d) the Letter of Credit and payments
thereunder are denominated in Dollars; and (e) the form of the proposed Letter
of Credit is satisfactory to Agent and Issuing Bank in their
discretion.
LC
Documents
- all
documents, instruments and agreements (including LC Requests and LC
Applications) delivered by Borrowers or any other Person to Issuing Bank or
Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.
LC
Obligations
- the
sum (without duplication) of (a) all amounts owing by Borrowers for any drawings
under Letters of Credit; (b) the aggregate undrawn amount of all outstanding
Letters of Credit; and (c) all fees and other amounts owing with respect to
Letters of Credit.
LC
Request
- a
request for issuance of a Letter of Credit, to be provided by Borrower Agent
to
Issuing Bank, in form satisfactory to Agent and Issuing Bank.
LC
Reserve
- the
aggregate of all LC Obligations, other than (a) those that have been Cash
Collateralized, and (b) if no Default or Event of Default exists, those
constituting charges owing to the Issuing Bank.
15
Lender
Indemnitees
-
Lenders and their officers, directors, employees, Affiliates, agents and
attorneys.
Lenders
- as
defined in the preamble to this Agreement, including Agent in its capacity
as a
provider of Swingline Loans and any other Person who hereafter becomes a
“Lender” pursuant to an Assignment and Acceptance.
Letter
of Credit
- any
standby or documentary letter of credit issued by Issuing Bank for the account
of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum
or
similar form of credit support issued by Agent or Issuing Bank for the benefit
of a Borrower.
Letter-of-Credit
Right
- as
defined in the UCC.
Letter
of Credit Subline
-
$12,000,000.
LIBOR
Loan
- each
set of LIBOR Revolver Loans having a common length and commencement of Interest
Period.
LIBOR
Revolver Loan
- a
Revolver Loan that bears interest based on Adjusted LIBOR.
License
- any
license or agreement under which an Obligor is authorized to use Intellectual
Property in connection with any manufacture, marketing, distribution or
disposition of Collateral, any use of Property or any other conduct of its
business.
Licensor
- any
Person from whom an Obligor obtains the right to use any Intellectual
Property.
Lien
- any
Person’s interest in Property securing an obligation owed to, or a claim by,
such Person, whether such interest is based on common law, statute or contract,
including liens, security interests, pledges, hypothecations, statutory trusts,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Property.
Lien
Waiver
- an
agreement, in form and substance satisfactory to Agent, by which (a) for any
material Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit Agent
to enter upon the premises and remove the Collateral or to use the premises
to
store or dispose of the Collateral; (b) for any Collateral held by a
warehouseman, processor, shipper or freight forwarder, such Person waives or
subordinates any Lien it may have on the Collateral, agrees to hold any
Documents in its possession relating to the Collateral as agent for Agent,
and
agrees to deliver the Collateral to Agent upon request; (c) for any Collateral
held by a repairman, mechanic or bailee, such Person acknowledges Agent’s Lien,
waives or subordinates any Lien it may have on the Collateral, and agrees to
deliver the Collateral to Agent upon request; and (d) for any Collateral subject
to a Licensor’s Intellectual Property rights, the Licensor grants to Agent the
right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to the
Collateral, including the right to dispose of it with the benefit of the
Intellectual Property, whether or not a default exists under any applicable
License.
16
Loan
- a
Revolver Loan.
Loan
Account
- the
loan account established by each Lender on its books pursuant to Section
5.8.
Loan
Documents
- this
Agreement, Other Agreements and Security Documents.
Loan
Year
- each
calendar year commencing on the Closing Date and on each anniversary of the
Closing Date.
Margin
Stock
- as
defined in Regulation U of the Board of Governors.
Material
Adverse Effect
- the
effect of any event or circumstance that, taken alone or in conjunction with
other events or circumstances, (a) has or could be reasonably expected to
have a material adverse effect on the business, operations, Properties,
prospects or condition (financial or otherwise) of any Obligor, on the value
of
any material Collateral, on the enforceability of any Loan Documents, or on
the
validity or priority of Agent’s Liens on any Collateral; (b) materially
impairs the ability of any Obligor to perform any obligations under the Loan
Documents, including repayment of any Obligations; or (c) otherwise impairs
the ability of Agent or any Lender to enforce or collect any Obligations or
to
realize upon any Collateral.
Material
Contract
- any
agreement or arrangement to which a Borrower or Subsidiary is party (other
than
the Loan Documents) (a) that is deemed to be a material contract under any
securities law applicable to such Obligor, including the Securities Act of
1933,
(b) for which breach, termination, nonperformance or failure to renew could
reasonably be expected to have a Material Adverse Effect, (c) the Existing
Subordinated Debt Documents, or (d) that relates to Debt in an aggregate
amount of $750,000 or more.
Xxxxx’x
-
Xxxxx’x Investors Service, Inc., and its successors.
Mortgage
- each
mortgage, deed of trust or deed to secure debt pursuant to which a Borrower
grants to Agent, for the benefit of Secured Parties, Liens upon the Real Estate
owned by such Borrower, as security for the Obligations.
Mortgaged
Property
- the
Real Estate located in Hillsborough County, Florida and subject to a
Mortgage.
Multiemployer
Plan
- any
employee benefit plan or arrangement described in Section 4001(a)(3) of ERISA
that is maintained or contributed to by any Obligor or Subsidiary.
Net
Proceeds
- with
respect to an Asset Disposition, proceeds (including, when received, any
deferred or escrowed payments) received by a Borrower or Subsidiary in cash
from
such disposition, net of (a) reasonable and customary costs and expenses
actually incurred in connection therewith, including legal fees and sales
commissions; (b) amounts applied to repayment of Debt secured by a Permitted
Lien senior to Agent’s Liens on Collateral sold; (c) transfer or similar taxes;
and (d) reserves for indemnities, until such reserves are no longer
needed.
17
Notes
- each
Revolver Note, or other promissory note executed by a Borrower to evidence
any
Obligations.
Note
Transaction
- the
transactions contemplated and consummated pursuant to the Existing Subordinated
Debt Documents.
Notice
of Borrowing
- a
Notice of Borrowing to be provided by Borrower Agent to request the funding
of a
Borrowing of Revolver Loans, in form satisfactory to Agent.
Notice
of Conversion/Continuation
- a
Notice of Conversion/Continuation to be provided by Borrower Agent to request
a
conversion or continuation of any Loans as LIBOR Loans, in form satisfactory
to
Agent.
Obligations
- all
(a) principal of and premium, if any, on the Loans, (b) LC Obligations and
other
obligations of Obligors with respect to Letters of Credit, (c) interest,
expenses, fees and other sums payable by Obligors under Loan Documents, (d)
obligations of Obligors under any indemnity for Claims, (e) Extraordinary
Expenses, (f) Bank Product Debt, and (g) other Debts, obligations and
liabilities of any kind owing by Obligors pursuant to the Loan Documents,
whether now existing or hereafter arising, whether evidenced by a note or other
writing, whether allowed in any Insolvency Proceeding, whether arising from
an
extension of credit, issuance of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or
several.
Obligor
- each
Borrower, Guarantor, or other Person that is liable for payment of any
Obligations or that has granted a Lien in favor of Agent on its assets to secure
any Obligations.
Ordinary
Course of Business
- the
ordinary course of business of any Borrower or Subsidiary, consistent with
past
practices and undertaken in good faith.
Organic
Documents
- with
respect to any Person, its charter, certificate or articles of incorporation,
bylaws, articles of organization, limited liability agreement, operating
agreement, members agreement, shareholders agreement, partnership agreement,
certificate of partnership, certificate of formation, voting trust agreement,
or
similar agreement or instrument governing the formation or operation of such
Person.
OSHA
- the
Occupational Safety and Hazard Act of 1970.
Other
Agreement
- each
Note; LC Document; Lien Waiver; Intercreditor Agreement; Real Estate Related
Document Borrowing Base Certificate, Compliance Certificate, financial statement
or report delivered hereunder; or other document, instrument or agreement (other
than this Agreement or a Security Document) now or hereafter delivered by an
Obligor or other Person to Agent or a Lender in connection with any transactions
relating hereto.
18
Overadvance
- as
defined in Section
2.1.5.
Overadvance
Loan
- a Base
Rate Revolver Loan made when an Overadvance exists or is caused by the funding
thereof.
Participant
- as
defined in Section
13.2.
Patriot
Act
- the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat.
272
(2001).
Payable
Reserve
- a
reserve equal to aggregate amount of Borrowers’ accounts payable which at any
time remain unpaid more than 90 days past the invoice date thereof (but not
including retention hold-backs for subcontractors which coincide with the
accounts receivable retention that customers of the Borrowers impose on the
Borrowers).
Payment
Intangible
- as
defined in the UCC.
Payment
Item
- each
check, draft or other item of payment payable to a Borrower, including those
constituting proceeds of any Collateral.
Permitted
Asset Disposition
- as
long as no Default or Event of Default exists and all Net Proceeds are remitted
to Agent, an Asset Disposition that is (a) a sale of Inventory in the
Ordinary Course of Business; (b) a disposition of Equipment that, in the
aggregate during any 12 month period, has a fair market or book value (whichever
is more) of $250,000 or less; (c) a disposition of Inventory that is
obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of
Business; (d) termination of a lease of real or personal Property that is
not necessary for the Ordinary Course of Business, could not reasonably be
expected to have a Material Adverse Effect and does not result from an Obligor’s
default; or (e) approved in writing by Agent and Required
Lenders.
Permitted
Contingent Obligations
-
Contingent Obligations (a) arising from endorsements of Payment Items for
collection or deposit in the Ordinary Course of Business; (b) arising from
Hedging Agreements permitted hereunder; (c) existing on the Closing Date,
and any extension or renewal thereof that does not increase the amount of such
Contingent Obligation when extended or renewed; (d) incurred in the
Ordinary Course of Business with respect to surety, appeal or performance bonds,
or other similar obligations; (e) arising from customary indemnification
obligations in favor of purchasers in connection with dispositions of Equipment
permitted hereunder; (f) arising under the Loan Documents; or (g) in
an aggregate amount of $250,000 or less at any time.
Permitted
Lien
- as
defined in Section
10.2.2.
19
Permitted
Purchase Money Debt
-
Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured
only by a Purchase Money Lien, as long as the aggregate amount does not exceed
$250,000 at any time and its incurrence does not violate Section
10.2.3.
Person
- any
individual, corporation, limited liability company, partnership, joint venture,
joint stock company, land trust, business trust, unincorporated organization,
Governmental Authority or other entity.
Plan
- an
employee pension benefit plan that is covered by Title IV of ERISA or subject
to
the minimum funding standards under Section 412 of the Internal Revenue Code
and
that is either (a) maintained by a Borrower or Subsidiary for employees or
(b) maintained pursuant to a collective bargaining agreement, or other
arrangement under which more than one employer makes contributions and to which
a Borrower or Subsidiary is making or accruing an obligation to make
contributions or has within the preceding five years made or accrued such
contributions.
Pro
Rata
- with
respect to any Lender, a percentage (expressed as a decimal, rounded to the
ninth decimal place) determined (a) while Revolver Commitments are
outstanding, by dividing the amount of such Lender’s Revolver Commitment by the
aggregate amount of all Revolver Commitments; and (b) at any other time, by
dividing the amount of such Lender’s Loans and LC Obligations by the aggregate
amount of all outstanding Loans and LC Obligations.
Properly
Contested
- with
respect to any obligation of an Obligor, (a) the obligation is subject to a
bona
fide dispute regarding amount or the Obligor’s liability to pay; (b) the
obligation is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently pursued; (c) appropriate reserves have been
established in accordance with GAAP; (d) non-payment could not have a Material
Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor;
(e) no Lien is imposed on assets of the Obligor, unless bonded and stayed to
the
satisfaction of Agent; and (f) if the obligation results from entry of a
judgment or other order, such judgment or order is stayed pending appeal or
other judicial review.
Property
- any
interest in any kind of property or asset, whether real, personal or mixed,
or
tangible or intangible.
Protective
Advances
- as
defined in Section
2.1.6.
Purchase
Money Debt
- (a)
Debt (other than the Obligations) for payment of any of the purchase price
of
fixed assets; (b) Debt (other than the Obligations) incurred within 10 days
before or after acquisition of any fixed assets, for the purpose of financing
any of the purchase price thereof; and (c) any renewals, extensions or
refinancings (but not increases) thereof.
20
Purchase
Money Lien
- a Lien
that secures Purchase Money Debt, encumbering only the fixed assets acquired
with such Debt and constituting a Capital Lease or a purchase money security
interest under the UCC.
RCRA
- the
Resource Conservation and Recovery Act (42 U.S.C. Sec.Sec.
6991-6991i).
Real
Estate
- all
right, title and interest (whether as owner, lessor or lessee) in any real
Property or any buildings, structures, parking areas or other improvements
thereon.
Refinancing
Conditions
- the
following conditions for Refinancing Debt: (a) it is in an aggregate principal
amount that does not exceed the principal amount of the Debt being extended,
renewed or refinanced; (b) it has a final maturity no sooner than, a weighted
average life no less than, and an interest rate no greater than, the Debt being
extended, renewed or refinanced; (c) it is subordinated to the Obligations
at
least to the same extent as the Debt being extended, renewed or refinanced;
(d)
the representations, covenants and defaults applicable to it are no less
favorable to Borrowers than those applicable to the Debt being extended, renewed
or refinanced; (e) no additional Lien is granted to secure it; (f) no additional
Person is obligated on such Debt; and (g) upon giving effect to it, no Default
or Event of Default exists.
Refinancing
Debt
-
Borrowed Money that is the result of an extension, renewal or refinancing of
Debt permitted under Section
10.2.1(b),
(d)
or
(f).
Reimbursement
Date
- as
defined in Section
2.3.2.
Related
Real Estate Documents
- with
respect to any Real Estate subject to a Mortgage, the following, in form and
substance satisfactory to Agent and received by Agent for review at least 15
days prior to the effective date of the Mortgage: (a) a mortgagee title policy
(or binder therefor) covering Agent’s interest under the Mortgage, in a form and
amount and by an insurer acceptable to Agent, which must be fully paid on such
effective date; (b) such assignments of leases, estoppel letters, attornment
agreements, consents, waivers and releases as Agent may require with respect
to
other Persons having an interest in the Real Estate; (c) a current, as-built
survey of the Real Estate, containing a metes-and-bounds property description
and flood plain certification, and certified by a licensed surveyor acceptable
to Agent; (d) flood insurance in an amount, with endorsements and by an insurer
acceptable to Agent, if the Real Estate is within a flood plain; (e) a current
appraisal of the Real Estate, prepared by an appraiser acceptable to Agent,
and
in form and substance satisfactory to Required Lenders; (f) an environmental
assessment, prepared by environmental engineers acceptable to Agent, and
accompanied by such reports, certificates, studies or data as Agent may
reasonably require, which shall all be in form and substance satisfactory to
Required Lenders; and (g) an Environmental Agreement and such other documents,
instruments or agreements as Agent may reasonably require with respect to any
environmental risks regarding the Real Estate.
Rent
and Charges Reserve
- the
aggregate of (a) all past due rent and other amounts owing by an Obligor to
any
landlord, warehouseman, processor, repairman, mechanic, shipper, freight
forwarder or other Person who possesses any Collateral or could assert a Lien
on
any Collateral; and (b) a reserve at least equal to three months rent and other
charges that could be payable to any such Person, unless it has executed a
Lien
Waiver.
21
Report
- as
defined in Section
12.2.3.
Reportable
Event
- any
event set forth in Section 4043(b) of ERISA.
Required
Lenders
-
Lenders (subject to Section
4.2)
having
(a) Revolver Commitments and in excess of 50% of the aggregate Revolver
Commitments; and (b) if the Revolver Commitments have terminated, Loans in
excess of 50% of all outstanding Loans.
Reserve
Percentage
- the
reserve percentage (expressed as a decimal, rounded upward to the nearest 1/8th
of 1%) applicable to member banks under regulations issued from time to time
by
the Board of Governors for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).
Restricted
Investment
- any
Investment by a Borrower or Subsidiary, other than (a) Investments in
Subsidiaries to the extent existing on the Closing Date; (b) Cash Equivalents
that are subject to Agent’s Lien and control, pursuant to documentation in form
and substance satisfactory to Agent; and (c) loans and advances permitted under
Section
10.2.7.
Restrictive
Agreement
- an
agreement (other than a Loan Document) that conditions or restricts the right
of
any Borrower, Subsidiary or other Obligor to incur or repay Borrowed Money,
to
grant Liens on any assets, to declare or make Distributions, to modify, extend
or renew any agreement evidencing Borrowed Money, or to repay any intercompany
Debt.
Revolver
Commitment
- for
any Lender, its obligation to make Revolver Loans and to participate in LC
Obligations up to the maximum principal amount shown on Schedule
1.1,
or as
specified hereafter in the most recent Assignment and Acceptance to which it
is
a party. “Revolver
Commitments”
means
the aggregate amount of such commitments of all Lenders.
Revolver
Loan
- a loan
made pursuant to Section
2.1,
and any
Swingline Loan, Overadvance Loan or Protective Advance.
Revolver
Termination Date
- March
31, 2009.
Royalties
- all
royalties, fees, expense reimbursement and other amounts payable by a Borrower
under a License.
S&P
-
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., and its successors.
Secured
Parties
- Agent,
Issuing Bank, Lenders and providers of Bank Products.
22
Security
Documents
- the
Guaranties, Mortgages, Trademark Security Agreements, Deposit Account Control
Agreements, and
all
other documents, instruments and agreements now or hereafter securing (or given
with the intent to secure) any Obligations.
Senior
Officer
- the
chairman of the board, president, chief executive officer or chief financial
officer of a Borrower or, if the context requires, an Obligor.
Settlement
Report
- a
report delivered by Agent to Lenders summarizing the Revolver Loans and
participations in LC Obligations outstanding as of a given settlement date,
allocated to Lenders on a Pro Rata basis in accordance with their Revolver
Commitments.
Software
- as
defined in the UCC.
Solvent
- as to
any Person, such Person (a) owns Property whose fair salable value is greater
than the amount required to pay all of its debts (including contingent,
subordinated, unmatured and unliquidated liabilities); (b) owns Property whose
present fair salable value (as defined below) is greater than the probable
total
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of such Person as they become absolute and matured; (c) is able
to
pay all of its debts as they mature; (d) has capital that is not unreasonably
small for its business and is sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage;
(e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy
Code; and (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) under any Loan Documents,
or made any conveyance in connection therewith, with actual intent to hinder,
delay or defraud either present or future creditors of such Person or any of
its
Affiliates. “Fair
salable value”
means
the amount that could be obtained for assets within a reasonable time, either
through collection or through sale under ordinary selling conditions by a
capable and diligent seller to an interested buyer who is willing (but under
no
compulsion) to purchase.
Statutory
Reserves
- the
percentage (expressed as a decimal) established by the Board of Governors as
the
then stated maximum rate for all reserves (including those imposed by Regulation
D of the Board of Governors, all basic, emergency, supplemental or other
marginal reserve requirements, and any transitional adjustments or other
scheduled changes in reserve requirements) applicable to any member bank of
the
Federal Reserve System in respect of Eurocurrency Liabilities (or any successor
category of liabilities under Regulation D).
Subordinated
Convertible Notes
- the
Notes issued pursuant to the Existing Subordinated Debt Documents in the
original aggregate principal amount of $25,000,000, as amended, restated,
supplemented, modified, renewed, extended or refinanced from time to time in
accordance with the terms hereof and thereof.
Subsidiary
- any
entity at least 50% of whose voting securities or Equity Interests is owned
by a
Borrower or any combination of Borrowers (including indirect ownership by a
Borrower through other entities in which the Borrower directly or indirectly
owns 50% of the voting securities or Equity Interests).
Supporting
Obligation
- as
defined in the UCC.
23
Swingline
Loan
- any
Borrowing of Base Rate Revolver Loans funded with Agent’s funds, until such
Borrowing is settled among Lenders pursuant to Section
4.1.3.
Taxes
- any
taxes, levies, imposts, duties, fees, assessments, deductions, withholdings
or
other charges of whatever nature, including income, receipts, excise, property,
sales, use, transfer, license, payroll, withholding, social security, franchise,
intangibles, stamp or recording taxes imposed by any Governmental Authority,
and
all interest, penalties and similar liabilities relating thereto.
Trademark
Security Agreement
- each
trademark security agreement pursuant to which an Obligor grants to Agent,
for
the benefit of Secured Parties, a Lien on such Obligor’s interests in
trademarks, as security for the Obligations.
Transferee
- any
actual or potential Eligible Assignee, Participant or other Person acquiring
an
interest in any Obligations.
Type
- any
type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same interest
option and, in the case of LIBOR Loans, the same Interest Period.
UCC
- the
Uniform Commercial Code as in effect in the State of California or, when the
laws of any other jurisdiction govern the perfection or enforcement of any
Lien,
the Uniform Commercial Code of such jurisdiction.
Upstream
Payment
- a
Distribution by a Subsidiary of a Borrower to such Borrower.
Value
-
(a) for Inventory, its value determined on the basis of the lower of cost
or market, calculated on a first-in, first-out basis; and (b) for an
Account, its face amount, net of any returns, rebates, discounts (calculated
on
the shortest terms), credits, allowances or Taxes (including sales, excise
or
other taxes) that have been or could be claimed by the Account Debtor or any
other Person.
1.2 Accounting
Terms.
Under
the Loan Documents (except as otherwise specified herein), all accounting terms
shall be interpreted, all accounting determinations shall be made, and all
financial statements shall be prepared, in accordance with GAAP applied on
a
basis consistent with the most recent audited financial statements of Borrowers
delivered to Agent before the Closing Date and using the same inventory
valuation method as used in such financial statements, except for any change
required or permitted by GAAP if Borrowers’ certified public accountants concur
in such change, the change is disclosed to Agent, and Section
10.3
is
amended in a manner satisfactory to Required Lenders to take into account the
effects of the change.
1.3 Certain
Matters of Construction.
The
terms “herein,” “hereof,” “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. In the
computation of periods of time from a specified date to a later specified date,
“from” means “from and including,” and “to” and “until” each mean “to but
excluding.” The terms “including” and “include” shall mean “including, without
limitation” and, for purposes of each Loan Document, the parties agree that the
rule of ejusdem
generis
shall
not be applicable to limit any provision. Section titles appear as a matter
of
convenience only and shall not affect the interpretation of any Loan Document.
All references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any document,
instrument or agreement include any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted by the Loan Documents); (c)
any
section mean, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules mean, unless the context otherwise
requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day
mean time of day at Agent’s notice address under Section
14.3.1;
or (g)
discretion of Agent, Issuing Bank or any Lender mean the sole and absolute
discretion of such Person. All calculations of Value, fundings of Loans,
issuances of Letters of Credit and payments of Obligations shall be in Dollars
and, unless the context otherwise requires, all determinations (including
calculations of Borrowing Base and financial covenants) made from time to time
under the Loan Documents shall be made in light of the circumstances existing
at
such time. Borrowing Base calculations shall be consistent with historical
methods of valuation and calculation, and otherwise satisfactory to Agent (and
not necessarily calculated in accordance with GAAP). Borrowers shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent, Issuing Bank or any Lender under any Loan Documents. No provision
of
any Loan Documents shall be construed against any party by reason of such party
having, or being deemed to have, drafted the provision. Whenever the phrase
“to
the best of Borrowers’ knowledge” or words of similar import are used in any
Loan Documents, it means actual knowledge of a Senior Officer, or knowledge
that
a Senior Officer would have obtained if he or she had engaged in good faith
and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.
24
SECTION
2.
CREDIT FACILITIES
2.1 Revolver
Commitment.
2.1.1
Revolver
Loans.
Each
Lender agrees, severally on a Pro Rata basis up to its Revolver Commitment,
on
the terms set forth herein, to make Revolver Loans to Borrowers from time to
time through the Commitment Termination Date. The Revolver Loans may be repaid
and reborrowed as provided herein. In no event shall Lenders have any obligation
to honor a request for a Revolver Loan if the unpaid balance of Revolver Loans
outstanding at such time (including the requested Loan) would exceed the
Borrowing Base.
2.1.2
Revolver
Notes.
The
Revolver Loans made by each Lender and interest accruing thereon shall be
evidenced by the records of Agent and such Lender. At the request of any Lender,
Borrowers shall deliver a Revolver Note to such Lender.
2.1.3
Use
of
Proceeds.
The
proceeds of Revolver Loans shall be used by Borrowers solely (a) to satisfy
existing Debt; (b) to pay fees and transaction expenses associated with the
closing of this credit facility; (c) to pay Obligations in accordance with
this
Agreement; and (d) for working capital and other lawful corporate purposes
of
Borrowers.
25
2.1.4
Termination
of Revolver Commitments.
(a) The
Revolver Commitments shall terminate on the Revolver Termination Date, unless
sooner terminated in accordance with this Agreement. Upon at least 90 days
prior
written notice to Agent at any time after the first Loan Year, Borrowers may,
at
their option, terminate the Revolver Commitments and this credit facility.
Any
notice of termination given by Borrowers shall be irrevocable. On the
termination date, Borrowers shall make Full Payment of all
Obligations.
(b) [Intentionally
Omitted].
(c) Concurrently
with a termination of the Revolving Commitments, for whatever reason (including
an Event of Default), Borrowers shall pay to Agent, for the Pro Rata benefit
of
Lenders and as liquidated damages for loss of bargain (and not as a penalty),
an
amount equal to (i) if the termination occurs during the first Loan Year, 2.0%
of the Revolver Commitments; (ii) if it occurs during the second Loan Year,
1.0%
of the Revolver Commitments; and (iii) if it occurs thereafter, 0.0% of the
Revolver Commitments. No termination charge shall be payable if termination
occurs on the Revolver Termination Date or in connection with a refinancing
of
this credit facility by Bank of America or any of its Affiliates.
2.1.5
Overadvances.
If the
aggregate Revolver Loans exceed the Borrowing Base (“Overadvance”)
or the
aggregate Revolver Commitments at any time, the excess amount shall be payable
by Borrowers on demand by Agent, but all such Revolver Loans shall nevertheless
constitute Obligations secured by the Collateral and entitled to all benefits
of
the Loan Documents. Unless its authority has been revoked in writing by Required
Lenders, Agent may require Lenders to honor requests for Overadvance Loans
and
to forbear from requiring Borrowers to cure an Overadvance, (a) when no other
Event of Default is known to Agent, as long as (i) the Overadvance does not
continue for more than 30 consecutive days (and no Overadvance may exist for
at
least five consecutive days thereafter before further Overadvance Loans are
required), and (ii) the Overadvance is not known by Agent to exceed $500,000;
and (b) regardless of whether an Event of Default exists, if Agent discovers
an
Overadvance not previously known by it to exist, as long as from the date of
such discovery the Overadvance (i) is not increased by more than $50,000, and
(ii) does not continue for more than 30 consecutive days. In no event shall
Overadvance Loans be required that would cause the outstanding Revolver Loans
and LC Obligations to exceed the aggregate Revolver Commitments. Any funding
of
an Overadvance Loan or sufferance of an Overadvance shall not constitute a
waiver by Agent or Lenders of the Event of Default caused thereby. In no event
shall any Borrower or other Obligor be deemed a beneficiary of this Section
nor
authorized to enforce any of its terms.
2.1.6
Protective
Advances.
Agent
shall be authorized, in its discretion, at any time that a Default or Event
of
Default exists or any conditions in Section 6
are not
satisfied, and without regard to the aggregate Commitments, to make Base Rate
Revolver Loans (“Protective
Advances”)
(a) up
to an aggregate amount of $100,000 outstanding at any time, if Agent deems
such
Loans necessary or desirable to preserve or protect any Collateral, or to
enhance the collectibility or repayment of Obligations; or (b) to pay any other
amounts chargeable to Obligors under any Loan Documents, including costs, fees
and expenses. All Protective Advances shall be Obligations, secured by the
Collateral, and shall be treated for all purposes as Extraordinary Expenses.
Each Lender shall participate in each Protective Advance on a Pro Rata basis.
Required Lenders may at any time revoke Agent’s authorization to make further
Protective Advances by written notice to Agent. Absent such revocation, Agent’s
determination that funding of a Protective Advance is appropriate shall be
conclusive.
26
2.2 [Intentionally
Omitted].
2.3 Letter
of Credit Facility.
2.3.1
Issuance
of Letters of Credit.
Issuing
Bank agrees to issue Letters of Credit from time to time until 30 days prior
to
the Revolver Termination Date (or until the Commitment Termination Date, if
earlier), on the terms set forth herein, including the following:
(a) Each
Borrower acknowledges that Issuing Bank’s willingness to issue any Letter of
Credit is conditioned upon Issuing Bank’s receipt of a LC Application with
respect to the requested Letter of Credit, as well as such other instruments
and
agreements as Issuing Bank may customarily require for issuance of a letter
of
credit of similar type and amount. Issuing Bank shall have no obligation to
issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and
LC
Application at least three Business Days prior to the requested date of
issuance; and (ii) each LC Condition is satisfied. If Issuing Bank receives
written notice from a Lender at least one Business Day before issuance of a
Letter of Credit that any LC Condition has not been satisfied, Issuing Bank
shall have no obligation to issue the requested Letter of Credit (or any other)
until such notice is withdrawn in writing by that Lender or until Required
Lenders have waived such condition in accordance with this Agreement. Prior
to
receipt of any such notice, Issuing Bank shall not be deemed to have knowledge
of any failure of LC Conditions.
(b) Letters
of Credit may be requested by a Borrower only (i) to support obligations of
such
Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes
as Agent and Lenders may approve from time to time in writing. The renewal
or
extension of any Letter of Credit shall be treated as the issuance of a new
Letter of Credit, except that delivery of a new LC Application shall be required
at the discretion of Issuing Bank.
(c) Borrowers
assume all risks of the acts, omissions or misuses of any Letter of Credit
by
the beneficiary. In connection with issuance of any Letter of Credit, none
of
Agent, Issuing Bank or any Lender shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of any
goods
purported to be represented by any Documents; any differences or variation
in
the character, quality, quantity, condition, packing, value or delivery of
any
goods from that expressed in any Documents; the form, validity, sufficiency,
accuracy, genuineness or legal effect of any Documents or of any endorsements
thereon; the time, place, manner or order in which shipment of goods is made;
partial or incomplete shipment of, or failure to ship, any goods referred to
in
a Letter of Credit or Documents; any deviation from instructions, delay, default
or fraud by any shipper or other Person in connection with any goods, shipment
or delivery; any breach of contract between a shipper or vendor and a Borrower;
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or
otherwise; errors in interpretation of technical terms; the misapplication
by a
beneficiary of any Letter of Credit or the proceeds thereof; or any consequences
arising from causes beyond the control of Issuing Bank, Agent or any Lender,
including any act or omission of a Governmental Authority. The rights and
remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing
Bank shall be fully subrogated to the rights and remedies of each beneficiary
whose claims against Borrowers are discharged with proceeds of any Letter of
Credit.
27
(d) In
connection with its administration of and enforcement of rights or remedies
under any Letters of Credit or LC Documents, Issuing Bank shall be entitled
to
act, and shall be fully protected in acting, upon any certification, notice
or
other communication in whatever form believed by Issuing Bank, in good faith,
to
be genuine and correct and to have been signed, sent or made by a proper Person.
Issuing Bank may consult with and employ legal counsel, accountants and other
experts to advise it concerning its obligations, rights and remedies, and shall
be entitled to act upon, and shall be fully protected in any action taken in
good faith reliance upon, any advice given by such experts. Issuing Bank may
employ agents and attorneys-in-fact in connection with any matter relating
to
Letters of Credit or LC Documents, and shall not be liable for the negligence
or
misconduct of any such agents or attorneys-in-fact selected with reasonable
care.
2.3.2
Reimbursement;
Participations.
(a) If
Issuing Bank honors any request for payment under a Letter of Credit, Borrowers
shall pay to Issuing Bank, on the same day (“Reimbursement
Date”),
the
amount paid by Issuing Bank under such Letter of Credit, together with interest
at the interest rate for Base Rate Revolver Loans from the Reimbursement Date
until payment by Borrowers. The obligation of Borrowers to reimburse Issuing
Bank for any payment made under a Letter of Credit shall be absolute,
unconditional, irrevocable, and joint and several, and shall be paid without
regard to any lack of validity or enforceability of any Letter of Credit or
the
existence of any claim, setoff, defense or other right that Borrowers may have
at any time against the beneficiary. Whether or not Borrower Agent submits
a
Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing
of
Base Rate Revolver Loans in an amount necessary to pay all amounts due Issuing
Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata
share
of such Borrowing whether or not the Commitments have terminated, an Overadvance
exists or is created thereby, or the conditions in Section
6
are
satisfied.
(b) Upon
issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably
and unconditionally purchased from Issuing Bank, without recourse or warranty,
an undivided Pro Rata interest and participation in all LC Obligations relating
to the Letter of Credit. If Issuing Bank makes any payment under a Letter of
Credit and Borrowers do not reimburse such payment on the Reimbursement Date,
Agent shall promptly notify Lenders and each Lender shall promptly (within
one
Business Day) and unconditionally pay to Agent, for the benefit of Issuing
Bank,
the Lender’s Pro Rata share of such payment. Upon request by a Lender, Issuing
Bank shall furnish copies of any Letters of Credit and LC Documents in its
possession at such time.
28
(c) The
obligation of each Lender to make payments to Agent for the account of Issuing
Bank in connection with Issuing Bank’s payment under a Letter of Credit shall be
absolute, unconditional and irrevocable, not subject to any counterclaim,
setoff, qualification or exception whatsoever, and shall be made in accordance
with this Agreement under all circumstances, irrespective of any lack of
validity or unenforceability of any Loan Documents; any draft, certificate
or
other document presented under a Letter of Credit having been determined to
be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or the existence of any
setoff or defense that any Obligor may have with respect to any Obligations.
Issuing Bank does not assume any responsibility for any failure or delay in
performance or any breach by any Borrower or other Person of any obligations
under any LC Documents. Issuing Bank does not make to Lenders any express or
implied warranty, representation or guaranty with respect to the Collateral,
LC
Documents or any Obligor. Issuing Bank shall not be responsible to any Lender
for any recitals, statements, information, representations or warranties
contained in, or for the execution, validity, genuineness, effectiveness or
enforceability of any LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any Collateral or the perfection of
any
Lien therein; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any
Obligor.
(d) No
Issuing Bank Indemnitee shall be liable to any Lender or other Person for any
action taken or omitted to be taken in connection with any LC Documents except
as a result of its actual gross negligence or willful misconduct. Issuing Bank
shall not have any liability to any Lender if Issuing Bank refrains from any
action under any Letter of Credit or LC Documents until it receives written
instructions from Required Lenders.
2.3.3
Cash
Collateral.
If any
LC Obligations, whether or not then due or payable, shall for any reason be
outstanding at any time (a) that an Event of Default exists, (b) that
Availability is less than zero, (c) after the Commitment Termination Date,
or
(d) within 20 Business Days prior to the Revolver Termination Date, then
Borrowers shall, at Issuing Bank’s or Agent’s request, pay to Issuing Bank the
amount of all outstanding LC Obligations consisting of drawings under Letters
of
Credit and all fees related thereto, and Cash Collateralize the outstanding
undrawn amount of any Letters of Credit. If Borrowers fail to Cash Collateralize
outstanding Letters of Credit as required herein, Lenders may (and shall upon
direction of Agent) advance, as Revolver Loans, the amount of the Cash
Collateral required (whether or not the Commitments have terminated, an
Overadvance exists, or the conditions in Section
6
are
satisfied).
29
SECTION
3.
INTEREST, FEES AND CHARGES
3.1 Interest.
3.1.1
Rates
and Payment of Interest.
(a) The
Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in
effect from time to time, plus the Applicable Margin; (ii) if a LIBOR Loan,
at
Adjusted LIBOR for the applicable Interest Period, plus the Applicable Margin;
and (iii) if any other Obligation (including, to the extent permitted by law,
interest not paid when due), at the Base Rate in effect from time to time,
plus
the Applicable Margin for Base Rate Revolver Loans. Interest shall accrue from
the date the Loan is advanced or the Obligation is incurred or payable, until
paid by Borrowers. If a Loan is repaid on the same day made, one day’s interest
shall accrue.
(b) During
an
Insolvency Proceeding with respect to any Borrower, or during any other Event
of
Default if Agent or Required Lenders in their discretion so elect, Obligations
shall bear interest at the Default Rate. Each Borrower acknowledges that the
cost and expense to Agent and each Lender due to an Event of Default are
difficult to ascertain and that the Default Rate is a fair and reasonable
estimate to compensate Agent and Lenders for such added cost and
expense.
(c) Interest
accrued on the Loans shall be due and payable in arrears, (i) on the first
day
of each month and, for any LIBOR Loan, the last day of its Interest Period;
(ii)
on any date of prepayment, with respect to the principal amount of Loans being
prepaid; and (iii) on the Commitment Termination Date. Interest accrued on
any
other Obligations shall be due and payable as provided in the Loan Documents
and, if no payment date is specified, shall be due and payable on
demand.
Notwithstanding the foregoing, interest accrued at the Default Rate shall be
due
and payable on
demand.
3.1.2
Application
of Adjusted LIBOR to Outstanding Loans.
(a) Borrowers
may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Loans
to,
or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR
Loan. During any Default or Event of Default, Agent may (and shall at the
direction of Required Lenders) declare that no Loan may be made, converted
or
continued as a LIBOR Loan.
(b) Whenever
Borrowers desire to convert or continue Loans as LIBOR Loans, Borrower Agent
shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m.
at least two Business Days before the requested conversion or continuation
date.
Promptly after receiving any such notice, Agent shall notify each Lender
thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall
specify the aggregate principal amount of Loans to be converted or continued,
the conversion or continuation date (which shall be a Business Day), and the
duration of the Interest Period (which shall be deemed to be one month if not
specified). If, upon the expiration of any Interest Period in respect of any
LIBOR Loans, Borrowers shall have failed to deliver a Notice of
Conversion/Continuation, they shall be deemed to have elected to convert such
Loans into Base Rate Loans.
30
3.1.3
Interest
Periods.
In
connection with the making, conversion or continuation of any LIBOR Loans,
Borrowers shall select an interest period (“Interest
Period”)
to
apply, which interest period shall be one, two, three or six months;
provided,
however,
that:
(a) the
Interest Period shall commence on the date the Loan is made or continued as,
or
converted into, a LIBOR Loan, and shall expire on the numerically corresponding
day in the calendar month at its end;
(b) if
any
Interest Period commences on a day for which there is no corresponding day
in
the calendar month at its end or if such corresponding day falls after the
last
Business Day of such month, then the Interest Period shall expire on the last
Business Day of such month; and if any Interest Period would expire on a day
that is not a Business Day, the period shall expire on the next Business Day;
and
(c) no
Interest Period shall extend beyond the Revolver Termination Date.
3.1.4
Interest
Rate Not Ascertainable.
If
Agent shall determine that on any date for determining Adjusted LIBOR, due
to
any circumstance affecting the London interbank market, adequate and fair means
do not exist for ascertaining such rate on the basis provided herein, then
Agent
shall immediately notify Borrowers of such determination. Until Agent notifies
Borrowers that such circumstance no longer exists, the obligation of Lenders
to
make LIBOR Loans shall be suspended, and no further Loans may be converted
into
or continued as LIBOR Loans.
3.2 Fees.
3.2.1
Unused
Line Fee.
Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders, a fee equal
to the per annum percentage set forth below, as determined by the EBITDA
(measured on the first day of each Fiscal Quarter, on a trailing twelve month
basis) for the immediately preceding Fiscal Quarter, times the amount by which
the Revolver Commitments exceed the average daily balance of Revolver Loans
and
stated amount of Letters of Credit during any month. Such fee shall be payable
in arrears, on the first day of each month and on the Commitment Termination
Date.
Level
|
EBITDA
|
Unused
Line
Fee
|
|||||
I
|
|
<
10,000,000
|
0.375
|
%
|
|||
II
|
|
>10,000,000
and < $12,000,000
|
0.250
|
%
|
|||
III
|
|
>12,000,000
and < $15,000,000
|
0.250
|
%
|
|||
IV
|
|
>15,000,000
and < $25,000,000
|
0.250
|
%
|
|||
V
|
≥$25,000,000
|
0.250
|
%
|
||||
31
Until
October 1, 2006, the unused line fee shall be determined as if Level III were
applicable. Effective October 1, 2006, the unused line fee shall be subject
to
increase or decrease based on the EBITDA (measured on a trailing 12 month basis)
as set forth in the financial statements and corresponding Compliance
Certificate for the immediately preceding Fiscal Quarter, which change shall
be
effective on the first Business Day of the calendar month that occurs more
than
10 days following receipt. If, by the first Business Day of a month following
any Fiscal Quarter, any financial statements and Compliance Certificate due
in
the preceding month have not been received, then the unused line fee shall
be
determined as if Level I were applicable, from such day until the first Business
Day of the Fiscal Quarter following actual receipt.
3.2.2
LC
Facility Fees.
Borrowers shall pay (a) to Agent, for the Pro Rata benefit of Lenders, a fee
equal to the Applicable Margin in effect for LIBOR Revolver Loans times the
average daily stated amount of Letters of Credit, which fee shall be payable
monthly in arrears, on the first day of each month; (b) to Agent, for its own
account, a fronting fee equal to 0.125% of the stated amount of each Letter
of
Credit, which fee shall be payable upon issuance of the Letter of Credit and
on
each anniversary date of such issuance, and shall be payable on any increase
in
stated amount made between any such dates; and (c) to Issuing Bank, for its
own
account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred. During an Event of
Default, the fee payable under clause (a) shall be increased by 2% per
annum.
3.2.3
Closing
Fee.
Borrowers shall pay to Agent, for the Pro Rata benefit of the Lenders, a closing
fee equal to the greater of (i) $187,500, or (ii) 0.75% of the total Commitments
of all Lenders as of the Closing Date, which shall be paid on the Closing
Date.
3.3 Computation
of Interest, Fees, Yield Protection.
All
interest, as well as fees and other charges calculated on a per annum basis,
shall be computed for the actual days elapsed, based on a year of 360 days.
Each
determination by Agent of any interest, fees or interest rate hereunder shall
be
final, conclusive and binding for all purposes, absent manifest error. All
fees
shall be fully earned when due and shall not be subject to rebate or refund,
nor
subject to proration except as specifically provided herein. All fees payable
under Section 3.2
are
compensation for services and are not, and shall not be deemed to be, interest
or any other charge for the use, forbearance or detention of money. A
certificate as to amounts payable by Borrowers under Section 3.4,
3.6, 3.7, 3.9
or
5.9,
submitted to Borrowers by Agent or the affected Lender, as applicable, shall
be
final, conclusive and binding for all purposes, absent manifest
error.
3.4 Reimbursement
Obligations.
Borrowers shall reimburse Agent for all Extraordinary Expenses. Borrowers shall
also reimburse Agent for all reasonable legal, accounting, appraisal,
consulting, and other fees, costs and expenses incurred by it in connection
with
(a) negotiation and preparation of any Loan Documents, including any amendment
or other modification thereof; (b) administration of and actions relating to
any
Collateral, Loan Documents and transactions contemplated thereby, including
any
actions taken to perfect or maintain priority of Agent’s Liens on any
Collateral, to maintain any insurance required hereunder or to verify
Collateral; and (c) subject to the limits of Section 10.1.1(b),
each
inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agent’s personnel or a third party. All legal, accounting
and consulting fees shall be charged to Borrowers by Agent’s professionals at
their full hourly rates, regardless of any reduced or alternative fee billing
arrangements that Agent, any Lender or any of their Affiliates may have with
such professionals with respect to this or any other transaction. All amounts
reimbursable by Borrowers under this Section shall constitute Obligations
secured by the Collateral and shall be payable on
demand.
32
3.5 Illegality.
Notwithstanding anything to the contrary herein, if (a) any change in any law
or
interpretation thereof by any Governmental Authority makes it unlawful for
a
Lender to make or maintain a LIBOR Loan or to maintain any Commitment with
respect to LIBOR Loans or (b) a Lender determines that the making or continuance
of a LIBOR Loan has become impracticable as a result of a circumstance that
adversely affects the London interbank market or the position of such Lender
in
such market, then such Lender shall give notice thereof to Agent and Borrowers
and may (i) declare that LIBOR Loans will not thereafter be made by such Lender,
whereupon any request for a LIBOR Loan from such Lender shall be deemed to
be a
request for a Base Rate Loan unless such Lender’s declaration has been withdrawn
(and it shall be withdrawn promptly upon cessation of the circumstances
described in clause (a) or (b) above); and/or (ii) require that all outstanding
LIBOR Loans made by such Lender be converted to Base Rate Loans immediately,
in
which event all outstanding LIBOR Loans of such Lender shall be immediately
converted to Base Rate Loans.
3.6 Increased
Costs.
If, by
reason of (a) the introduction of or any change (including any change by way
of
imposition or increase of Statutory Reserves or other reserve requirements)
in
any law or interpretation thereof, or (b) the compliance with any guideline
or
request from any Governmental Authority or other Person exercising control
over
banks or financial institutions generally (whether or not having the force
of
law):
(i) a
Lender
shall be subject to any Tax with respect to any LIBOR Loan or Letter of Credit
or its obligation to make LIBOR Loans, issue Letters of Credit or participate
in
LC Obligations, or a change shall result in the basis of taxation of any payment
to a Lender with respect to its LIBOR Loans or its obligation to make LIBOR
Loans, issue Letters of Credit or participate in LC Obligations (except for
Excluded Taxes); or
(ii) any
reserve (including any imposed by the Board of Governors), special deposits
or
similar requirement against assets of, deposits with or for the account of,
or
credit extended by, a Lender shall be imposed or deemed applicable, or any
other
condition affecting a Lender’s LIBOR Loans or obligation to make LIBOR Loans,
issue Letters of Credit or participate in LC Obligations shall be imposed on
such Lender or the London interbank market;
and
as a
result there shall be an increase in the cost to such Lender of agreeing to
make
or making, funding or maintaining LIBOR Loans, Letters of Credit or
participations in LC Obligations (except to the extent already included in
determination of Adjusted LIBOR), or there shall be a reduction in the amount
receivable by such Lender, then the Lender shall promptly notify Borrowers
and
Agent of such event, and Borrowers shall, within five days following demand
therefor, pay such Lender the amount of such increased costs or reduced
amounts.
33
If
a
Lender determines that, because of circumstances described above or any other
circumstances arising hereafter affecting such Lender, the London interbank
market or the Lender’s position in such market, Adjusted LIBOR or its Applicable
Margin, as applicable, will not adequately and fairly reflect the cost to such
Lender of funding LIBOR Loans, issuing Letters of Credit or participating in
LC
Obligations, then (A) the Lender shall promptly notify Borrowers and Agent
of
such event; (B) such Lender’s obligation to make LIBOR Loans, issue Letters of
Credit or participate in LC Obligations shall be immediately suspended, until
each condition giving rise to such suspension no longer exists; and (C) such
Lender shall make a Base Rate Loan as part of any requested Borrowing of LIBOR
Loans, which Base Rate Loan shall, for all purposes, be considered part of
such
Borrowing.
3.7 Capital
Adequacy.
If a
Lender determines that any introduction of or any change in a Capital Adequacy
Regulation, any change in the interpretation or administration of a Capital
Adequacy Regulation by a Governmental Authority charged with interpretation
or
administration thereof, or any compliance by such Lender or any Person
controlling such Lender with a Capital Adequacy Regulation, increases the amount
of capital required or expected to be maintained by such Lender or Person
(taking into consideration its capital adequacy policies and desired return
on
capital) as a consequence of such Lender’s Commitments, Loans, participations in
LC Obligations or other obligations under the Loan Documents, then Borrowers
shall, within five days following demand therefor, pay such Lender an amount
sufficient to compensate for such increase. A Lender’s demand for payment shall
set forth the nature of the occurrence giving rise to such compensation and
a
calculation of the amount to be paid. In determining such amount, the Lender
may
use any reasonable averaging and attribution method.
3.8 Mitigation.
Each
Lender agrees that, upon becoming aware that it is subject to Section 3.5,
3.6, 3.7
or
5.9,
it will
take reasonable measures to reduce Borrowers’ obligations under such Sections,
including funding or maintaining its Commitments or Loans through another
office, as long as use of such measures would not adversely affect the Lender’s
Commitments, Loans, business or interests, and would not be inconsistent with
any internal policy or applicable legal or regulatory restriction.
3.9 Funding
Losses.
If for
any reason (other than default by a Lender) (a) any Borrowing of, or conversion
to or continuation of, a LIBOR Loan does not occur on the date specified
therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether
or not withdrawn), (b) any repayment or conversion of a LIBOR Loan occurs on
a
day other than the end of its Interest Period, or (c) Borrowers fail to repay
a
LIBOR Loan when required hereunder, then Borrowers shall pay to Agent its
customary administrative charge and to each Lender all losses and expenses
that
it sustains as a consequence thereof, including any loss or expense arising
from
liquidation or redeployment of funds or from fees payable to terminate deposits
of matching funds. Lenders shall not be required to purchase Dollar deposits
in
the London interbank market or any other offshore Dollar market to fund any
LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender
had purchased such deposits to fund its LIBOR Loans.
34
3.10 Maximum
Interest.
In no
event shall interest, charges or other amounts that are contracted for, charged
or received by Agent and Lenders pursuant to any Loan Documents and that are
deemed interest under Applicable Law (“interest”)
exceed
the highest rate permissible under Applicable Law (“maximum
rate”).
If,
in any month, any interest rate, absent the foregoing limitation, would have
exceeded the maximum rate, then the interest rate for that month shall be the
maximum rate and, if in a future month, that interest rate would otherwise
be
less than the maximum rate, then the rate shall remain at the maximum rate
until
the amount of interest actually paid equals the amount of interest which would
have accrued if it had not been limited by the maximum rate. If, upon Full
Payment of the Obligations, the total amount of interest actually paid under
the
Loan Documents is less than the total amount of interest that would, but for
this Section, have accrued under the Loan Documents, then Borrowers shall,
to
the extent permitted by Applicable Law, pay to Agent, for the account of
Lenders, (a) the lesser of (i) the amount of interest that would have been
charged if the maximum rate had been in effect at all times, or (ii) the amount
of interest that would have accrued had the interest rate otherwise set forth
in
the Loan Documents been in effect, minus
(b) the
amount of interest actually paid under the Loan Documents. If a court of
competent jurisdiction determines that Agent or any Lender has received interest
in excess of the maximum amount allowed under Applicable Law, such excess shall
be deemed received on account of, and shall automatically be applied to reduce,
Obligations other than interest (regardless of any erroneous application thereof
by Agent or any Lender), and upon Full Payment of the Obligations, any balance
shall be refunded to Borrowers. In determining whether any excess interest
has
been charged or received by Agent or any Lender, all interest at any time
charged or received from Borrowers in connection with the Loan Documents shall,
to the extent permitted by Applicable Law, be amortized, prorated, allocated
and
spread in equal parts throughout the full term of the Obligations.
SECTION
4.
LOAN ADMINISTRATION
4.1 Manner
of Borrowing and Funding Revolver Loans.
4.1.1
Notice
of Borrowing.
(a) Whenever
Borrowers desire funding of a Borrowing of Revolver Loans, Borrower Agent shall
give Agent a Notice of Borrowing. Such notice must be received by Agent no
later
than 11:00 a.m. (i) on the Business Day of the requested funding date, in the
case of Base Rate Loans, and (ii) at least two Business Days prior to the
requested funding date, in the case of LIBOR Loans. Notices received after
11:00
a.m. shall be deemed received on the next Business Day. Each Notice of Borrowing
shall be irrevocable and shall specify (A) the principal amount of the
Borrowing, (B) the requested funding date (which must be a Business Day), (C)
whether the Borrowing is to be made as Base Rate Loans or LIBOR Loans, and
(D)
in the case of LIBOR Loans, the duration of the applicable Interest Period
(which shall be deemed to be one month if not specified).
(b) Unless
payment is otherwise timely made by Borrowers, the becoming due of any
Obligations (whether principal, interest, fees or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt)
shall be deemed to be a request for Base Rate Revolver Loans on the due date,
in
the amount of such Obligations. The proceeds of such Revolver Loans shall be
disbursed as direct payment of the relevant Obligation.
35
(c) If
Borrowers establish a controlled disbursement account with Agent or any
Affiliate of Agent, then the presentation for payment of any check or other
item
of payment drawn on such account at a time when there are insufficient funds
to
cover it shall be deemed to be a request for Base Rate Revolver Loans on the
date of such presentation, in the amount of the check and items presented for
payment. The proceeds of such Revolver Loans may be disbursed directly to the
controlled disbursement account or other appropriate account.
4.1.2
Fundings
by Lenders.
Each
Lender shall timely honor its Revolver Commitment by funding its Pro Rata share
of each Borrowing of Revolver Loans that is properly requested hereunder. Except
for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify
Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by
12:00
noon on the proposed funding date for Base Rate Loans or by 3:00 p.m. at least
two Business Days before any proposed funding of LIBOR Loans. Each Lender shall
fund to Agent such Lender’s Pro Rata share of the Borrowing to the account
specified by Agent in immediately available funds not later than 2:00 p.m.
on
the requested funding date, unless Agent’s notice is received after the times
provided above, in which event Lender shall fund its Pro Rata share by 11:00
a.m. on the next Business Day. Subject to its receipt of such amounts from
Lenders, Agent shall disburse the proceeds of the Revolver Loans as directed
by
Borrower Agent. Unless Agent shall have received (in sufficient time to act)
written notice from a Lender that it does not intend to fund its Pro Rata share
of a Borrowing, Agent may assume that such Lender has deposited or promptly
will
deposit its share with Agent, and Agent may disburse a corresponding amount
to
Borrowers. If a Lender’s share of any Borrowing is not in fact received by
Agent, then Borrowers agree to repay to Agent on demand the amount of such
share, together with interest thereon from the date disbursed until repaid,
at
the rate applicable to such Borrowing.
4.1.3
Swingline
Loans; Settlement.
(a) Agent
may, but shall not be obligated to, advance Swingline Loans to Borrowers out
of
Agent’s own funds, up to an aggregate outstanding amount of $5,000,000, unless
the funding is specifically required to be made by all Lenders hereunder. Each
Swingline Loan shall constitute a Revolver Loan for all purposes, except that
payments thereon shall be made to Agent for its own account. The obligation
of
Borrowers to repay Swingline Loans shall be evidenced by the records of Agent
and need not be evidenced by any promissory note.
(b) To
facilitate administration of the Revolver Loans, Lenders and Agent agree (which
agreement is solely among them, and not for the benefit of or enforceable by
any
Borrower) that settlement among them with respect to Swingline Loans and other
Revolver Loans may take place periodically on a date determined from time to
time by Agent, which shall occur at least once every five Business Days. On
each
settlement date, settlement shall be made with each Lender in accordance with
the Settlement Report delivered by Agent to Lenders. Between settlement dates,
Agent may in its discretion apply payments on Revolver Loans to Swingline Loans,
regardless of any designation by Borrower or any provision herein to the
contrary. Each Lender’s obligation to make settlements with Agent is absolute
and unconditional, without offset, counterclaim or other defense, and whether
or
not the Commitments have terminated, an Overadvance exists, or the conditions
in
Section
6
are
satisfied. If, due to an Insolvency Proceeding with respect to a Borrower or
otherwise, any Swingline Loan may not be settled among Lenders hereunder, then
each Lender shall be deemed to have purchased from Agent a Pro Rata
participation in each unpaid Swingline Loan and shall transfer the amount of
such participation to Agent, in immediately available funds, within one Business
Day after Agent’s request therefor. In its discretion, Agent may on any
settlement date permit Swingline Loans in an aggregate principal amount not
to
exceed $1,000,000 to remain outstanding, while requiring settlement of the
other
outstanding Swingline Loans among the Lenders.
36
4.1.4
Notices.
Each
Borrower authorizes Agent and Lenders to extend, convert or continue Loans,
effect selections of interest rates, and transfer funds to or on behalf of
Borrowers based on telephonic or e-mailed instructions. Borrowers shall confirm
each such request by prompt delivery to Agent of a Notice of Borrowing or Notice
of Conversion/Continuation, if applicable, but if it differs in any material
respect from the action taken by Agent or Lenders, the records of Agent and
Lenders shall govern. Neither Agent nor any Lender shall have any liability
for
any loss suffered by a Borrower as a result of Agent or any Lender acting upon
its understanding of telephonic or e-mailed instructions from a person believed
in good faith by Agent or any Lender to be a person authorized to give such
instructions on a Borrower’s behalf.
4.2 Defaulting
Lender.
If a
Lender fails to make any payment to Agent that is required hereunder, Agent
may
(but shall not be required to), in its discretion, retain payments that would
otherwise be made to such defaulting Lender hereunder, apply the payments to
such Lender’s defaulted obligations or readvance the funds to Borrowers in
accordance with this Agreement. The failure of any Lender to fund a Loan or
to
make a payment in respect of a LC Obligation shall
not
relieve any other Lender of its obligations hereunder, and no Lender shall
be
responsible for default by another Lender. Lenders and Agent agree (which
agreement is solely among them, and not for the benefit of or enforceable by
any
Borrower) that, solely for purposes of determining a defaulting Lender’s right
to vote on matters relating to the Loan Documents and to share in payments,
fees
and Collateral proceeds thereunder, a defaulting Lender shall not be deemed
to
be a “Lender” until all its defaulted obligations have been cured.
4.3 Number
and Amount of LIBOR Loans; Determination of Rate.
For ease
of administration, all LIBOR Revolver Loans having the same length and beginning
date of their Interest Periods shall be aggregated together, and such Loans
shall be allocated among Lenders on a Pro Rata basis. No more than 4 aggregated
LIBOR Loans may be outstanding at any time, and each aggregate LIBOR Loan when
made, continued or converted shall be in a minimum amount of $1,000,000, or
an
increment of $500,000 in excess thereof. Upon determining Adjusted LIBOR for
any
Interest Period requested by Borrowers, Agent shall promptly notify Borrowers
thereof by telephone or electronically and, if requested by Borrowers, shall
confirm any telephonic notice in writing.
4.4 Borrower
Agent.
Each
Borrower hereby designates Borrower Agent as its representative and agent for
all purposes under the Loan Documents, including requests for Loans and Letters
of Credit, designation of interest rates, delivery or receipt of communications
with Agent, Issuing Bank or any Lender, preparation and delivery of Borrowing
Base and financial reports, receipt and payment of Obligations, requests for
waivers, amendments or other accommodations, actions under the Loan Documents
(including in respect of compliance with covenants), and all other dealings
with
Agent, Issuing Bank or any Lender. Borrower Agent hereby accepts such
appointment. Agent and Lenders shall be entitled to rely upon, and shall be
fully protected in relying upon, any notice or communication (including any
notice of borrowing) delivered by Borrower Agent on behalf of any Borrower.
Agent and Lenders may give any notice or communication with a Borrower hereunder
to Borrower Agent on behalf of such Borrower. Agent shall have the right, in
its
discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents. Each Borrower agrees that any notice, election,
communication, representation, agreement or undertaking made on its behalf
by
Borrower Agent shall be binding upon and enforceable against it.
37
4.5 One
Obligation.
The
Loans, LC Obligations and other Obligations shall constitute one general
obligation of Borrowers and (unless otherwise expressly provided in any Loan
Document) shall be secured by Agent’s Lien upon all Collateral; provided,
however,
that
Agent and each Lender shall be deemed to be a creditor of, and the holder of
a
separate claim against, each Borrower to the extent of any Obligations jointly
or severally owed by such Borrower.
4.6 Effect
of Termination.
On the
effective date of any termination of the Commitments, all Obligations shall
be
immediately due and payable, and any Lender may terminate its and its
Affiliates’ Bank Products (including, with the consent of Agent, any Cash
Management Services). All undertakings of Borrowers contained in the Loan
Documents shall survive any termination, and Agent shall retain its Liens in
the
Collateral and all of its rights and remedies under the Loan Documents until
Full Payment of the Obligations. Notwithstanding Full Payment of the
Obligations, Agent shall not be required to terminate its Liens in any
Collateral unless, with respect to any damages Agent may incur as a result
of
the dishonor or return of Payment Items applied to Obligations, Agent receives
(a) a written agreement, executed by Borrowers and any Person whose advances
are
used in whole or in part to satisfy the Obligations, indemnifying Agent and
Lenders from any such damages; or (b) such Cash Collateral as Agent, in its
discretion, deems necessary to protect against any such damages. The provisions
of Sections 2.3,
3.4, 3.6, 3.7, 3.9, 5.5, 5.9, 12, 14.2
and this
Section, and the obligation of each Obligor and Lender with respect to each
indemnity given by it in any Loan Document, shall survive Full Payment of the
Obligations and any release relating to this credit facility.
SECTION
5.
PAYMENTS
5.1 General
Payment Provisions.
All
payments of Obligations shall be made in Dollars, without offset, counterclaim
or defense of any kind, free of (and without deduction for) any Taxes, and
in
immediately available funds, not later than 12:00 noon on the due date. Any
payment after such time shall be deemed made on the next Business Day. Borrowers
may, at the time of payment, specify to Agent the Obligations to which such
payment is to be applied, but Agent shall in all events retain the right to
apply such payment in such manner as Agent, subject to the provisions hereof,
may determine to be appropriate. If any payment under the Loan Documents shall
be stated to be due on a day other than a Business Day, the due date shall
be
extended to the next Business Day and such extension of time shall be included
in any computation of interest and fees. Any payment of a LIBOR Loan prior
to
the end of its Interest Period shall be accompanied by all amounts due under
Section 3.9.
Any
prepayment of Loans shall be applied first to Base Rate Loans and then to LIBOR
Loans.
38
5.2 Repayment
of Revolver Loans.
Revolver
Loans shall be due and payable in full on the Revolver Termination Date, unless
payment is sooner required hereunder. Revolver Loans may be prepaid from time
to
time, without penalty or premium. If any Asset Disposition includes the
disposition of Accounts or Inventory, then Net Proceeds equal to the greater
of
(a) the net book value of such Accounts and Inventory, or (b) the reduction
in
the Borrowing Base upon giving effect to such disposition, shall be applied
to
the Revolver Loans. Notwithstanding anything herein to the contrary, if an
Overadvance exists, Borrowers shall, on the sooner of Agent’s demand or the
first Business Day after any Borrower has knowledge thereof, repay the
outstanding Revolver Loans in an amount sufficient to reduce the principal
balance of Revolver Loans to the Borrowing Base.
5.3 [Intentionally
Omitted].
5.4 Payment
of Other Obligations.
Obligations other than Loans, including LC Obligations and Extraordinary
Expenses, shall be paid by Borrowers as provided in the Loan Documents or,
if no
payment date is specified, on
demand.
5.5 Marshaling;
Payments Set Aside.
None of
Agent or Lenders shall be under any obligation to marshal any assets in favor
of
any Obligor or against any Obligations. If any Obligor makes a payment to Agent
or Lenders, or if Agent or any Lender receives payment from the proceeds of
Collateral, exercise of setoff or otherwise, and such payment is subsequently
invalidated or required to be repaid to a trustee, receiver or any other Person,
then the Obligations originally intended to be satisfied, and all Liens, rights
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been received and any enforcement or setoff had
not
occurred.
5.6 Post-Default
Allocation of Payments.
5.6.1
Allocation.
Notwithstanding anything herein to the contrary, during an Event of Default,
monies to be applied to the Obligations, whether arising from payments by
Obligors, realization on Collateral, setoff or otherwise, shall be allocated
as
follows:
(a) first,
to all
costs and expenses, including Extraordinary Expenses, owing to
Agent;
(b) second,
to all
amounts owing to Agent on Swingline Loans or Protective Advances;
(c) third,
to all
amounts owing to Issuing Bank on LC Obligations;
39
(d) fourth,
to all
Obligations constituting fees (excluding amounts relating to Bank
Products);
(e) fifth,
to all
Obligations constituting interest (excluding amounts relating to Bank
Products);
(f) sixth,
to
provide Cash Collateral for outstanding Letters of Credit;
(g) seventh,
to all
other Obligations, other than Bank Product Debt; and
(h) last,
to Bank
Product Debt.
Amounts
shall be applied to each category of Obligations set forth above until Full
Payment thereof and then to the next category. If amounts are insufficient
to
satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. The allocations set forth in this Section are
solely to determine the rights and priorities of Agent and Lenders as among
themselves, and may be changed by agreement among them without the consent
of
any Obligor. This Section is not for the benefit of or enforceable by any
Borrower.
5.6.2
Erroneous
Application.
Agent
shall not be liable for any application of amounts made by it in good faith
and,
if any such application is subsequently determined to have been made in error,
the sole recourse of any Lender or other Person to which such amount should
have
been made shall be to recover the amount from the Person that actually received
it (and, if such amount was received by any Lender, such Lender hereby agrees
to
return it).
5.7 Application
of Payments.
The
ledger balance in the main Dominion Account as of the end of a Business Day
shall be applied to the Obligations at the beginning of the next Business Day.
Each Borrower irrevocably waives the right to direct the application of any
payments or Collateral proceeds, and agrees that Agent shall have the
continuing, exclusive right to apply and reapply same against the Obligations,
in such manner as Agent deems advisable, notwithstanding any entry by Agent
in
its records. If, as a result of Agent’s receipt of Payment Items or proceeds of
Collateral, a credit balance exists, the balance shall not accrue interest
in
favor of Borrowers and shall be made available to Borrowers as long as no
Default or Event of Default exists.
5.8 Loan
Account; Account Stated.
5.8.1
Loan
Account.
Agent
shall maintain in accordance with its usual and customary practices an account
or accounts (“Loan
Account”)
evidencing the Debt of Borrowers resulting from each Loan or issuance of a
Letter of Credit from time to time. Any failure of Agent to record anything
in
the Loan Account, or any error in doing so, shall not limit or otherwise affect
the obligation of Borrowers to pay any amount owing hereunder. Agent may
maintain a single Loan Account in the name of Borrower Agent, and each Borrower
confirms that such arrangement shall have no effect on the joint and several
character of its liability for the Obligations.
40
5.8.2
Entries
Binding.
Entries
made in the Loan Account shall constitute presumptive evidence of the
information contained therein. If any information contained in the Loan Account
is provided to or inspected by any Person, then such information shall be
conclusive and binding on such Person for all purposes absent manifest error,
except to the extent such Person notifies Agent in writing within 30 days after
receipt or inspection that specific information is subject to
dispute.
5.9 Taxes.
If any
Taxes (except Excluded Taxes) shall be payable by any party due to the
execution, delivery, issuance or recording of any Loan Documents, or the
creation or repayment of any Obligations, Borrowers shall pay (and shall
promptly reimburse Agent and Lenders for their payment of) all such Taxes,
including any interest and penalties thereon, and will indemnify and hold
harmless Indemnitees against all liability in connection therewith. If Borrowers
shall be required by Applicable Law to withhold or deduct any Taxes (except
Excluded Taxes) with respect to any sum payable under any Loan Documents, (a)
the sum payable to Agent or such Lender shall be increased as may be necessary
so that, after making all required withholding or deductions, Agent or such
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such withholding or deductions been made; (b) Borrowers shall
make such withholding or deductions; and (c) Borrowers shall pay the full amount
withheld or deducted to the relevant taxing or other authority in accordance
with Applicable Law.
5.10 Withholding
Tax Exemption.
At
least five Business Days prior to the first date for payment of interest or
fees
hereunder to a Foreign Lender, the Foreign Lender shall deliver to Borrowers
and
Agent two duly completed copies of IRS Form W-8BEN or W-8ECI (or any subsequent
replacement or substitute form therefor), certifying that such Lender can
receive payment of Obligations without deduction or withholding of any United
States federal income taxes. Each Foreign Lender shall deliver to Borrowers
and
Agent two additional copies of such form before the preceding form expires
or
becomes obsolete or after the occurrence of any event requiring a change in
the
form, as well as any amendments, extensions or renewals thereof as may be
reasonably requested by Borrowers or Agent, in each case, certifying that the
Foreign Lender can receive payment of Obligations without deduction or
withholding of any such taxes, unless an event (including any change in treaty
or law) has occurred that renders such forms inapplicable or prevents the
Foreign Lender from certifying that it can receive payments without deduction
or
withholding of such taxes. During any period that a Foreign Lender does not
or
is unable to establish that it can receive payments without deduction or
withholding of such taxes, other than by reason of an event (including any
change in treaty or law) that occurs after it becomes a Lender, Agent may
withhold taxes from payments to such Foreign Lender at the applicable statutory
and treaty rates, and Borrowers shall not be required to pay any additional
amounts under this Section as a result of such withholding.
5.11 Nature
and Extent of Each Borrower’s Liability.
5.11.1
Joint
and Several Liability.
Each
Borrower agrees that it is jointly and severally liable for, and absolutely
and
unconditionally guarantees to Agent and Lenders the prompt payment and
performance of, all Obligations and all agreements under the Loan Documents.
Each Borrower agrees that its guaranty obligations hereunder constitute a
continuing guaranty of payment and performance and not of collection, that
such
obligations shall not be discharged until Full Payment of the Obligations,
and
that such obligations are absolute and unconditional, irrespective of (a) the
genuineness, validity, regularity, enforceability, subordination or any future
modification of, or change in, any Obligations or Loan Document, or any other
document, instrument or agreement to which any Obligor is or may become a party
or liable; (b) the absence of any action to enforce this Agreement (including
this Section) or any other Loan Document, or any waiver, consent or indulgence
of any kind by Agent or any Lender with respect thereto; (c) the existence,
value or condition of, or failure to perfect a Lien or to preserve rights
against, any security or guaranty for the Obligations or any action, or the
absence of any action, by Agent or any Lender in respect thereof (including
the
release of any security or guaranty); (d) the insolvency of any Obligor; (e)
any
election by Agent or any Lender in an Insolvency Proceeding for the application
of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of
a
Lien by any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or
any
Lender against any Obligor for the repayment of any Obligations under Section
502 of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge
or
defense of a surety or guarantor, except Full Payment of all
Obligations.
41
5.11.2
Waivers.
(a) Each
Borrower expressly waives all rights that it may have now or in the future
under
any statute, at common law, in equity or otherwise, to compel Agent or Lenders
to marshal assets or to proceed against any Obligor, other Person or security
for the payment or performance of any Obligations before, or as a condition
to,
proceeding against such Borrower. It is agreed among each Borrower, Agent and
Lenders that the provisions of this Section are of the essence of the
transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters
of
Credit. Notwithstanding anything to the contrary in any Loan Document, and
except as set forth in Section 5.11.3,
each
Borrower expressly waives all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off, as well
as
all defenses available to a surety, guarantor or accommodation co-obligor.
Each
Borrower acknowledges that its guaranty pursuant to this Section is necessary
to
the conduct and promotion of its business, and can be expected to benefit such
business.
(b) Agent
and
Lenders may, in their discretion, pursue such rights and remedies as they deem
appropriate, including realization upon Collateral or any Real Estate by
judicial foreclosure or non-judicial sale or enforcement, without affecting
any
rights and remedies under this Section
5.11.
If, in
the exercise of any rights or remedies, Agent or any Lender shall forfeit any
of
its rights or remedies, including its right to enter a deficiency judgment
against any Borrower or any other Person, whether because of any applicable
laws
pertaining to “election of remedies” or otherwise, each Borrower consents to
such action by Agent or such Lender and waives any claim based upon such action,
even if the action may result in loss of any rights of subrogation that any
Borrower might otherwise have had but for such action. Any election of remedies
that results in denial or impairment of the right of Agent or any Lender to
seek
a deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations. Each Borrower waives
all
rights and defenses arising out of an election of remedies, such as nonjudicial
foreclosure with respect to any security for the Obligations, even though that
election of remedies destroys such Borrower’s rights of subrogation against any
other Person. If Agent bids at any foreclosure or trustee’s sale or at any
private sale, Agent may bid all or a portion of the Obligations and the amount
of such bid need not be paid by Agent but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Agent
or
any other Person is the successful bidder, shall be conclusively deemed to
be
the fair market value of the Collateral, and the difference between such bid
amount and the remaining balance of the Obligations shall be conclusively deemed
to be the amount of the Obligations guaranteed under this Section 5.11,
notwithstanding that any present or future law or court decision may have the
effect of reducing the amount of any deficiency claim to which Agent or any
Lender might otherwise be entitled but for such bidding at any such
sale.
42
5.11.3
Extent
of Liability; Contribution.
(a) Notwithstanding
anything herein to the contrary, each Borrower’s liability under this
Section 5.11
shall be
limited to the greater of (i) all amounts for which such Borrower is primarily
liable, as described below, and (ii) such Borrower’s Allocable
Amount.
(b) If
any
Borrower makes a payment under this Section 5.11
of any
Obligations (other than amounts for which such Borrower is primarily liable)
(a
“Guarantor
Payment”)
that,
taking into account all other Guarantor Payments previously or concurrently
made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by
such
Guarantor Payments in the same proportion that such Borrower’s Allocable Amount
bore to the total Allocable Amounts of all Borrowers, then such Borrower shall
be entitled to receive contribution and indemnification payments from, and
to be
reimbursed by, each other Borrower for the amount of such excess, pro rata
based
upon their respective Allocable Amounts in effect immediately prior to such
Guarantor Payment. The “Allocable
Amount”
for
any
Borrower shall be the maximum amount that could then be recovered from such
Borrower under this Section 5.11
without
rendering such payment voidable or avoidable under Section 548 of the Bankruptcy
Code or under any applicable state fraudulent transfer or conveyance act, or
similar statute or common law.
(c) Nothing
contained in this Section 5.11
shall
limit the liability of any Borrower to pay Loans made directly or indirectly
to
that Borrower (including Loans advanced to any other Borrower and then re-loaned
or otherwise transferred to, or for the benefit of, such Borrower), LC
Obligations relating to Letters of Credit issued to support such Borrower’s
business, and all accrued interest, fees, expenses and other related Obligations
with respect thereto, for which such Borrower shall be primarily liable for
all
purposes hereunder. Agent and Lenders shall have the right, at any time in
their
discretion, to condition Loans and Letters of Credit upon a separate calculation
of borrowing availability for each Borrower and to restrict the disbursement
and
use of such Loans and Letters of Credit to such Borrower.
5.11.4
Joint
Enterprise.
Each
Borrower has requested that Agent and Lenders make this credit facility
available to Borrowers on a combined basis, in order to finance Borrowers’
business most efficiently and economically. Borrowers’ business is a mutual and
collective enterprise, and Borrowers believe that consolidation of their credit
facility will enhance the borrowing power of each Borrower and ease the
administration of their relationship with Lenders, all to the mutual advantage
of Borrowers. Borrowers acknowledge and agree that Agent’s and Lenders’
willingness to extend credit to Borrowers and to administer the Collateral
on a
combined basis, as set forth herein, is done solely as an accommodation to
Borrowers and at Borrowers’ request.
43
5.11.5
Subordination.
Each
Borrower hereby subordinates any claims, including any right of payment,
subrogation, contribution and indemnity, that it may have at any time against
any other Obligor, howsoever arising, to the Full Payment of all
Obligations.
SECTION
6.
CONDITIONS PRECEDENT
6.1 Conditions
Precedent to Initial Loans.
In
addition to the conditions set forth in Section
6.2,
Lenders
shall not be required to fund any requested Loan, issue any Letter of Credit,
or
otherwise extend credit to Borrowers hereunder, until the date (“Closing
Date”)
that
each of the following conditions has been satisfied:
(a) Each
other Loan Document shall have been duly executed and delivered to Agent by
each
of the signatories thereto, and each Obligor shall be in compliance with all
terms thereof.
(b) Agent
shall have received acknowledgments of all filings or recordations necessary
to
perfect its Liens in the Collateral, as well as UCC and Lien searches and other
evidence satisfactory to Agent that such Liens are the only Liens upon the
Collateral, except Permitted Liens.
(c) Agent
shall have received the Related Real Estate Documents for all Real Estate
subject to a Mortgage.
(d) Agent
shall have received certificates, in form and substance satisfactory to it,
from
a knowledgeable Senior Officer of each Borrower certifying that, after giving
effect to the initial Loans and transactions hereunder, (i) such Borrower is
Solvent; (ii) no Default or Event of Default exists; (iii) the representations
and warranties set forth in Section 9
are true
and correct; and (iv) such Borrower has complied with all agreements and
conditions to be satisfied by it under the Loan Documents.
(e) Agent
shall have received a certificate of a duly authorized officer of each Obligor,
certifying (i) that attached copies of such Obligor’s Organic Documents are true
and complete, and in full force and effect, without amendment except as shown,
(ii) that an attached copy of resolutions authorizing execution and delivery
of
the Loan Documents is true and complete, and that such resolutions are in full
force and effect, were duly adopted, have not been amended, modified or revoked,
and constitute all resolutions adopted with respect to this credit facility,
and
(iii) to the title, name and signature of each Person authorized to sign the
Loan Documents. Agent may conclusively rely on this certificate until it is
otherwise notified by the applicable Obligor in writing.
44
(f) Agent
shall have received a written opinion of Xxxxxx & Xxxxxx, LLP, as well as
any local counsel to Borrowers or Agent (if requested by Agent), in form and
substance satisfactory to Agent.
(g) Agent
shall have received copies of the charter documents of each Obligor, certified
as appropriate by the Secretary of State or another official of such Obligor’s
jurisdiction of organization. Agent shall have received good standing
certificates for each Obligor, issued by the Secretary of State or other
appropriate official of such Obligor’s jurisdiction of organization and each
jurisdiction where such Obligor’s conduct of business or ownership of Property
necessitates qualification.
(h) Agent
shall have received copies of policies or certificates of insurance for the
insurance policies carried by Borrowers, all in compliance with the Loan
Documents.
(i) Agent
shall have completed its business, financial and legal due diligence of
Obligors, including a roll-forward of its previous field examination, with
results satisfactory to Agent. No material adverse change in the financial
condition of any Obligor or in the quality, quantity or value of any Collateral
shall have occurred since September 30, 2005.
(j) Borrowers
shall have paid all fees and expenses to be paid to Agent and Lenders on the
Closing Date.
(k) Agent
shall have received a Borrowing Base Certificate prepared as of a date not
more
than 2 days prior to the Closing Date.
(l) Upon
giving effect to the initial funding of Loans and issuance of Letters of Credit,
and the payment by Borrowers of all fees and expenses incurred in connection
herewith and taking into account all Availability Reserves in existence as
of
the Closing Date, Availability shall be at least $3,000,000.
(m) Agent
shall have received evidence that Borrowers’ invoices indicate that title to
sold goods shall pass from Borrower to its customer once production of the
goods
are completed and they become available to be accepted by or delivered to the
customer.
(n) Agent
shall have received copies of Existing Subordinated Debt Documents and the
other
Material Contracts as in effect on the Closing Date.
(o) Agent
shall have received a certification from the Borrower Agent that no default
or
event of default has occurred and is continuing under the Existing Subordinated
Debt Documents.
(p) Agent
shall have received duly executed agreements establishing each Dominion Account
and related lockbox with the Borrowers’ current cash management bank, in form
and substance satisfactory to Agent.
45
6.2 Conditions
Precedent to All Credit Extensions.
Agent,
Issuing Bank and Lenders shall not be required to fund any Loans, arrange for
issuance of any Letters of Credit or grant any other accommodation to or for
the
benefit of Borrowers, unless the following conditions are
satisfied:
(a) No
Default or Event of Default shall exist at the time of, or result from, such
funding, issuance or grant;
(b) The
representations and warranties of each Obligor in the Loan Documents shall
be
true and correct on the date of, and upon giving effect to, such funding,
issuance or grant (except for representations and warranties that expressly
relate to an earlier date);
(c) All
conditions precedent in any other Loan Document shall be satisfied;
(d) No
event
shall have occurred or circumstance exist that has or could reasonably be
expected to have a Material Adverse Effect; and
(e) With
respect to issuance of a Letter of Credit, the LC Conditions shall be
satisfied.
Each
request (or deemed request) by Borrowers for funding of a Loan, issuance of
a
Letter of Credit or grant of an accommodation shall constitute a representation
by Borrowers that the foregoing conditions are satisfied on the date of such
request and on the date of such funding, issuance or grant. As an additional
condition to any funding, issuance or grant, Agent shall have received such
other information, documents, instruments and agreements as it deems appropriate
in connection therewith.
6.3 Limited
Waiver of Conditions Precedent.
If
Agent, Issuing Bank or Lenders fund any Loans, arrange for issuance of any
Letters of Credit or grant any other accommodation when any conditions precedent
are not satisfied (regardless of whether the lack of satisfaction was known
or
unknown at the time), it shall not operate as a waiver of (a) the right of
Agent, Issuing Bank and Lenders to insist upon satisfaction of all conditions
precedent with respect to any subsequent funding, issuance or grant; nor (b)
any
Default or Event of Default due to such failure of conditions or
otherwise.
6.4 Conditions
Subsequent.
6.4.1
Within 30 days after the Closing Date, Agent shall receive evidence that the
Dominion Account and related lockbox have been established with Bank of America,
in form and substance, and with financial institutions, satisfactory to
Agent.
6.4.2
Within 60 days after the Closing Date, Agent shall have received vehicle titles
for all vehicles owned by Borrowers together with all documents deemed necessary
by Agent to perfect its security interest in such vehicles.
46
SECTION
7.
COLLATERAL
7.1 Grant
of Security Interest.
To
secure the prompt payment and performance of all Obligations, each Borrower
hereby grants to Agent, for the benefit of Secured Parties, a continuing
security interest in and Lien upon all Property of such Borrower, including
all
of the following Property, whether now owned or hereafter acquired, and wherever
located:
(a) all
Accounts;
(b) all
Chattel Paper, including electronic chattel paper;
(c) all
Commercial Tort Claims;
(d) all
Deposit Accounts;
(e) all
Documents;
(f) all
General Intangibles, including Payment Intangibles, Software and Intellectual
Property;
(g) all
Goods, including Inventory, Equipment and fixtures;
(h) all
Instruments;
(i) all
Investment Property;
(j) all
Letter-of-Credit Rights;
(k) all
Supporting Obligations;
(l) all
monies, whether or not in the possession or under the control of Agent, a
Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash
Collateral;
(m) all
accessions to, substitutions for, and all replacements, products, and cash
and
non-cash proceeds of the foregoing, including proceeds of and unearned premiums
with respect to insurance policies, and claims against any Person for loss,
damage or destruction of any Collateral; and
(n) all
books
and records (including customer lists, files, correspondence, tapes, computer
programs, print-outs and computer records) pertaining to the
foregoing.
7.2 Lien
on Deposit Accounts; Cash Collateral.
7.2.1
Deposit
Accounts.
To
further secure the prompt payment and performance of all Obligations, each
Borrower hereby grants to Agent, for the benefit of Secured Parties, a
continuing security interest in and Lien upon all of such Borrower’s right,
title and interest in and to each Deposit Account of such Borrower and any
deposits or other sums at any time credited to any such Deposit Account,
including any sums in any blocked or lockbox accounts or in any accounts into
which such sums are swept. Each Borrower authorizes and directs each bank or
other depository to deliver to Agent, on a daily basis, all balances in each
Deposit Account maintained by such Borrower with such depository for application
to the Obligations then outstanding. Each Borrower irrevocably appoints Agent
as
such Borrower’s attorney-in-fact to collect such balances to the extent any such
delivery is not so made.
47
7.2.2
Cash
Collateral.
Any
Cash Collateral, including Cash Collateral provided pursuant to Section
2.3.3,
may be
invested, in Agent’s discretion, in Cash Equivalents, but Agent shall have no
duty to do so, regardless of any agreement, understanding or course of dealing
with any Borrower, and shall have no responsibility for any investment or loss.
Each Borrower hereby grants to Agent, for the benefit of Secured Parties, a
security interest in all Cash Collateral held from time to time and all proceeds
thereof, as security for the Obligations, whether such Cash Collateral is held
in the Cash Collateral Account or elsewhere. Agent may apply Cash Collateral
to
the payment of any Obligations, in such order as Agent may elect, as they become
due and payable. The Cash Collateral Account and all Cash Collateral shall
be
under the sole dominion and control of Agent. No Borrower or other Person
claiming through or on behalf of any Borrower shall have any right to any Cash
Collateral, until Full Payment of all Obligations.
7.3 Real
Estate Collateral.
7.3.1 Lien
on Real Estate.
The
Obligations shall also be secured by Mortgages upon all Real Estate owned by
Borrowers, including the Mortgaged Property. The Mortgages shall be duly
recorded, at Borrowers’ expense, in each office where such recording is required
to constitute a fully perfected Lien on the Real Estate covered thereby. If
any
Borrower acquires Real Estate hereafter, Borrowers shall, within 30 days,
execute, deliver and record a Mortgage sufficient to create a first priority
Lien in favor of Agent on such Real Estate, and shall deliver all Related Real
Estate Documents.
7.3.2 Collateral
Assignment of Leases.
To
further secure the prompt payment and performance of all Obligations, each
Borrower hereby transfers and assigns to Agent, for the benefit of Secured
Parties, all of such Borrower’s right, title and interest in, to and under all
now or hereafter existing leases of real Property to which such Borrower is
a
party, whether as lessor or lessee, and all extensions, renewals and
modifications thereof.
7.4 Other
Collateral.
7.4.1
Commercial
Tort Claims.
Borrowers shall promptly notify Agent in writing if any Borrower has a
Commercial Tort Claim (other than, as long as no Default or Event of Default
exists, a Commercial Tort Claim for less than $100,000) and, upon Agent’s
request, shall promptly execute such documents and take such actions as Agent
deems appropriate to confer upon Agent (for the benefit of Secured Parties)
a
duly perfected, first priority Lien upon such claim.
48
7.4.2
Certain
After-Acquired Collateral.
Borrowers shall promptly notify Agent in writing if, after the Closing Date,
any
Borrower obtains any interest in any Collateral consisting of Deposit Accounts,
Chattel Paper, Documents, Instruments, Intellectual Property, Investment
Property or Letter-of-Credit Rights and, upon Agent’s request, shall promptly
execute such documents and take such actions as Agent deems appropriate to
effect Agent’s duly perfected, first priority Lien upon such Collateral,
including obtaining any appropriate possession, control agreement or Lien
Waiver. If any Collateral is in the possession of a third party, at Agent’s
request, Borrowers shall obtain an acknowledgment that such third party holds
the Collateral for the benefit of Agent.
7.5 No
Assumption of Liability.
The
Lien on Collateral granted hereunder is given as security only and shall not
subject Agent or any Lender to, or in any way modify, any obligation or
liability of Borrowers relating to any Collateral.
7.6 Further
Assurances.
Promptly upon request, Borrowers shall deliver such instruments, assignments,
title certificates, or other documents or agreements, and shall take such
actions, as Agent deems appropriate under Applicable Law to evidence or perfect
its Lien on any Collateral, or otherwise to give effect to the intent of this
Agreement. Each Borrower authorizes Agent to file any financing statement that
indicates the Collateral as “all assets” or “all personal property” of such
Borrower, or words to similar effect, and ratifies any action taken by Agent
before the Closing Date to effect or perfect its Lien on any
Collateral.
7.7 Foreign
Subsidiary Stock.
Notwithstanding Section 7.1,
the
Collateral shall include only 65% of the voting stock of any Foreign
Subsidiary.
SECTION
8.
COLLATERAL ADMINISTRATION
8.1 Borrowing
Base Certificates.
By
Tuesday of each week, Borrowers shall deliver to Agent (and Agent shall promptly
deliver same to Lenders) a Borrowing Base Certificate prepared as of the close
of business of the previous week, and at such other times (either more
frequently or less frequently) as Agent may request. All calculations of
Availability in any Borrowing Base Certificate shall originally be made by
Borrowers and certified by a Senior Officer, provided that Agent may from time
to time review and adjust any such calculation (a) to reflect its reasonable
estimate of declines in value of any Collateral, due to collections received
in
the Dominion Account or otherwise; (b) to adjust advance rates to reflect
changes in dilution, quality, mix and other factors affecting Collateral; and
(c) to the extent the calculation is not made in accordance with this Agreement
or does not accurately reflect the Availability Reserve.
8.2 Administration
of Accounts.
8.2.1
Records
and Schedules of Accounts.
Each
Borrower shall keep accurate and complete records of its Accounts, including
all
payments and collections thereon, and shall submit to Agent a monthly sales
and
collections report, by the 20th
day of
the following month, in form satisfactory to Agent. Each Borrower shall also
provide to Agent, on or before the 20th
day of
each month, a detailed aged trial balance of all Accounts (separately listing
Bonded Accounts) as of the end of the preceding month, specifying each Account’s
Account Debtor name and address, amount, invoice date and due date, showing
any
discount, allowance, credit, authorized return or dispute, and including such
proof of delivery, copies of invoices and invoice registers, copies of related
documents, repayment histories, status reports and other information as Agent
may reasonably request. If Accounts in an aggregate face amount of $500,000
or
more cease to be Eligible Accounts, Borrowers shall notify Agent of such
occurrence promptly (and in any event within one Business Day) after any
Borrower has knowledge thereof.
49
8.2.2
Taxes.
If an
Account of any Borrower includes a charge for any Taxes, Agent is authorized,
in
its discretion, to pay the amount thereof to the proper taxing authority for
the
account of such Borrower and to charge Borrowers therefor; provided,
however,
that
neither Agent nor Lenders shall be liable for any Taxes that may be due from
Borrowers or with respect to any Collateral.
8.2.3
Account
Verification.
Whether
or not a Default or Event of Default exists, Agent shall have the right at
any
time, in the name of Agent, any designee of Agent or any Borrower to verify
the
validity, amount or any other matter relating to any Accounts of Borrowers
by
mail, telephone or otherwise. Borrowers shall cooperate fully with Agent in
an
effort to facilitate and promptly conclude any such verification
process.
8.2.4
Maintenance
of Dominion Account.
Borrowers shall maintain Dominion Accounts pursuant to lockbox or other
arrangements acceptable to Agent. Borrowers shall obtain an agreement (in form
and substance satisfactory to Agent) from each lockbox servicer and Dominion
Account bank, establishing Agent’s control over and Lien in the lockbox or
Dominion Account, requiring immediate deposit of all remittances received in
the
lockbox to a Dominion Account and, if such Dominion Account is not maintained
with Bank of America, requiring immediate transfer of all funds in the Dominion
Account to a Dominion Account maintained with Bank of America, and waiving
offset rights of such servicer or bank against any funds in the lockbox or
Dominion Account, except offset rights for customary administrative charges.
Neither Agent nor Lenders assume any responsibility to Borrowers for any lockbox
arrangement or Dominion Account, including any claim of accord and satisfaction
or release with respect to any Payment Items accepted by any bank.
8.2.5
Proceeds
of Collateral.
Borrowers shall request in writing and otherwise take all reasonable steps
to
ensure that all payments on Accounts or otherwise relating to Collateral are
made directly to a Dominion Account (or a lockbox relating to a Dominion
Account). If any Borrower or Subsidiary receives cash or Payment Items with
respect to any Collateral, it shall hold same in trust for Agent and promptly
(not later than the next Business Day) deposit same into a Dominion
Account.
8.3 Administration
of Inventory.
8.3.1
Records
and Reports of Inventory.
Each
Borrower shall keep accurate and complete records of its Inventory, including
costs and daily withdrawals and additions, and shall submit to Agent inventory
reports in form satisfactory to Agent, on a monthly basis by no later than
the
20th day of the following month. Until a perpetual inventory reporting system
satisfactory to Agent has been established by each Borrower, each Borrower
shall
conduct a physical inventory count at least once per calendar quarter (and
on a
more frequent basis if requested by Agent when an Event of Default exists)
and
periodic cycle counts consistent with historical practices, and shall provide
to
Agent a report based on each such inventory and count promptly upon completion
thereof, together with such supporting information as Agent may request. Once
a
perpetual inventory reporting system has been established by each Borrower,
such
physical inventory shall be conducted at least once per year Agent may
participate in and observe each inventory or physical count.
50
8.3.2
Returns
of Inventory.
No
Borrower shall return any Inventory to a supplier, vendor or other Person,
whether for cash, credit or otherwise, unless (a) such return is in the Ordinary
Course of Business; (b) no Default, Event of Default or Overadvance exists
or
would result therefrom; (c) Agent is promptly notified if the aggregate Value
of
all Inventory returned in any month exceeds $100,000; and (d) any payment
received by a Borrower for a return is promptly remitted to Agent for
application to the Obligations.
8.3.3
Acquisition,
Sale and Maintenance.
No
Borrower shall acquire or accept any Inventory on consignment or approval,
and
shall take all steps to assure that all Inventory is produced in accordance
with
Applicable Law, including the FLSA. No Borrower shall sell any Inventory on
consignment or approval or any other basis under which the customer may return
or require a Borrower to repurchase such Inventory. Borrowers shall use, store
and maintain all Inventory with reasonable care and caution, in accordance
with
applicable standards of any insurance and in conformity with all Applicable
Law,
and shall make current rent payments (within applicable grace periods provided
for in leases) at all locations where any Collateral is located.
8.4 Administration
of Equipment.
8.4.1
Records
and Schedules of Equipment.
Each
Borrower shall keep accurate and complete records of its Equipment, including
kind, quality, quantity, cost, acquisitions and dispositions thereof, and shall
submit to Agent, on such periodic basis as Agent may request, a current schedule
thereof, in form satisfactory to Agent. Promptly upon request, Borrowers shall
deliver to Agent evidence of their ownership or interests in any
Equipment.
8.4.2
Dispositions
of Equipment.
No
Borrower shall sell, lease or otherwise dispose of any Equipment, without the
prior written consent of Agent, other than (a) a Permitted Asset Disposition;
and (b) replacement of Equipment that is worn, damaged or obsolete with
Equipment of like function and value, if the replacement Equipment is acquired
substantially contemporaneously with such disposition and is free of
Liens.
8.4.3
Condition
of Equipment.
The
Equipment is in good operating condition and repair, and all necessary
replacements and repairs have been made so that the value and operating
efficiency of the Equipment is preserved at all times, reasonable wear and
tear
excepted. Each Borrower shall ensure that the Equipment is mechanically and
structurally sound, and capable of performing the functions for which it was
designed, in accordance with the manufacturer’s published and recommended
specifications. No Borrower shall permit any Equipment to become affixed to
real
Property unless any landlord or mortgagee delivers a Lien Waiver or similar
instrument.
51
8.5 Administration
of Deposit Accounts.
Schedule 8.5
sets
forth all Deposit Accounts maintained by Borrowers, including all Dominion
Accounts. Each Borrower shall take all actions necessary to establish Agent’s
control of each such Deposit Account (other than an account exclusively used
for
payroll, payroll taxes or employee benefits, or an account containing not more
that $10,000 at any time). Each Borrower shall be the sole account holder of
each Deposit Account and shall not allow any other Person (other than Agent)
to
have control over a Deposit Account or any Property deposited therein. Each
Borrower shall promptly notify Agent of any opening or closing of a Deposit
Account and, with the consent of Agent, will amend Schedule
8.5
to
reflect same.
8.6 General
Provisions.
8.6.1
Location
of Collateral.
All
tangible items of Collateral, other than Inventory in transit, shall at all
times be kept by Borrowers at the business locations set forth in Schedule 8.6.1,
except
that Borrowers may (a) make sales or other dispositions of Collateral in
accordance with Section 10.2.6;
and (b)
move Collateral to another location in the United States, upon 30 Business
Days
prior written notice to Agent.
8.6.2
Insurance
of Collateral; Condemnation Proceeds.
(a) Each
Borrower shall maintain insurance with respect to the Collateral, covering
casualty, hazard, public liability, theft, malicious mischief, and such other
risks, in such amounts, with such endorsements, and with such insurers (rated
A+
or better by A.M. Best Rating Guide) as are satisfactory to Agent. All proceeds
under each policy shall be payable to Agent. From time to time upon request,
Borrowers shall deliver to Agent the originals or certified copies of its
insurance policies and updated flood plain searches. Unless Agent shall agree
otherwise, each policy shall include satisfactory endorsements (i) showing
Agent
as sole loss payee or additional insured, as appropriate; (ii) requiring 30
days
prior written notice to Agent in the event of cancellation of the policy for
any
reason whatsoever; and (iii) specifying that the interest of Agent shall not
be
impaired or invalidated by any act or neglect of any Borrower or the owner
of
the Property, nor by the occupation of the premises for purposes more hazardous
than are permitted by the policy. If any Borrower fails to provide and pay
for
such insurance, Agent may, at its option, but shall not be required to, procure
the insurance and charge Borrowers therefor. Each Borrower agrees to deliver
to
Agent, promptly as rendered, copies of all reports made to insurance companies.
While no Event of Default exists, Borrowers may settle, adjust or compromise
any
insurance claim, as long as the proceeds are delivered to Agent. If an Event
of
Default exists, only Agent shall be authorized to settle, adjust and compromise
such claims.
(b) Subject
to subsection (b) below, Any proceeds of insurance (other than proceeds from
workers’ compensation or D&O insurance) and any awards arising from
condemnation of any Collateral shall be paid to Agent. Any such proceeds or
awards shall first be applied to payment of the Revolver Loans, and then to
any
other Obligations outstanding, and if there are no outstanding Obligations,
then
to Borrower Agent.
52
(c) If
requested by Borrowers in writing within 15 days after Agent’s receipt of any
insurance proceeds or condemnation awards relating to any loss or destruction
of
Equipment or Real Estate, Borrowers may use such proceeds or awards to repair
or
replace such Equipment or Real Estate (and until so used, the proceeds shall
be
held by Agent as Cash Collateral) as long as (i) no Default or Event of Default
exists; (ii) such repair or replacement is promptly undertaken and concluded,
in
accordance with plans satisfactory to Agent; (iii) replacement buildings are
constructed on the sites of the original casualties and are of comparable size,
quality and utility to the destroyed buildings; (iv) the repaired or replaced
Property is free of Liens, other than Permitted Liens that are not Purchase
Money Liens; (v) Borrowers comply with disbursement procedures for such repair
or replacement as Agent may reasonably require; and (vi) the aggregate amount
of
such proceeds or awards from any single casualty or condemnation does not exceed
$1,000,000.
8.6.3
Protection
of Collateral.
All
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping any Collateral, all Taxes payable with respect to any Collateral
(including any sale thereof), and all other payments required to be made by
Agent to any Person to realize upon any Collateral, shall be borne and paid
by
Borrowers. Agent shall not be liable or responsible in any way for the
safekeeping of any Collateral, for any loss or damage thereto (except for
reasonable care in its custody while Collateral is in Agent’s actual
possession), for any diminution in the value thereof, or for any act or default
of any warehouseman, carrier, forwarding agency or other Person whatsoever,
but
the same shall be at Borrowers’ sole risk.
8.6.4
Defense
of Title to Collateral.
Each
Borrower shall at all times defend its title to Collateral and Agent’s Liens
therein against all Persons, claims and demands whatsoever, except Permitted
Liens.
8.7 Power
of Attorney.
Each
Borrower hereby irrevocably constitutes and appoints Agent (and all Persons
designated by Agent) as such Borrower’s true and lawful attorney (and
agent-in-fact) for the purposes provided in this Section. Agent, or Agent’s
designee, may, without notice and in either its or a Borrower’s name, but at the
cost and expense of Borrowers:
(a) Endorse
a
Borrower’s name on any Payment Item or other proceeds of Collateral (including
proceeds of insurance) that come into Agent’s possession or control;
and
(b) During
an
Event of Default, (i) notify any Account Debtors of the assignment of their
Accounts, demand and enforce payment of Accounts, by legal proceedings or
otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release any
Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral
upon such terms, for such amounts and at such times as Agent deems advisable;
(iv) take control, in any manner, of any proceeds of Collateral; (v) prepare,
file and sign a Borrower’s name to a proof of claim or other document in a
bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction
of
Lien or similar document; (vi) receive, open and dispose of mail addressed
to a
Borrower, and notify postal authorities to change the address for delivery
thereof to such address as Agent may designate; (vii) endorse any Chattel Paper,
Document, Instrument, invoice, freight xxxx, xxxx of lading, or similar document
or agreement relating to any Accounts, Inventory or other Collateral; (viii)
use
a Borrower’s stationery and sign its name to verifications of Accounts and
notices to Account Debtors; (ix) use the information recorded on or contained
in
any data processing equipment and computer hardware and software relating to
any
Collateral; (x) make and adjust claims under policies of insurance; (xi) take
any action as may be necessary or appropriate to obtain payment under any letter
of credit or banker’s acceptance for which a Borrower is a beneficiary; and
(xii) take all other actions as Agent deems appropriate to fulfill any
Borrower’s obligations under the Loan Documents.
53
SECTION
9.
REPRESENTATIONS AND WARRANTIES
9.1 General
Representations and Warranties.
To
induce Agent and Lenders to enter into this Agreement and to make available
the
Commitments, Loans and Letters of Credit, each Borrower represents and warrants
that:
9.1.1
Organization
and Qualification.
Each
Borrower is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its organization. Each Borrower is duly qualified,
authorized to do business and in good standing as a foreign corporation in
each
jurisdiction where failure to be so qualified could reasonably be expected
to
have a Material Adverse Effect.
9.1.2
Power
and Authority.
Each
Obligor is duly authorized to execute, deliver and perform its Loan Documents.
The execution, delivery and performance of the Loan Documents have been duly
authorized by all necessary action, and do not (a) require any consent or
approval of any holders of Equity Interests of any Obligor, other than those
already obtained; (b) contravene the Organic Documents of any Obligor; (c)
violate or cause a default under any Applicable Law or Material Contract; or
(d)
result in or require the imposition of any Lien (other than Permitted Liens)
on
any Property of any Obligor.
9.1.3
Enforceability.
Each
Loan Document is a legal, valid and binding obligation of each Obligor party
thereto, enforceable in accordance with its terms, except as enforceability
may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally.
9.1.4
Capital
Structure.
Schedule 9.1.4
shows,
for each Borrower and Subsidiary, its name, its jurisdiction of organization,
its authorized and issued Equity Interests, the holders of its Equity Interests,
and all agreements binding on such holders with respect to their Equity
Interests. Each Borrower has good title to its Equity Interests in its
Subsidiaries, subject only to Agent’s Lien, and all such Equity Interests are
duly issued, fully paid and non-assessable. Except as shown on Schedule
9.1.4,
there
are no outstanding options to purchase, warrants, subscription rights,
agreements to issue or sell, convertible interests, phantom rights or powers
of
attorney relating to any Equity Interests of any Borrower or Subsidiary. Each
of
the Borrower Agent’s Subdisiaries in existence as of the date hereof are
inactive and have no assets, operations or income.
54
9.1.5
Corporate
Names; Locations.
During
the five years preceding the Closing Date, except as shown on Schedule 9.1.5,
no
Borrower or Subsidiary has been known as or used any corporate, fictitious
or
trade names, has been the surviving corporation of a merger or combination,
or
has acquired any substantial part of the assets of any Person. The chief
executive offices and other places of business of Borrowers and Subsidiaries
are
shown on Schedule 8.6.1.
During
the five years preceding the Closing Date, no Borrower or Subsidiary has had
any
other office or place of business.
9.1.6
Title
to Properties; Priority of Liens.
Each
Borrower and Subsidiary has good and marketable title to (or valid leasehold
interests in) all of its Real Estate, and good title to all of its personal
Property, including all Property reflected in any financial statements delivered
to Agent or Lenders, in each case free of Liens except Permitted Liens. Except
as set forth in Schedule
9.1.6,
each
Borrower and Subsidiary has paid and discharged all lawful claims that, if
unpaid, could become a Lien on its Properties, other than Permitted Liens.
All
Liens of Agent in the Collateral are duly perfected, first priority Liens,
subject only to Permitted Liens that are expressly allowed to have priority
over
Agent’s Liens.
9.1.7
Accounts.
Agent
may rely, in determining which Accounts are Eligible Accounts, on all statements
and representations made by Borrowers with respect thereto. Borrowers warrant,
with respect to each Account at the time it is shown as an Eligible Account
in a
Borrowing Base Certificate, that:
(a) it
is
genuine and in all respects what it purports to be, and is not evidenced by
a
judgment;
(b) it
arises
out of a completed, bona
fide
sale and
delivery of goods in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating
thereto;
(c) it
is for
a sum certain, maturing as stated in the invoice covering such sale, a copy
of
which has been furnished or is available to Agent on request;
(d) it
is not
subject to any offset, Lien (other than Agent’s Lien), deduction, defense,
dispute, counterclaim or other adverse condition except as arising in the
Ordinary Course of Business and disclosed to Agent; and it is absolutely owing
by the Account Debtor, without contingency in any respect;
(e) no
purchase order, agreement, document or Applicable Law restricts assignment
of
the Account to Agent (regardless of whether, under the UCC, the restriction
is
ineffective);
(f) no
extension, compromise, settlement, modification, credit, deduction or return
has
been authorized with respect to the Account, except discounts or allowances
granted in the Ordinary Course of Business for prompt payment that are reflected
on the face of the invoice related thereto and in the reports submitted to
Agent
hereunder; and
55
(g) to
the
best of Borrowers’ knowledge, (i) there are no facts or circumstances that are
reasonably likely to impair the enforceability or collectibility of such
Account; (ii) the Account Debtor had the capacity to contract when the Account
arose, continues to meet the applicable Borrower’s customary credit standards,
is Solvent, is not contemplating or subject to an Insolvency Proceeding, and
has
not failed, or suspended or ceased doing business; and (iii) there are no
proceedings or actions threatened or pending against any Account Debtor that
could reasonably be expected to have a material adverse effect on the Account
Debtor’s financial condition.
9.1.8
Financial
Statements.
The
consolidated and consolidating balance sheets, and related statements of income,
cash flow and shareholder’s equity, of Borrowers and Subsidiaries that have been
and are hereafter delivered to Agent and Lenders, are prepared in accordance
with GAAP, and fairly present the financial positions and results of operations
of Borrowers and Subsidiaries at the dates and for the periods indicated
subject, in the case of interim statements, to customary year-end adjustments.
All projections delivered from time to time to Agent and Lenders have been
prepared in good faith, based on reasonable assumptions in light of the
circumstances at such time. Except for the losses as of December 31, 2005
disclosed by Borrower Agent in Schedule
9.1.8 since
September 30, 2005, there has been no change in the condition, financial or
otherwise, of any Borrower or Subsidiary that could reasonably be expected
to
have a Material Adverse Effect. No financial statement delivered to Agent or
Lenders at any time contains any untrue statement of a material fact, nor fails
to disclose any material fact necessary to make such statement not materially
misleading. Each Borrower is Solvent. There has been no material adverse change
in the Fixed Charge Coverage Ratio of Borrowers for the month of February 2006
as set forth in the projections delivered to Agent prior to the Closing
Date.
9.1.9
Surety
Obligations.
No
Borrower or Subsidiary is obligated as surety or indemnitor under any bond
or
other contract that assures payment or performance of any obligation of any
Person, except as permitted hereunder.
9.1.10
Taxes.
Except
as disclosed in Schedule
9.1.10,
each
Borrower and Subsidiary has filed all federal, state and local tax returns
and
other reports that it is required by law to file, and has paid, or made
provision for the payment of, all Taxes upon it, its income and its Properties
that are due and payable, except to the extent being Properly Contested. The
provision for Taxes on the books of each Borrower and Subsidiary is adequate
for
all years not closed by applicable statutes, and for its current Fiscal
Year.
9.1.11
Brokers.
There
are no brokerage commissions, finder’s fees or investment banking fees payable
in connection with any transactions contemplated by the Loan
Documents.
9.1.12
Intellectual
Property.
Each
Borrower and Subsidiary owns or has the lawful right to use all Intellectual
Property necessary for the conduct of its business, without conflict with any
rights of others. There is no pending or, to any Borrower’s knowledge,
threatened Intellectual Property Claim with respect to any Borrower, any
Subsidiary or any of their Property (including any Intellectual Property).
Except as disclosed on Schedule 9.1.12,
no
Borrower or Subsidiary pays or owes any Royalty or other compensation to any
Person with respect to any Intellectual Property. All Intellectual Property
owned, used or licensed by, or otherwise subject to any interests of, any
Borrower or Subsidiary is shown on Schedule 9.1.12.
56
9.1.13
Governmental
Approvals.
Each
Borrower and Subsidiary has, is in compliance with, and is in good standing
with
respect to, all Governmental Approvals necessary to conduct its business and
to
own, lease and operate its Properties, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. All necessary import,
export or other licenses, permits or certificates for the import or handling
of
any goods or other Collateral have been procured and are in effect, and
Borrowers and Subsidiaries have complied with all foreign and domestic laws
with
respect to the shipment and importation of any goods or Collateral, except
where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
9.1.14
Compliance
with Laws.
Each
Borrower and Subsidiary has duly complied, and its Properties and business
operations are in compliance, in all material respects with all Applicable
Law,
except where noncompliance could not reasonably be expected to have a Material
Adverse Effect. There have been no citations, notices or orders of material
noncompliance issued to any Borrower or Subsidiary under any Applicable Law.
No
Inventory has been produced in violation of the FLSA.
9.1.15
Compliance
with Environmental Laws.
Except
as disclosed on Schedule
9.1.15,
no
Borrower’s or Subsidiary’s past or present operations, Real Estate or other
Properties are subject to any federal, state or local investigation to determine
whether any remedial action is needed to address any known environmental
pollution, hazardous material or environmental clean-up. Except as disclosed
on
Schedule
9.1.15,
no
Borrower or Subsidiary has received any Environmental Notice. No Borrower or
Subsidiary has any contingent liability with respect to any Environmental
Release, environmental pollution or hazardous material on any Real Estate now
or
previously owned, leased or operated by it. The representations and warranties
contained in the Environmental Agreement are true and correct on the Closing
Date.
9.1.16
Burdensome
Contracts.
No
Borrower or Subsidiary is a party or subject to any contract, agreement or
charter restriction that could reasonably be expected to have a Material Adverse
Effect. No Borrower or Subsidiary is party or subject to any Restrictive
Agreement, except as shown on Schedule 9.1.16,
none of
which prohibit the execution or delivery of any Loan Documents by an Obligor
nor
the performance by an Obligor of any obligations thereunder.
9.1.17
Litigation.
Except
as shown on Schedule 9.1.17,
there
are no proceedings or investigations pending or, to any Borrower’s knowledge,
threatened against any Borrower or Subsidiary, or any of their businesses,
operations, Properties, prospects or conditions, that (a) relate to any Loan
Documents or transactions contemplated thereby; or (b) could reasonably be
expected to have a Material Adverse Effect if determined adversely to any
Borrower or Subsidiary. No Borrower or Subsidiary is in default with respect
to
any order, injunction or judgment of any Governmental Authority.
57
9.1.18
No
Defaults.
No
event or circumstance has occurred or exists that constitutes a Default or
Event
of Default. No Borrower or Subsidiary is in default, and no event or
circumstance has occurred or exists that with the passage of time or giving
of
notice would constitute a default, under any Material Contract or in the payment
of any Borrowed Money. There is no basis upon which any party (other than a
Borrower or Subsidiary) could terminate a Material Contract for cause prior
to
its scheduled termination date.
9.1.19
ERISA.
Except
as disclosed on Schedule 9.1.19,
no
Borrower or Subsidiary has any Multiemployer Plan or Foreign Plan. Each Borrower
and Subsidiary is in full compliance with the requirements of all Applicable
Law, including ERISA, relating to each Multiemployer Plan and Foreign Plan.
No
fact or situation exists that could reasonably be expected to result in a
Material Adverse Effect in connection with any Multiemployer Plan or Foreign
Plan. No Borrower or Subsidiary has any withdrawal liability in connection
with
a Multiemployer Plan or Foreign Plan. All employer and employee contributions
to
Foreign Plans, to the extent required by law or the terms of such plans, have
been made or accrued in accordance with normal accounting principles. The fair
market value of the assets of each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through insurance and/or the book reserve
established for each Foreign Plan, together with any accrued contributions,
are
sufficient to provide the accrued benefit obligations of all participants in
such plans according to the actuarial assumptions and valuations most recently
used to account for such obligations in accordance with applicable generally
accepted accounting principles. Each Foreign Plan required to be registered
has
been registered and is maintained in good standing with all applicable
regulatory authorities.
9.1.20
Trade
Relations.
There
exists no actual or threatened termination, limitation or modification of any
business relationship between any Borrower or Subsidiary and any customer or
supplier, or any group of customers or suppliers, who individually or in the
aggregate are material to the business of such Borrower or Subsidiary. There
exists no condition or circumstance that could reasonably be expected to impair
the ability of any Borrower or Subsidiary to conduct its business at any time
hereafter in substantially the same manner as conducted on the Closing
Date.
9.1.21
Labor
Relations.
Except
as described on Schedule 9.1.21,
no
Borrower or Subsidiary is party to or bound by any collective bargaining
agreement, management agreement or consulting agreement. There are no material
grievances, disputes or controversies with any union or other organization
of
any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge, any
asserted or threatened strikes, work stoppages or demands for collective
bargaining.
9.1.22
Payable
Practices.
No
Borrower or Subsidiary has made any material change in its historical accounts
payable practices from those in effect on the Closing Date.
58
9.1.23
Not
a
Regulated Entity.
No
Obligor is (a) an “investment company” or a “person directly or indirectly
controlled by or acting on behalf of an investment company” within the meaning
of the Investment Company Act of 1940; (b) a “holding company,” a “subsidiary
company” of a “holding company,” or an “affiliate” of either, within the meaning
of the Public Utility Holding Company Act of 1935; or (c) subject to regulation
under the Federal Power Act, the Interstate Commerce Act, any public utilities
code or any other Applicable Law regarding its authority to incur
Debt.
9.1.24
Margin
Stock.
No
Borrower or Subsidiary is engaged, principally or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or
carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used
by
Borrowers to purchase or carry, or to reduce or refinance any Debt incurred
to
purchase or carry, any Margin Stock or for any related purpose governed by
Regulations T, U or X of the Board of Governors.
9.1.25
Plan
Assets.
No
Borrower is an entity deemed to hold “plan assets” within the meaning of 29
C.F.R. Sec.2510.3-101 of any “employee benefit plan” (as defined in Section 3(3)
of ERISA) that is subject to Title I of ERISA or any “plan” (within the meaning
of Section 4975 of the Internal Revenue Code), and neither the execution of
this
Agreement nor the funding of any Loans gives rise to a prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code.
9.1.26
The
Note Transaction.
(i) The
Borrower has delivered to the Agent a complete and correct copy of the Existing
Subordinated Debt Documents, including all schedules and exhibits thereto,
(ii)
the Existing Subordinated Debt Documents set forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof,
and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby, (iii) no Existing Subordinated Debt
Document has been amended or otherwise modified prior to the date hereof, (iv)
the execution, delivery and performance of each of the Existing Subordinated
Debt Documents has been duly authorized by all necessary action on the part
of
the applicable Borrowers, (v) the Note Transaction has been effected in
accordance with the terms of the Existing Subordinated Debt Documents and all
applicable law, (vi) the Borrowers have not incurred or assumed any liabilities
or obligations pursuant to or in connection with the Note Transaction other
than
the Existing Subordinated Debt Documents, (vii) the execution, delivery and
performance of this Agreement and the other Loan Documents and the funding
of
the Loans or issuance of any Letter of Credit do not violate any term or
provision of any of the Existing Subordinated Debt Documents, and (viii) each
Existing Subordinated Debt Document is the legal, valid and binding obligation
of the parties thereto, enforceable against such parties in accordance with
its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and by general principals of equity.
9.1.27
Existing
Subordinated Debt.
The
Borrower Agent has the power and authority to incur the Debt provided for under
the Existing Subordinated Debt Documents and has duly authorized, executed
and
delivered the Existing Subordinated Debt Documents. The Borrower Agent has
issued, pursuant to due authorization, the Subordinated Convertible Notes under
the Existing Subordinated Debt Documents. The Subordinated Convertible Notes
constitute the legal, valid and binding obligation of the Borrower Agent
enforceable against the Borrower Agent in accordance with their terms. The
subordination provisions of the Intercreditor Agreement and the Subordinated
Convertible Notes are and will be enforceable against the holders of the
Subordinated Convertible Notes by the holders of any Senior Indebtedness (as
defined in the Intercreditor Agreement). All Obligations, including, without
limitation, those to pay principal of and interest (including post-petition
interest) on the Loan, the LC Obligations and fees, indemnities and expenses
in
connection therewith, constitute Senior Indebtedness (as defined in the
Intercreditor Agreement), and all such Obligations are entitled to the benefits
of the subordination and lien priorities created by the Intercreditor Agreement.
The Borrower Agent acknowledges that the Agent and the Lenders are entering
into
this Agreement, and extending their Commitments, in reliance upon the
subordination provisions of the Intercreditor Agreement and this Section
9.1.27.
59
9.2 Complete
Disclosure.
No Loan
Document contains any untrue statement of a material fact, nor fails to disclose
any material fact necessary to make the statements contained therein not
materially misleading. There is no fact or circumstance that any Obligor has
failed to disclose to Agent in writing that could reasonably be expected to
have
a Material Adverse Effect.
SECTION
10.
COVENANTS AND CONTINUING AGREEMENTS
10.1 Affirmative
Covenants.
For so
long as any Commitments or Obligations are outstanding, each Borrower shall,
and
shall cause each Subsidiary to:
10.1.1
Inspections;
Appraisals.
(a) Permit
Agent from time to time, subject (except when a Default or Event of Default
exists) to reasonable notice and normal business hours, to visit and inspect
the
Properties of any Borrower or Subsidiary, inspect, audit and make extracts
from
any Borrower’s or Subsidiary’s books and records, and discuss with its officers,
employees, agents, advisors and independent accountants such Borrower’s or
Subsidiary’s business, financial condition, assets, prospects and results of
operations. Lenders may participate in any such visit or inspection, at their
own expense. Neither Agent nor any Lender shall have any duty to any Borrower
to
make any inspection, nor to share any results of any inspection, appraisal
or
report with any Borrower. To the extent any appraisal or other information
is
shared by Agent or a Lender with any Borrower, such Borrower acknowledges that
it was prepared by Agent and Lenders for their purposes and Borrowers shall
not
be entitled to rely upon it.
(b) Reimburse
Agent for all reasonable charges, costs and expenses of Agent in connection
with
(i) examinations of any Obligor’s books and records or any other financial or
Collateral matters as Agent deems appropriate, up to four times per Loan Year;
and (ii) appraisals of Inventory, Equipment and Real Estate, up to one time
per Loan Year; provided,
however,
that if
an examination or appraisal is initiated during a Default or Event of Default,
all such charges, costs and expenses therefor shall be reimbursed by Borrowers
without regard to such limits. Subject to the foregoing, Borrowers shall pay
Agent’s then standard charges for each day that an employee of Agent or its
Affiliates is engaged in any examination activities (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, but is subject to change
without notice by Agent), and shall pay the standard charges of Agent’s internal
appraisal group. This Section shall not be construed to limit Agent’s right to
conduct examinations or to obtain appraisals at any time in its discretion,
nor
to use third parties for such purposes.
60
10.1.2
Financial
and Other Information.
Keep
adequate records and books of account with respect to its business activities,
in which proper entries are made in accordance with GAAP reflecting all
financial transactions; and furnish to Agent and Lenders:
(a) as
soon
as available, and in any event within 90 days after the close of each Fiscal
Year, balance sheets as of the end of such Fiscal Year and the related
statements of income, cash flow and shareholders’ equity for such Fiscal Year,
on consolidated and consolidating bases for Borrowers and Subsidiaries, which
consolidated statements shall be audited and certified (without qualification
as
to scope, “going concern” or similar items) by a firm of independent certified
public accountants of recognized standing selected by Borrowers and acceptable
to Agent (Borrower’s current accountants are deemed acceptable by Agent as of
the Closing Date), and shall set forth in comparative form corresponding figures
for the preceding Fiscal Year and other information acceptable to
Agent;
(b) as
soon
as available, and in any event within 30 days after the end of each month (and
by no later than February 28 of each year with respect to the financial
statements for the month of January of such year), unaudited balance sheets
as
of the end of such month and the related statements of income and cash flow
for
such month and for the portion of the Fiscal Year then elapsed, on consolidated
and consolidating bases for Borrowers and Subsidiaries, setting forth in
comparative form corresponding figures for the preceding Fiscal Year and
certified by the chief financial officer of Borrower Agent as prepared in
accordance with GAAP and fairly presenting the financial position and results
of
operations for such month and period, subject to normal year-end adjustments
and
the absence of footnotes, all acceptable to Agent;
(c) as
soon a
available, and in any event within 45 days after the end of each quarter, a
copy
of 10-Q quarterly report of the Borrowing Agent as filed with the Securities
and
Exchange Commission;
(d) concurrently
with delivery of financial statements under clauses (a) and (b) above, or more
frequently if requested by Agent while a Default or Event of Default exists,
a
Compliance Certificate executed by the chief financial officer of Borrower
Agent
and acceptable to Agent;
(e) concurrently
with delivery of financial statements under clause (a) above, copies of all
management letters and other material reports submitted to Borrowers by their
accountants in connection with such financial statements, all acceptable to
Agent;
(f) not
later
than 30 days prior to the end of each Fiscal Year, projections of Borrowers’
consolidated balance sheets, results of operations, cash flow and Availability
for the next two Fiscal Years, month by month for the first Fiscal Year, all
acceptable to Agent;
61
(g) at
Agent’s request, a listing of each Borrower’s trade payables, specifying the
trade creditor and balance due, and a detailed trade payable aging, all in
form
satisfactory to Agent;
(h) promptly
after the sending or filing thereof, copies of any proxy statements, financial
statements or reports that any Borrower has made generally available to its
shareholders; copies of any regular, periodic and special reports or
registration statements or prospectuses that any Borrower files with the
Securities and Exchange Commission or any other Governmental Authority, or
any
securities exchange; and copies of any press releases or other statements made
available by a Borrower to the public concerning material changes to or
developments in the business of such Borrower;
(i) promptly
after the sending or filing thereof, copies of any annual report to be filed
in
connection with each Plan or Foreign Plan;
(j) such
other reports and information (financial or otherwise) as Agent may reasonably
request from time to time in connection with any Collateral or any Borrower’s,
Subsidiary’s or other Obligor’s financial condition or business;
(k) as
soon
as available, and in any event within 120 days after the close of each Fiscal
Year, financial statements for each Guarantor, if any, in form and substance
satisfactory to Agent; and
(l) together
with the monthly financial statements delivered as set forth in Section
10.1.2(b),
all
material stop notices and release of stop notices, explanations of short paids,
list of cost overruns by job, report of production of goods scheduled as
compared to actual production, and all notices of any claims for liquidated
damages.
Simultaneously
with retaining accountants for their annual audit, Borrowers shall send a letter
to the accountants, with a copy to Agent and Lenders, notifying the accountants
that one of the primary purposes for retaining their services and obtaining
audited financial statements is for use by Agent and Lenders. Agent is
authorized to send such notice if Borrowers fail to do so for any
reason.
10.1.3
Notices.
Notify
Agent and Lenders in writing, promptly after a Borrower’s obtaining knowledge
thereof, of any of the following that affects an Obligor: (a) the threat or
commencement of any proceeding or investigation, whether or not covered by
insurance, if an adverse determination could have a Material Adverse Effect;
(b)
any pending or threatened labor dispute, strike or walkout, or the expiration
of
any material labor contract; (c) any default under or termination of a Material
Contract; (d) the existence of any Default or Event of Default; (e) any judgment
in an amount exceeding $1,000,000; (f) the assertion of any Intellectual
Property Claim, if an adverse resolution could have a Material Adverse Effect;
(g) any violation or asserted violation of any Applicable Law (including ERISA,
OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have
a
Material Adverse Effect; (h) any Environmental Release by an Obligor or on
any
Property owned, leased or occupied by an Obligor; or receipt of any
Environmental Notice; (i) the discharge of or any withdrawal or resignation
by
Borrowers’ independent accountants; or (j) any opening of a new office or place
of business, at least 30 days prior to such opening.
62
10.1.4
Landlord
and Storage Agreements.
Upon
request, provide Agent with copies of all existing agreements, and promptly
after execution thereof provide Agent with copies of all future agreements,
between an Obligor and any landlord, warehouseman, processor, shipper, bailee
or
other Person that owns any premises at which any Collateral may be kept or
that
otherwise may possess or handle any Collateral.
10.1.5
Compliance
with Laws.
Comply
with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA,
Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and
maintain all Governmental Approvals necessary to the ownership of its Properties
or conduct of its business, unless failure to comply (other than failure to
comply with Anti-Terrorism Laws) or maintain could not reasonably be expected
to
have a Material Adverse Effect. Without limiting the generality of the
foregoing, if any Environmental Release occurs at or on any Properties of any
Borrower or Subsidiary, it shall act promptly and diligently to investigate
and
report to Agent and all appropriate Governmental Authorities the extent of,
and
to make appropriate remedial action to eliminate, such Environmental Release,
whether or not directed to do so by any Governmental Authority.
10.1.6
Taxes.
Pay and
discharge all Taxes prior to the date on which they become delinquent or
penalties attach, unless such Taxes are being Properly Contested.
10.1.7
Insurance.
In
addition to the insurance required hereunder with respect to Collateral,
maintain insurance with insurers (rated A+ or better by Best Rating Guide)
satisfactory to Agent, (a) with respect to the Properties and business of
Borrowers and Subsidiaries of such type (including product liability, workers’
compensation, larceny, embezzlement, or other criminal misappropriation
insurance), in such amounts, and with such coverages and deductibles as are
customary for companies similarly situated, and (b) business interruption
insurance in an amount not less than $10,000,000, with deductibles and subject
to an Insurance Assignment satisfactory to Agent.
10.1.8
Licenses.
Keep
each License affecting any Collateral (including the manufacture, distribution
or disposition of Inventory) or any other material Property of Borrowers and
Subsidiaries in full force and effect; promptly notify Agent of any proposed
modification to any such License, or entry into any new License, in each case
at
least 30 days prior to its effective date; pay all Royalties when due; and
notify Agent of any default or breach asserted by any Person to have occurred
under any License.
10.1.9
Future
Subsidiaries.
Promptly notify Agent upon any Person becoming a Subsidiary and, if such Person
is not a Foreign Subsidiary, cause it to guaranty the Obligations in a manner
satisfactory to Agent, and to execute and deliver such documents, instruments
and agreements and to take such other actions as Agent shall require to evidence
and perfect a Lien in favor of Agent (for the benefit of Secured Parties) on
all
assets of such Person, including delivery of such legal opinions, in form and
substance satisfactory to Agent, as it shall deem appropriate.
63
10.2 Negative
Covenants.
For so
long as any Commitments or Obligations are outstanding, each Borrower shall
not,
and shall cause each Subsidiary not to:
10.2.1
Permitted
Debt.
Create,
incur, guarantee or suffer to exist any Debt, except:
(a) the
Obligations;
(b) The
Subordinated Convertible Notes in the aggregate outstanding principal amount
of
$25,900,000 as of the Closing Date, as shall be reduced by principal repayments
thereon from time to time;
(c) Permitted
Purchase Money Debt;
(d) Borrowed
Money (other than the Obligations, the Existing Subordinated Debt and Permitted
Purchase Money Debt), but only to the extent outstanding on the Closing Date
and
not satisfied with proceeds of the initial Loans;
(e) Bank
Product Debt;
(f) Permitted
Contingent Obligations;
(g) Refinancing
Debt as long as each Refinancing Condition is satisfied; and
(h) Debt
that
is not included in any of the preceding clauses of this Section, is not secured
by a Lien and does not exceed $500,000 in the aggregate at any
time.
10.2.2
Permitted
Liens.
Create
or suffer to exist any Lien upon any of its Property, except the following
(collectively, “Permitted
Liens”):
(a) Liens
in
favor of Agent;
(b) Purchase
Money Liens securing Permitted Purchase Money Debt;
(c) Liens
for
Taxes not yet due or being Properly Contested;
(d) statutory
Liens (other than Liens for Taxes or imposed under ERISA) arising in the
Ordinary Course of Business, but only if (i) payment of the obligations secured
thereby is not yet due or is being Properly Contested, and (ii) such Liens
do
not materially impair the value or use of the Property or materially impair
operation of the business of any Borrower or Subsidiary;
(e) Liens
incurred or deposits made in the Ordinary Course of Business to secure the
performance of tenders, bids, leases, contracts (except those relating to
Borrowed Money), statutory obligations and other similar obligations, or arising
as a result of progress payments under government contracts, as long as such
Liens are at all times junior to Agent’s Liens;
64
(f) Liens
arising by virtue of a judgment or judicial order against any Borrower or
Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens
are (i) in existence for less than 20 consecutive days or being Properly
Contested, and (ii) at all times junior to Agent’s Liens;
(g) easements,
rights-of-way, restrictions, covenants or other agreements of record, and other
similar charges or encumbrances on Real Estate, that do not secure any monetary
obligation and do not interfere with the Ordinary Course of
Business;
(h) normal
and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course
of
collection;
(i) Liens
arising under the Existing Subordinated Debt Documents to the extent such Liens
are permitted by and subject to the Intercreditor Agreement; and
(j) existing
Liens shown on Schedule
10.2.2.
10.2.3
[Intentionally
Omitted].
10.2.4
Distributions;
Upstream Payments.
Declare
or make any Distributions, except Upstream Payments; or create or suffer to
exist any encumbrance or restriction on the ability of a Subsidiary to make
any
Upstream Payment, except for restrictions under the Loan Documents, under
Applicable Law or in effect on the Closing Date as shown on Schedule 9.1.16.
10.2.5
Restricted
Investments.
Make
any Restricted Investment.
10.2.6
Disposition
of Assets.
Make
any Asset Disposition, except a Permitted Asset Disposition, a disposition
of
Equipment under Section 8.4.2,
or a
transfer of Property by a Subsidiary or Obligor to a Borrower.
10.2.7
Loans.
Make
any loans or other advances of money to any Person, except (a) advances to
an
officer or employee for salary, travel expenses, commissions and similar items
in the Ordinary Course of Business; (b) prepaid expenses and extensions of
trade
credit made in the Ordinary Course of Business; (c) deposits with financial
institutions permitted hereunder; and (d) as long as no Default or Event of
Default exists, intercompany loans by a Borrower to another
Borrower.
10.2.8
Restrictions
on Payment of Certain Debt.
Make
any payments (whether voluntary or mandatory, or a prepayment, redemption,
retirement, defeasance or acquisition) with respect to (a) the Existing
Subordinated Debt, except as set forth in the Intercreditor Agreement or herein
(and a Senior Officer of Borrower Agent shall certify to Agent in writing,
not
less than 5 Business Days prior to the date of payment, that all conditions
under such Intercreditor Agreement or hereunder have been satisfied); or
(b) any Borrowed Money (other than the Obligations) prior to its due date
under the agreements evidencing such Debt as in effect on the Closing Date
(or
as amended thereafter with the consent of Agent).
65
Notwithstanding
the above:
(a) the
Existing Subordinated Debt Lenders may (1) at any time exercise any and all
rights under the Existing Subordinated Debt Documents to convert or redeem
any
of the Existing Subordinated Debt Notes into common equity of the Borrower
Agent, and (2) so long as no Default or Event of Default exists or will exist
as
a result thereof, receive payment of principal and regularly scheduled interest,
in cash, at the final scheduled maturity date of the Existing Subordinated
Debt
Obligations; and
(b) so
long
as no Default or Event of Default exists or will exist as a result thereof
and
immediately before and after giving effect to such payment Availability exceeds
$3,000,000, the Existing Subordinated Debt Lenders shall have the right to
cause
the Borrower Agent to redeem, and the Borrower Agent shall redeem up to the
following principal amount(s) of Existing Subordinated Debt Notes on each of
the
following redemption dates by delivering written notice of the exercise of
such
right to the Borrower Agent no later than the August 8th prior to the redemption
dates: (i) up to $8,330,000 on August 31, 2006 (“First
Redemption Date”),
(ii) up to $9,230,000 on August 31, 2007 (“Second
Redemption Date”),
and
(iii) up to $8,330,000 on September 2, 2008 (“Third
Redemption Date”,
and
together with the First Redemption Date and the Second Redemption Date,
collectively, the “Redemption
Dates”).
(i) If
the
Existing Subordinated Debt Lenders elect to redeem any of the Existing
Subordinated Debt Notes on the applicable Redemption Dates, the Existing
Subordinated Debt Lenders will be required to first use at least $5,000,000
of
cash collateral supporting the Existing Subordinated Debt Letter of Credit
as
repayment proceeds for the First Redemption Date and Second Redemption Date,
respectively, to consummate the redemption; provided,
that
such Existing Subordinated Debt Letter of Credit is automatically reduced by
the
amount of any cash collateral which is released;
(ii) In
the
event the Borrower Agent is required to redeem any portion of the Existing
Subordinated Debt Notes on one of the applicable Redemption Dates, which
redemption, under the terms of the Existing Subordinated Debt Documents,
(i) triggers the release of cash collateral for the Existing Subordinated
Debt Letter of Credit and (ii) thereby reduces the Existing Subordinated
Debt Letter of Credit by a corresponding amount of such released cash
collateral, the Existing Subordinated Debt Lenders shall be permitted a right
of
redemption for an amount up to the additional $3,330,000 then called for
redemption on the applicable Redemption Date, so long as (A) no greater
than (1) $3,330,000 of redemption proceeds, on the First Redemption Date, and
(2) $4,230,000 of redemption proceeds, on the Second Redemption Date, are
derived from Borrowings hereunder, (B) the Borrower Agent has met the
conditions referenced in Section
10.2.8(b)(iii)
below,
(C) with respect to the applicable Redemption Date, the Existing
Subordinated Debt Lenders have used at least $5,000,000 of cash collateral
securing the Existing Subordinated Debt Letter of Credit towards redemption
of
the Existing Subordinated Debt Notes on such specific Redemption Date (with
the
corresponding reduction to the Existing Subordinated Debt Letter of Credit),
and
(D) no Default or Event of Default then exists, or would result from such
payment;
66
(iii) The
redemption conditions referenced above shall be: (i) with respect to the
First Redemption Date, the Borrower Agent meeting one hundred percent (100%)
of
its budgeted EBITDA as disclosed to the Agent on the date hereof for
the
trailing six-month period ending on June 30, 2006, as evidenced by the delivery
of financial statements in compliance with Section
10.1.2
together
with a certificate signed by the chief financial officer of the Borrower Agent
certifying as to such evidence, and (ii) with respect to the Second
Redemption Date, the Borrower Agent meeting the requirements set out in clause
(i) above and meeting at least ninety percent (90%) of its budgeted EBITDA
as
disclosed to the Agent on the date hereof for
the
trailing twelve-month period ending on June 30, 2007, as evidenced by the
delivery of financial statements in compliance with Section
10.1.2
together
with a certificate signed by the chief financial officer of the Borrower Agent
certifying as to such evidence.
10.2.9
Fundamental
Changes.
Merge,
combine or consolidate with any Person, or liquidate, wind up its affairs or
dissolve itself, in each case whether in a single transaction or in a series
of
related transactions, except for mergers or consolidations of a wholly-owned
Subsidiary with another wholly-owned Subsidiary or into a Borrower; change
its
name or conduct business under any fictitious name; change its tax, charter
or
other organizational identification number; or change its form or state of
organization. Nothing in this Section
10.2.9
shall
limit Borrowers’ ability to issue common capital stock upon conversion of the
Subordinated Convertible Notes in accordance with its terms of the Intercreditor
Agreement or exercise of the warrants issued in connection with the Subordinated
Convertible Notes.
10.2.10
Subsidiaries.
Form
or
acquire any Subsidiary after the Closing Date, except in accordance with
Sections 10.1.9
and
10.2.5;
or
permit any existing Subsidiary to issue any additional Equity Interests except
director’s qualifying shares.
10.2.11
Organic
Documents.
Amend,
modify or otherwise change any of its Organic Documents as in effect on the
Closing Date.
10.2.12
Tax
Consolidation.
File or
consent to the filing of any consolidated income tax return with any Person
other than Borrowers and Subsidiaries.
10.2.13
Accounting
Changes.
Make
any material change in accounting treatment or reporting practices, except
as
required by GAAP and in accordance with Section 1.2;
or
change its Fiscal Year.
10.2.14
Restrictive
Agreements.
Become
a party to any Restrictive Agreement, except (a) a Restrictive Agreement as
in
effect on the Closing Date and shown on Schedule 9.1.16;
(b) a
Restrictive Agreement relating to secured Debt permitted hereunder, if such
restrictions apply only to the collateral for such Debt; and (c) customary
provisions in leases and other contracts restricting assignment
thereof.
67
10.2.15
Hedging
Agreements.
Enter
into any Hedging Agreement, except to hedge risks arising in the Ordinary Course
of Business and not for speculative purposes.
10.2.16
Conduct
of Business.
Engage
in any business, other than its business as conducted on the Closing Date and
any activities incidental thereto.
10.2.17
Affiliate
Transactions.
Enter
into or be party to any transaction with an Affiliate, except (a) transactions
contemplated by the Loan Documents; (b) payment of reasonable compensation
to
officers and employees for services actually rendered, and loans and advances
permitted by Section 10.2.7;
(c)
payment of customary directors’ fees and indemnities; (d) transactions solely
among Borrowers; (e) transactions with Affiliates that were consummated prior
to
the Closing Date, as shown on Schedule 10.2.17;
and (f)
transactions with Affiliates in the Ordinary Course of Business, upon fair
and
reasonable terms fully disclosed to Agent and no less favorable than would
be
obtained in a comparable arm’s-length transaction with a
non-Affiliate.
10.2.18
Plans.
Become
party to any Multiemployer Plan or Foreign Plan, other than any in existence
on
the Closing Date.
10.2.19
Amendments
to Existing Subordinated Debt.
Amend,
supplement or otherwise modify any document, instrument or agreement relating
to
the Existing Subordinated Debt Documents except as set forth in the
Intercreditor Agreement.
10.3 Financial
Covenants.
For so
long as any Commitments or Obligations are outstanding, Borrowers
shall:
10.3.1
Fixed
Charge Coverage Ratio.
Maintain a Fixed Charge Coverage Ratio of at least the ratio set forth opposite
each period below measured monthly as of the last day of each
month.
Period
|
Minimum
Fixed Charge Coverage Ratio
|
|
Month
ending February 28, 2006 measured on a trailing 2 month
basis
|
0.90:1.00
|
|
Month
ending March 31, 2006, measured on a year-to-date basis
|
1.10:1.00
|
|
Month
ending April 30, 2006, measured on a year-to-date basis
|
1.30:1.00
|
|
Months
ending May 31, 2006 through December 31, 2006, measured on a year-to-date
basis
|
1.50:1.00
|
|
Month
ending January 31, 2007 and each month thereafter measured on a trailing
12 month basis
|
1.50:1.00
|
68
SECTION
11. EVENTS
OF DEFAULT; REMEDIES ON DEFAULT
11.1 Events
of Default.
Each of
the following shall be an “Event
of Default”
hereunder, if the same shall occur for any reason whatsoever, whether voluntary
or involuntary, by operation of law or otherwise:
(a) Any
Borrower fails to pay any Obligations when due (whether at stated maturity,
on
demand, upon acceleration or otherwise);
(b) Any
representation, warranty or other written statement of any Obligor made in
connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;
(c) Any
Borrower breaches or fail to perform any covenant contained in Sections 7.2,
7.3, 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.1.7, 10.1.8,
10.2
or
10.3;
(d) Any
Obligor breaches or fails to perform any other covenant contained in any Loan
Documents, and such breach or failure is not cured within 15 days after a Senior
Officer of such Obligor has knowledge thereof or receives notice thereof from
Agent, whichever is sooner; provided,
however,
that
such notice and opportunity to cure shall not apply if the breach or failure
to
perform is not capable of being cured within such period or is a willful breach
by an Obligor;
(e) Any
Guarantor repudiates, revokes or attempts to revoke its Guaranty; any Obligor
denies or contests the validity or enforceability of any Loan Documents or
Obligations, or the perfection or priority of any Lien granted to Agent; or
any
Loan Document ceases to be in full force or effect for any reason (other than
a
waiver or release by Agent and Lenders);
(f) Any
breach or default of an Obligor occurs under any document, instrument or
agreement to which it is a party or by which it or any of its Properties is
bound, relating to any Debt (other than the Obligations) in excess of
$1,000,000, if the maturity of or any payment with respect to such Debt may
be
accelerated or demanded due to such breach;
(g) Any
judgment or order for the payment of money is entered against an Obligor in
an
amount that exceeds, individually or cumulatively with all unsatisfied judgments
or orders against all Obligors, $1,000,000 (net of any insurance coverage
therefor acknowledged in writing by the insurer), unless a stay of enforcement
of such judgment or order is in effect, by reason of a pending appeal or
otherwise;
(h) Any
loss,
theft, damage or destruction occurs with respect to any Collateral if the amount
not covered by insurance exceeds $500,000;
69
(i) Any
Obligor is enjoined, restrained or in any way prevented by any Governmental
Authority from conducting any material part of its business; any Obligor suffers
the loss, revocation or termination of any material license, permit, lease
or
agreement necessary to its business; there is a cessation of any material part
of an Obligor’s business for a material period of time; any material Collateral
or Property of an Obligor is taken or impaired through condemnation; any Obligor
agrees to or commences any liquidation, dissolution or winding up of its
affairs; or any Obligor ceases to be Solvent;
(j) Any
Insolvency Proceeding is commenced by any Obligor; an Insolvency Proceeding
is
commenced against any Obligor and: such Obligor consents to the institution
of
the proceeding against it, the petition commencing the proceeding is not timely
controverted by such Obligor, such petition is not dismissed within 30 days
after its filing, or an order for relief is entered in the proceeding; a trustee
(including an interim trustee) is appointed to take possession of any
substantial Property of or to operate any of the business of any Obligor; or
any
Obligor makes an offer of settlement, extension or composition to its unsecured
creditors generally;
(k) A
Reportable Event occurs that constitutes grounds for termination by the Pension
Benefit Guaranty Corporation of any Multiemployer Plan or appointment of a
trustee for any Multiemployer Plan; any Multiemployer Plan is terminated or
any
such trustee is requested or appointed; any Obligor is in “default” (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan
resulting from any withdrawal therefrom; or any event similar to the foregoing
occurs or exists with respect to a Foreign Plan;
(l) Any
Obligor or any of its Senior Officers is criminally indicted or convicted for
(i) a felony committed in the conduct of such Obligor’s business, or (ii) any
state or federal law (including the Controlled Substances Act, Money Laundering
Control Act of 1986 and Illegal Exportation of War Materials Act) that could
lead to forfeiture of any material Property or any Collateral;
(m) A
“default” or “event of default” (as defined in the Existing Subordinated Debt
Documents) shall occur under the Existing Subordinated Debt Documents;
(n) the
subordination and/or lien priority provisions contained in the Intercreditor
Agreement shall for any reason be revoked or invalidated, or otherwise cease
to
be in full force and effect, or (i) any Person shall contest in any manner
the
validity or enforceability of the Intercreditor Agreement, deny that it has
any
further liability or obligation thereunder, or take any action in violation
thereof or fail to take any action required by the terms thereof, or (ii) the
Obligations or Liens granted herein, for any reason shall not have the priority
contemplated by this Agreement, or the Intercreditor Agreement; or
(o) the
bonding or surety industry requires or is granted or deemed to have, collateral
or subrogation rights with respect to any assets other than solely with respect
to accounts receivable arising directly from the lone project which such bonding
or surety company completed such project and not any other project which such
bonding or surety company may also be providing bonds; or
70
(p) Any
event
occurs or condition exists that has a Material Adverse Effect.
11.2 Remedies
upon Default.
If an
Event of Default described in Section 11.1(j)
occurs
with respect to any Borrower, then to the extent permitted by Applicable Law,
all Obligations shall become automatically due and payable and all Commitments
shall terminate, without any action by Agent or notice of any kind. In addition,
or if any other Event of Default exists, Agent may in its discretion (and shall
upon written direction of Required Lenders) do any one or more of the following
from time to time:
(a) declare
any Obligations immediately due and payable, whereupon they shall be due and
payable without diligence, presentment, demand, protest or notice of any kind,
all of which are hereby waived by Borrowers to the fullest extent permitted
by
law;
(b) terminate,
reduce or condition any Commitment, or make any adjustment to the Borrowing
Base;
(c) require
Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other
Obligations that are contingent or not yet due and payable, and, if Obligors
fail promptly to deposit such Cash Collateral, Agent may (and shall upon the
direction of Required Lenders) advance the required Cash Collateral as Revolver
Loans (whether or not an Overadvance exists or is created thereby, or the
conditions in Section
6
are
satisfied); and
(d) exercise
any other rights or remedies afforded under any agreement, by law, at equity
or
otherwise, including the rights and remedies of a secured party under the UCC.
Such rights and remedies include the rights to (i) take possession of any
Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’
expense, and make it available to Agent at a place designated by Agent; (iii)
enter any premises where Collateral is located and store Collateral on such
premises until sold (and if the premises are owned or leased by a Borrower,
Borrowers agree not to charge for such storage); and (iv) sell or otherwise
dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such notice
as may be required by Applicable Law, in lots or in bulk, at such locations,
all
as Agent, in its discretion, deems advisable. Agent shall have the right to
conduct such sales on any Obligor’s premises, without charge, and such sales may
be adjourned from time to time in accordance with Applicable Law. Agent shall
have the right to sell, lease or otherwise dispose of any Collateral for cash,
credit or any combination thereof, and Agent may purchase any Collateral at
public or, if permitted by law, private sale and, in lieu of actual payment
of
the purchase price, may set off the amount of such price against the
Obligations.
11.3 License.
Agent
is hereby granted an irrevocable, non-exclusive license or other right to use,
license or sub-license (without payment of royalty or other compensation to
any
Person) any or all Intellectual Property of Borrowers, computer hardware and
software, trade secrets, brochures, customer lists, promotional and advertising
materials, labels, packaging materials and other Property, in advertising for
sale, marketing, selling, collecting, completing manufacture of, or otherwise
exercising any rights or remedies with respect to, any Collateral. Each
Borrower’s rights and interests under Intellectual Property shall inure to
Agent’s benefit.
71
11.4 Setoff.
Agent,
Lenders and their Affiliates are each authorized by Borrowers at any time during
an Event of Default, without notice to Borrowers or any other Person, to set
off
and to appropriate and apply any deposits (general or special), funds, claims,
obligations, liabilities or other Debt at any time held or owing by Agent,
any
Lender or any such Affiliate to or for the account of any Obligor against any
Obligations, whether or not demand for payment of such Obligation has been
made,
any Obligations have been declared due and payable, are then due, or are
contingent or unmatured, or the Collateral or any guaranty or other security
for
the Obligations is adequate.
11.5 Remedies
Cumulative; No Waiver.
11.5.1
Cumulative
Rights.
All
covenants, conditions, provisions, warranties, guaranties, indemnities and
other
undertakings of Borrowers contained in the Loan Documents are cumulative and
not
in derogation or substitution of each other. In particular, the rights and
remedies of Agent and Lenders are cumulative, may be exercised at any time
and
from time to time, concurrently or in any order, and shall not be exclusive
of
any other rights or remedies that Agent and Lenders may have, whether under
any
agreement, by law, at equity or otherwise.
11.5.2
Waivers.
The
failure or delay of Agent or any Lender to require strict performance by
Borrowers with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise, shall not operate as a waiver
thereof nor as establishment of a course of dealing. All rights and remedies
shall continue in full force and effect until Full Payment of all Obligations.
No modification of any terms of any Loan Documents (including any waiver
thereof) shall be effective, unless such modification is specifically provided
in a writing directed to Borrowers and executed by Agent or the requisite
Lenders, and such modification shall be applicable only to the matter specified.
No waiver of any Default or Event of Default shall constitute a waiver of any
other Default or Event of Default that may exist at such time, unless expressly
stated. If Agent or any Lender accepts performance by any Obligor under any
Loan
Documents in a manner other than that specified therein, or during any Default
or Event of Default, or if Agent or any Lender shall delay or exercise any
right
or remedy under any Loan Documents, such acceptance, delay or exercise shall
not
operate to waive any Default or Event of Default nor to preclude exercise of
any
other right or remedy. It is expressly acknowledged by Borrowers that any
failure to satisfy a financial covenant on a measurement date shall not be
cured
or remedied by satisfaction of such covenant on a subsequent date.
SECTION
12. AGENT
12.1 Appointment,
Authority and Duties of Agent.
12.1.1
Appointment
and Authority.
Each
Lender appoints and designates Bank of America as Agent hereunder. Agent may,
and each Lender authorizes Agent to, enter into all Loan Documents to which
Agent is intended to be a party and accept all Security Documents, for Agent’s
benefit and the Pro Rata benefit of Lenders. Each Lender agrees that any action
taken by Agent or Required Lenders in accordance with the provisions of the
Loan
Documents, and the exercise by Agent or Required Lenders of any rights or
remedies set forth therein, together with all other powers reasonably incidental
thereto, shall be authorized and binding upon all Lenders. Without limiting
the
generality of the foregoing, Agent shall have the sole and exclusive authority
to (a) act as the disbursing and collecting agent for Lenders with respect
to
all payments and collections arising in connection with the Loan Documents;
(b)
execute and deliver as Agent each Loan Document, including any intercreditor
or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties for
purposes of perfecting and administering Liens under the Loan Documents, and
for
all other purposes stated therein; (d) manage, supervise or otherwise deal
with
Collateral; and (e) exercise all rights and remedies given to Agent with respect
to any Collateral under the Loan Documents, Applicable Law or otherwise. The
duties of Agent shall be ministerial and administrative in nature, and Agent
shall not have a fiduciary relationship with any Lender, Secured Party,
Participant or other Person, by reason of any Loan Document or any transaction
relating thereto. Agent alone shall be authorized to determine whether any
Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or
whether to impose or release any reserve, which determinations and judgments,
if
exercised in good faith, shall exonerate Agent from liability to any Lender
or
other Person for any error in judgment.
72
12.1.2
Duties.
Agent
shall not have any duties except those expressly set forth in the Loan
Documents, nor be required to initiate or conduct any Enforcement Action except
to the extent directed to do so by Required Lenders while an Event of Default
exists. The conferral upon Agent of any right shall not imply a duty on Agent’s
part to exercise such right, unless instructed to do so by Required Lenders
in
accordance with this Agreement.
12.1.3
Agent
Professionals.
Agent
may perform its duties through agents and employees. Agent may consult with
and
employ Agent Professionals, and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any advice
given by an Agent Professional. Agent shall not be responsible for the
negligence or misconduct of any agents, employees or Agent Professionals
selected by it with reasonable care.
12.1.4
Instructions
of Required Lenders.
The
rights and remedies conferred upon Agent under the Loan Documents may be
exercised without the necessity of joinder of any other party, unless required
by Applicable Law. Agent may request instructions from Required Lenders with
respect to any act (including the failure to act) in connection with any Loan
Documents, and may seek assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.6
against
all Claims that could be incurred by Agent in connection with any act. Agent
shall be entitled to refrain from any act until it has received such
instructions or assurances, and Agent shall not incur liability to any Person
by
reason of so refraining. Instructions of Required Lenders shall be binding
upon
all Lenders, and no Lender shall have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting in accordance with
the instructions of Required Lenders. Notwithstanding the foregoing,
instructions by and consent of all Lenders shall be required in the
circumstances described in Section 14.1.1,
and in
no event shall Required Lenders, without the prior written consent of each
Lender, direct Agent to accelerate and demand payment of Loans held by one
Lender without accelerating and demanding payment of all other Loans, nor to
terminate the Commitments of one Lender without terminating the Commitments
of
all Lenders. In no event shall Agent be required to take any action that, in
its
opinion, is contrary to Applicable Law or any Loan Documents or could subject
any Agent Indemnitee to personal liability.
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12.2 Agreements
Regarding Collateral and Field Examination Reports.
12.2.1
Lien
Releases; Care of Collateral.
Lenders
authorize Agent to release any Lien with respect to any Collateral (a) upon
Full
Payment of the Obligations, (b) that is the subject of an Asset Disposition
which Borrowers certify in writing to Agent is a Permitted Asset Disposition
or
a Lien which Borrowers certify is a Permitted Lien entitled to priority over
Agent’s Liens (and Agent may rely conclusively on any such certificate without
further inquiry), (c) that does not constitute a material part of the
Collateral, or (d) with the written consent of all Lenders. Agent shall have
no
obligation whatsoever to any Lenders to assure that any Collateral exists or
is
owned by a Borrower, or is cared for, protected, insured or encumbered, nor
to
assure that Agent’s Liens have been properly created, perfected or enforced, or
are entitled to any particular priority, nor to exercise any duty of care with
respect to any Collateral.
12.2.2
Possession
of Collateral.
Agent
and Lenders appoint each other Lender as agent for the purpose of perfecting
Liens (for the benefit of Secured Parties) in any Collateral that, under the
UCC
or other Applicable Law, can be perfected by possession. If any Lender obtains
possession of any such Collateral, it shall notify Agent thereof and, promptly
upon Agent’s request, deliver such Collateral to Agent or otherwise deal with
such Collateral in accordance with Agent’s instructions.
12.2.3
Reports.
Agent
shall promptly, upon receipt thereof, forward to each Lender copies of the
results of any field audit or other examination or any appraisal prepared by
or
on behalf of Agent with respect to any Obligor or Collateral (“Report”).
Each
Lender agrees (a) that neither Bank of America nor Agent makes any
representation or warranty as to the accuracy or completeness of any Report,
and
shall not be liable for any information contained in or omitted from any Report;
(b) that the Reports are not intended to be comprehensive audits or
examinations, and that Agent or any other Person performing any audit or
examination will inspect only specific information regarding Obligations or
the
Collateral and will rely significantly upon Borrowers’ books and records as well
as upon representations of Borrowers’ officers and employees; and (c) to keep
all Reports confidential and strictly for such Lender’s internal use, and not to
distribute any Report (or the contents thereof) to any Person (except to such
Lender’s Participants, attorneys and accountants) or use any Report in any
manner other than administration of the Loans and other Obligations. Each Lender
agrees to indemnify and hold harmless Agent and any other Person preparing
a
Report from any action such Lender may take as a result of or any conclusion
it
may draw from any Report, as well as any Claims arising in connection with
any
third parties that obtain all or any part of a Report through such
Lender.
12.3 Reliance
By Agent.
Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
certification, notice or other communication (including those by telephone,
telex, telegram, telecopy or e-mail) believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person, and upon the advice
and statements of Agent Professionals.
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12.4 Action
Upon Default.
Agent
shall not be deemed to have knowledge of any Default or Event of Default unless
it has received written notice from a Lender or Borrower specifying the
occurrence and nature thereof. If any Lender acquires knowledge of a Default
or
Event of Default, it shall promptly notify Agent and the other Lenders thereof
in writing. Each Lender agrees that, except as otherwise provided in any Loan
Documents or with the written consent of Agent and Required Lenders, it will
not
take any Enforcement Action, accelerate its Obligations, or exercise any right
that it might otherwise have under Applicable Law to credit bid at foreclosure
sales, UCC sales or other similar dispositions of Collateral. Notwithstanding
the foregoing, however, a Lender may take action to preserve or enforce its
rights against an Obligor where a deadline or limitation period is applicable
that would, absent such action, bar enforcement of Obligations held by such
Lender, including the filing of proofs of claim in an Insolvency
Proceeding.
12.5 Ratable
Sharing.
If any
Lender shall obtain any payment or reduction of any Obligation, whether through
set-off or otherwise, in excess of its share of such Obligation, determined
on a
Pro Rata basis or in accordance with Section
5.6.1,
as
applicable, such Lender shall forthwith purchase from Agent, Issuing Bank and
the other Lenders such participations in the affected Obligation as are
necessary to cause the purchasing Lender to share the excess payment or
reduction on a Pro Rata basis or in accordance with Section
5.6.1,
as
applicable. If any of such payment or reduction is thereafter recovered from
the
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
12.6 Indemnification
of Agent Indemnitees.
12.6.1
Indemnification.
EACH LENDER
SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT
REIMBURSED BY OBLIGORS (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS
OF
OBLIGORS UNDER ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS
THAT
MAY BE INCURRED BY OR ASSERTED AGAINST ANY AGENT
INDEMNITEE.
If Agent
is sued by any receiver, trustee in bankruptcy, debtor-in-possession or other
Person for any alleged preference from an Obligor or fraudulent transfer, then
any monies paid by Agent in settlement or satisfaction of such proceeding,
together with all interest, costs and expenses (including attorneys’ fees)
incurred in the defense of same, shall be promptly reimbursed to Agent by
Lenders to the extent of each Lender’s Pro Rata share.
12.6.2
Proceedings.
Without
limiting the generality of the foregoing, if at any time (whether prior to
or
after the Commitment Termination Date) any proceeding is brought against any
Agent Indemnitees by an Obligor, or any Person claiming through an Obligor,
to
recover damages for any act taken or omitted by Agent in connection with any
Obligations, Collateral, Loan Documents or matters relating thereto, or
otherwise to obtain any other relief of any kind on account of any transaction
relating to any Loan Documents, each Lender agrees to indemnify and hold
harmless Agent Indemnitees with respect thereto and to pay to Agent Indemnitees
such Lender’s Pro Rata share of any amount that any Agent Indemnitee is required
to pay under any judgment or other order entered in such proceeding or by reason
of any settlement, including all interest, costs and expenses (including
attorneys’ fees) incurred in defending same. In Agent’s discretion, Agent may
reserve for any such proceeding, and may satisfy any judgment, order or
settlement, from proceeds of Collateral prior to making any distributions of
Collateral proceeds to Lenders.
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12.7 Limitation
on Responsibilities of Agent.
Agent
shall not be liable to Lenders for any action taken or omitted to be taken
under
the Loan Documents, except for losses directly and solely caused by Agent’s
gross negligence or willful misconduct. Agent does not assume any responsibility
for any failure or delay in performance or any breach by any Obligor or Lender
of any obligations under the Loan Documents. Agent does not make to Lenders
any
express or implied warranty, representation or guarantee with respect to any
Obligations, Collateral, Loan Documents or Obligor. No Agent Indemnitee shall
be
responsible to Lenders for any recitals, statements, information,
representations or warranties contained in any Loan Documents; the execution,
validity, genuineness, effectiveness or enforceability of any Loan Documents;
the genuineness, enforceability, collectibility, value, sufficiency, location
or
existence of any Collateral, or the validity, extent, perfection or priority
of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor. No Agent Indemnitee shall have any obligation to any Lender to ascertain
or inquire into the existence of any Default or Event of Default, the observance
or performance by any Obligor of any terms of the Loan Documents, or the
satisfaction of any conditions precedent contained in any Loan
Documents.
12.8 Successor
Agent and Co-Agents.
12.8.1
Resignation;
Successor Agent.
Subject
to the appointment and acceptance of a successor Agent as provided below, Agent
may resign at any time by giving at least 30 days written notice thereof to
Lenders and Borrowers. Upon receipt of such notice, Required Lenders shall
have
the right to appoint a successor Agent which shall be (a) a Lender or an
Affiliate of a Lender; or (b) a commercial bank that is organized under the
laws
of the United States or any state or district thereof, has a combined capital
surplus of at least $200,000,000 and (provided no Default or Event of Default
exists) is reasonably acceptable to Borrowers. If no successor agent is
appointed prior to the effective date of the resignation of Agent, then Agent
may appoint a successor agent from among Lenders. Upon acceptance by a successor
Agent of an appointment to serve as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the powers and duties of the
retiring Agent without further act, and the retiring Agent shall be discharged
from its duties and obligations hereunder but shall continue to have the
benefits of the indemnification set forth in Sections 12.6
and
14.2.
Notwithstanding any Agent’s resignation, the provisions of this Section 12
shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while Agent. Any successor by merger or acquisition of the
stock or assets of Bank of America shall continue to be Agent hereunder without
further act on the part of the parties hereto, unless such successor resigns
as
provided above.
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12.8.2
Separate
Collateral Agent.
It is
the intent of the parties that there shall be no violation of any Applicable
Law
denying or restricting the right of financial institutions to transact business
in any jurisdiction. If Agent believes that it may be limited in the exercise
of
any rights or remedies under the Loan Documents due to any Applicable Law,
Agent
may appoint an additional Person who is not so limited, as a separate collateral
agent or co-collateral agent. If Agent so appoints a collateral agent or
co-collateral agent, each right and remedy intended to be available to Agent
under the Loan Documents shall also be vested in such separate agent. Every
covenant and obligation necessary to the exercise thereof by such agent shall
run to and be enforceable by it as well as Agent. Lenders shall execute and
deliver such documents as Agent deems appropriate to vest any rights or remedies
in such agent. If any collateral agent or co-collateral agent shall die or
dissolve, become incapable of acting, resign or be removed, then all the rights
and remedies of such agent, to the extent permitted by Applicable Law, shall
vest in and be exercised by Agent until appointment of a new agent.
12.9 Due
Diligence and Non-Reliance.
Each
Lender acknowledges and agrees that it has, independently and without reliance
upon Agent or any other Lenders, and based upon such documents, information
and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund Loans
and
participate in LC Obligations hereunder. Each Lender has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such Lender
feels necessary. Each Lender further acknowledges and agrees that the other
Lenders and Agent have made no representations or warranties concerning any
Obligor, any Collateral or the legality, validity, sufficiency or enforceability
of any Loan Documents or Obligations. Each Lender will, independently and
without reliance upon the other Lenders or Agent, and based upon such financial
statements, documents and information as it deems appropriate at the time,
continue to make and rely upon its own credit decisions in making Loans and
participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents. Except for notices, reports and other information
expressly requested by a Lender, Agent shall have no duty or responsibility
to
provide any Lender with any notices, reports or certificates furnished to Agent
by any Obligor or any credit or other information concerning the affairs,
financial condition, business or Properties of any Obligor (or any of its
Affiliates) which may come into possession of Agent or any of Agent’s
Affiliates.
12.10 Replacement
of Certain Lenders.
In the
event that any Lender (a) fails to fund its Pro Rata share of any Loan or LC
Obligation hereunder, and such failure is not cured within two Business Days,
(b) defaults in performing any of its obligations under the Loan Documents,
or
(c) fails to give its consent to any amendment, waiver or action for which
consent of all Lenders was required and Required Lenders consented, then, in
addition to any other rights and remedies that any Person may have, Agent may,
by notice to such Lender within 120 days after such event, require such Lender
to assign all of its rights and obligations under the Loan Documents to Eligible
Assignee(s) specified by Agent, pursuant to appropriate Assignment and
Acceptance(s) and within 20 days after Agent’s notice. Agent is irrevocably
appointed as attorney-in-fact to execute any such Assignment and Acceptance
if
the Lender fails to execute same. Such Lender shall be entitled to receive,
in
cash, concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).
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12.11 Remittance
of Payments and Collections.
12.11.1
Remittances
Generally.
All
payments by any Lender to Agent shall be made by the time and on the day set
forth in this Agreement, in immediately available funds. If no time for payment
is specified or if payment is due on demand by Agent and request for payment
is
made by Agent by 11:00 a.m. on a Business Day, payment shall be made by Lender
not later than 2:00 p.m. on such day, and if request is made after 11:00 a.m.,
then payment shall be made by 11:00 a.m. on the next Business Day. Payment
by
Agent to any Lender shall be made by wire transfer, in the type of funds
received by Agent. Any such payment shall be subject to Agent’s right of offset
for any amounts due from such Lender under the Loan Documents.
12.11.2
Failure
to Pay.
If any
Lender fails to pay any amount when due by it to Agent pursuant to the terms
hereof, such amount shall bear interest from the due date until paid at the
rate
determined by Agent as customary in the banking industry for interbank
compensation. In no event shall Borrowers be entitled to receive credit for
any
interest paid by a Lender to Agent.
12.11.3
Recovery
of Payments.
If
Agent pays any amount to a Lender in the expectation that a related payment
will
be received by Agent from an Obligor and such related payment is not received,
then Agent may recover such amount from each Lender that received it. If Agent
determines at any time that an amount received under any Loan Document must
be
returned to an Obligor or paid to any other Person pursuant to Applicable Law
or
otherwise, then, notwithstanding any other term of any Loan Document, Agent
shall not be required to distribute such amount to any Lender. If any amounts
received and applied by Agent to any Obligations are later required to be
returned by Agent pursuant to Applicable Law, Lenders shall pay to Agent, on
demand, such Lender’s Pro Rata share of the amounts required to be
returned.
12.12 Agent
in its Individual Capacity.
As a
Lender, Bank of America shall have the same rights and remedies under the other
Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders”
or any similar term shall include Bank of America in its capacity as a Lender.
Each of Bank of America and its Affiliates may accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, provide Bank Products
to, act as trustee under indentures of, serve as financial or other advisor
to,
and generally engage in any kind of business with, Obligors and their
Affiliates, as if Bank of America were any other bank, without any duty to
account therefor (including any fees or other consideration received in
connection therewith) to the other Lenders. In their individual capacity, Bank
of America and its Affiliates may receive information regarding Obligors, their
Affiliates and their Account Debtors (including information subject to
confidentiality obligations), and each Lender agrees that Bank of America and
its Affiliates shall be under no obligation to provide such information to
Lenders, if acquired in such individual capacity and not as Agent
hereunder.
12.13 Agent
Titles.
Each
Lender, other than Bank of America, that is designated (on the cover page of
this Agreement or otherwise) by Bank of America as an “Agent” or “Arranger” of
any type shall not have any right, power, responsibility or duty under any
Loan
Documents other than those applicable to all Lenders, and shall in no event
be
deemed to have any fiduciary relationship with any other Lender.
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12.14 No
Third Party Beneficiaries.
This
Section 12
is
an
agreement solely among Lenders and Agent, and, except with respect to the notice
requirement provided in Section
12.8.1,
does
not confer any rights or benefits upon Borrowers or any other Person. As between
Borrowers and Agent, any action that Agent may take under any Loan Documents
shall be conclusively presumed to have been authorized and directed by Lenders
as herein provided.
SECTION
13. BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of Borrowers, Agent
and
Lenders and their respective successors and assigns, except that (a) no Borrower
shall have the right to assign its rights or delegate its obligations under
any
Loan Documents, and (b) any assignment by a Lender must be made in compliance
with Section 13.3.
Agent
may treat the Person which made any Loan as the owner thereof for all purposes
until such Person makes an assignment in accordance with Section 13.3.
Any
authorization or consent of a Lender shall be conclusive and binding on any
subsequent transferee or assignee of such Lender.
13.2 Participations.
13.2.1
Permitted
Participants; Effect.
Any
Lender may, in the ordinary course of its business and in accordance with
Applicable Law, at any time sell to a financial institution (“Participant”) a
participating interest in the rights and obligations of such Lender under any
Loan Documents. Despite any 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 performance of such obligations, such Lender shall remain the holder
of its Loans and Commitments for all purposes, all amounts payable by Borrowers
shall be determined as if such Lender had not sold such participating interests,
and Borrowers and Agent shall continue to deal solely and directly with such
Lender in connection with the Loan Documents. Each Lender shall be solely
responsible for notifying its Participants of any matters under the Loan
Documents, and Agent and the other Lenders shall not have any obligation or
liability to any such Participant. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.9
unless
Borrowers agree otherwise in writing.
13.2.2
Voting
Rights.
Each
Lender shall retain the sole right to approve, without the consent of any
Participant, any amendment, waiver or other modification of any Loan Documents
other than that which forgives principal, interest or fees, reduces the stated
interest rate or fees payable with respect to any Loan or Commitment in which
such Participant has an interest, postpones the Commitment Termination Date
or
any date fixed for any regularly scheduled payment of principal, interest or
fees on such Loan or Commitment, or releases any Borrower, Guarantor or
substantial portion of the Collateral.
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13.2.3
Benefit
of Set-Off.
Borrowers agree that each Participant shall have a right of set-off in respect
of its participating interest to the same extent as if such interest were owing
directly to a Lender, and each Lender shall also retain the right of set-off
with respect to any participating interests sold by it. By exercising any right
of set-off, a Participant agrees to share with Lenders all amounts received
through its set-off, in accordance with Section 12.5
as if
such Participant were a Lender.
13.3 Assignments.
13.3.1
Permitted
Assignments.
A
Lender may assign to any Eligible Assignee any of its rights and obligations
under the Loan Documents, as long as (a) each assignment is of a constant,
and
not a varying, percentage of the transferor Lender’s rights and obligations
under the Loan Documents and, in the case of a partial assignment, is in a
minimum principal amount of $5,000,000 (unless otherwise agreed by Agent in
its
discretion) and integral multiples of $1,000,000 in excess of that amount;
(b)
except in the case of an assignment in whole of a Lender’s rights and
obligations, the aggregate amount of the Commitments retained by the transferor
Lender be at least $5,000,000 (unless otherwise agreed by Agent in its
discretion); and (c) the parties to each such assignment shall execute and
deliver to Agent, for its acceptance and recording, an Assignment and
Acceptance. Nothing herein shall limit the right of a Lender to pledge or assign
any rights under the Loan Documents to (i) any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A of the
Board of Governors and any Operating Circular issued by such Federal Reserve
Bank, or (ii) counterparties to swap agreements relating to any Loans;
provided,
however,
that
any payment by Borrowers to the assigning Lender in respect of any Obligations
assigned as described in this sentence shall satisfy Borrowers’ obligations
hereunder to the extent of such payment, and no such assignment shall release
the assigning Lender from its obligations hereunder.
13.3.2
Effect;
Effective Date.
Upon
delivery to Agent of an assignment notice in the form of Exhibit B
and a
processing fee of $5,000, such assignment shall become effective as specified
in
the notice, if it complies with this Section 13.3.
From
the effective date of such assignment, the Eligible Assignee shall for all
purposes be a Lender under the Loan Documents, and shall have all rights and
obligations of a Lender thereunder. Upon consummation of an assignment, the
transferor Lender, Agent and Borrowers shall make appropriate arrangements
for
issuance of replacement and/or new Notes, as appropriate.
13.4 Tax
Treatment.
If any
interest in a Loan Document is transferred to a Transferee that is organized
under the laws of any jurisdiction other than the United States or any state
or
district thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section
5.10.
13.5 Representation
of Lenders.
Each
Lender represents and warrants to each Borrower, Agent and other Lenders that
none of the consideration used by it to fund its Loans or to participate in
any
other transactions under this Agreement constitutes for any purpose of ERISA
or
Section 4975 of the Internal Revenue Code assets of any “plan” as defined in
Section 3(3) of ERISA or Section 4975 of the Internal Revenue Code and the
interests of such Lender in and under the Loan Documents shall not constitute
plan assets under ERISA.
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SECTION
14. MISCELLANEOUS
14.1 Consents,
Amendments and Waivers.
14.1.1
Amendment.
No
modification of any Loan Document, including any extension or amendment of
a
Loan Document or any waiver of a Default or Event of Default, shall be effective
without the prior written agreement of Agent, with the consent of Required
Lenders, and each Obligor party to such Loan Document; provided,
however,
that
(a) without
the prior written consent of Agent, no modification shall be effective with
respect to any provision in a Loan Document that relates to any rights, duties
or discretion of Agent;
(b) without
the prior written consent of Issuing Bank, no modification shall be effective
with respect to any LC Obligations or Section 2.3;
(c) without
the prior written consent of each affected Lender, no modification shall be
effective that would (i) increase the Commitment of such Lender; or (ii) reduce
the amount of, or waive or delay payment of, any principal, interest or fees
payable to such Lender; and
(d) without
the prior written consent of all Lenders (except a defaulting Lender as provided
in Section 4.2),
no
modification shall be effective that would (i) extend the Revolver
Termination Date; (ii) alter Section 5.6,
7.1
(except
to add Collateral), or 14.1.1;
(iii) amend the definitions of Borrowing Base (and the defined terms used
in such definition), Pro Rata or Required Lenders; (iv) increase any
advance rate, or increase total Commitments; (vi) release Collateral with a
book value greater than $500,000 during any calendar year, except as currently
contemplated by the Loan Documents; or (vii) release any Obligor from
liability for any Obligations, if such Obligor is Solvent at the time of the
release.
14.1.2
Limitations.
The
agreement of Borrowers shall not be necessary to the effectiveness of any
modification of a Loan Document that deals solely with the rights and duties
of
Lenders, Agent and/or Issuing Bank as among themselves. Only the consent of
the
parties to any agreement relating to a Bank Product shall be required for any
modification of such agreement, and no Affiliate of a Lender that is party
to a
Bank Product agreement shall have any other right to consent to or participate
in any manner in modification of any other Loan Document. The making of any
Loans during the existence of a Default or Event of Default shall not be deemed
to constitute a waiver of such Default or Event of Default, nor to establish
a
course of dealing. Any waiver or consent granted by Lenders hereunder shall
be
effective only if in writing, and then only in the specific instance and for
the
specific purpose for which it is given.
14.1.3
Payment
for Consents.
No
Borrower will, directly or indirectly, pay any remuneration or other thing
of
value, whether by way of additional interest, fee or otherwise, to any Lender
(in its capacity as a Lender hereunder) as consideration for agreement by such
Lender with any modification of any Loan Documents, unless such remuneration
or
value is concurrently paid, on the same terms, on a Pro Rata basis to all
Lenders providing their consent.
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14.2 Indemnity.
EACH
BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS
THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE (OTHER THAN CLAIMS
BROUGHT BY ONE INDEMNITEE AGAINST ANOTHER), INCLUDING CLAIMS ARISING FROM THE
NEGLIGENCE OF AN INDEMNITEE.
In no
event shall any party to a Loan Document have any obligation thereunder to
indemnify or hold harmless an Indemnitee with respect to a Claim that is (i)
determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from the gross negligence or willful misconduct of such
Indemnitee, or (ii) for a personal injury.
14.3 Notices
and Communications.
14.3.1
Notice
Address.
Subject
to Section 4.1.4,
all
notices, requests and other communications by or to a party hereto shall be
in
writing and shall be given to any Borrower, at Borrower Agent’s address shown on
the signature pages hereof, and to any other Person at its address shown on
the
signature pages hereof (or, in the case of a Person who becomes a Lender after
the Closing Date, at the address shown on its Assignment and Acceptance), or
at
such other address as a party may hereafter specify by notice in accordance
with
this Section 14.3.
Each
such notice, request or other communication shall be effective only (a) if
given
by facsimile transmission, when transmitted to the applicable facsimile number,
if confirmation of receipt is received; (b) if given by mail, three Business
Days after deposit in the U.S. mail, with first-class postage pre-paid,
addressed to the applicable address; or (c) if given by personal delivery,
when
duly delivered to the notice address with receipt acknowledged. Notwithstanding
the foregoing, no notice to Agent pursuant to Section 2.1.4,
2.3, 3.1.2, 4.1.1
or
5.3.3
shall be
effective until actually received by the individual to whose attention at Agent
such notice is required to be sent. Any written notice, request or other
communication that is not sent in conformity with the foregoing provisions
shall
nevertheless be effective on the date actually received by the noticed party.
Any notice received by Borrower Agent shall be deemed received by all
Borrowers.
14.3.2
Electronic
Communications; Voice Mail.
Electronic mail and internet websites may be used only for routine
communications, such as financial statements, Borrowing Base Certificates and
other information required by Section 10.1.2,
administrative matters, distribution of Loan Documents for execution, and
matters permitted under Section 4.1.4.
Agent
and Lenders make no assurances as to the privacy and security of electronic
communications. Electronic and voice mail may not be used as effective notice
under the Loan Documents.
14.3.3
Non-Conforming
Communications.
Agent
and Lenders may rely upon any notices purportedly given by or on behalf of
any
Borrower even if such notices were not made in a manner specified herein, were
incomplete or were not confirmed, or if the terms thereof, as understood by
the
recipient, varied from a later confirmation. Each Borrower shall indemnify
and
hold harmless each Indemnitee from any liabilities, losses, costs and expenses
arising from any telephonic communication purportedly given by or on behalf
of a
Borrower.
14.4 Performance
of Borrowers’ Obligations.
Agent
may, in its discretion at any time and from time to time, at Borrowers’ expense,
pay any amount or do any act required of a Borrower under any Loan Documents
or
otherwise lawfully requested by Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien. All payments, costs and expenses (including Extraordinary
Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers,
on
demand,
with
interest from the date incurred to the date of payment thereof at the Default
Rate applicable to Base Rate Revolver Loans. Any payment made or action taken
by
Agent under this Section shall be without prejudice to any right to assert
an
Event of Default or to exercise any other rights or remedies under the Loan
Documents.
82
14.5 Credit
Inquiries.
Each
Borrower hereby authorizes Agent and Lenders (but they shall have no obligation)
to respond to usual and customary credit inquiries from third parties concerning
any Borrower or Subsidiary.
14.6 Severability.
Wherever possible, each provision of the Loan Documents shall be interpreted
in
such manner as to be valid under Applicable Law. If any provision is found
to be
invalid under Applicable Law, it shall be ineffective only to the extent of
such
invalidity and the remaining provisions of the Loan Documents shall remain
in
full force and effect.
14.7 Cumulative
Effect; Conflict of Terms.
The
provisions of the Loan Documents are cumulative. The parties acknowledge that
the Loan Documents may use several different limitations, tests or measurements
to regulate the same or similar matters, and they agree that these are
cumulative and that each must be performed as provided. Except as otherwise
specifically provided in another Loan Document (by specific reference to the
applicable provision of this Agreement), if any provision contained herein
is in
direct conflict with any provision in another Loan Document, the provision
herein shall govern and control.
14.8 Counterparts;
Facsimile Signatures.
Any
Loan Document may be executed in counterparts, each of which taken together
shall constitute one instrument. Loan Documents may be executed and delivered
by
facsimile, and they shall have the same force and effect as manually signed
originals. Agent may require confirmation by a manually-signed original, but
failure to request or deliver same shall not limit the effectiveness of any
facsimile signature.
14.9 Entire
Agreement.
Time is
of the essence of the Loan Documents. The Loan Documents embody the entire
understanding of the parties with respect to the subject matter thereof and
supersede all prior understandings regarding the same subject
matter.
14.10 Obligations
of Lenders.
The
obligations of each Lender hereunder are several, and no Lender shall be
responsible for the obligations or Commitments of any other Lender. Amounts
payable hereunder to each Lender shall be a separate and independent debt,
and
each Lender shall be entitled, to the extent not otherwise restricted hereunder,
to protect and enforce its rights arising out of the Loan Documents. It shall
not be necessary for Agent or any other Lender to be joined as an additional
party in any proceeding for such purposes. Nothing in this Agreement and no
action of Agent or Lenders pursuant to the Loan Documents shall be deemed to
constitute Agent and Lenders to be a partnership, association, joint venture
or
any other kind of entity, nor to constitute control of any Borrower. Each
Borrower acknowledges and agrees that in connection with all aspects of any
transaction contemplated by the Loan Documents, Borrowers, Agent, Issuing Bank
and Lenders have an arms-length business relationship that creates no fiduciary
duty on the part of Agent, Issuing Bank or any Lender, and each Borrower, Agent,
Issuing Bank and Lender expressly disclaims any fiduciary
relationship.
83
14.11 Confidentiality.
During
the term of this Agreement and for 12 months thereafter, Agent and Lenders
agree
to take reasonable precautions to maintain the confidentiality of any
information that Borrowers deliver to Agent and Lenders and identify as
confidential at the time of delivery, except that Agent and any Lender may
disclose such information (a) to their respective officers, directors,
employees, Affiliates and agents, including legal counsel, auditors and other
professional advisors; (b) to any party to the Loan Documents from time to
time;
(c) pursuant to the order of any court or administrative agency; (d) upon the
request of any Governmental Authority exercising regulatory authority over
Agent
or such Lender (Agent or any Lender who receives such request shall provide
notice thereof to Borrower Agent); (e) which ceases to be confidential, other
than by an act or omission of Agent or any Lender, or which becomes available
to
Agent or any Lender on a nonconfidential basis; (f) to the extent reasonably
required in connection with any litigation relating to any Loan Documents or
transactions contemplated thereby, or otherwise as required by Applicable Law;
(g) to the extent reasonably required for the exercise of any rights or remedies
under the Loan Documents; (h) to any actual or proposed party to a Bank Product
or to any Transferee, as long as such Person agrees to be bound by the
provisions of this Section; (i) to the National Association of Insurance
Commissioners or any similar organization, or to any nationally recognized
rating agency that requires access to information about a Lender’s portfolio in
connection with ratings issued with respect to such Lender; (j) to any investor
or potential investor in an Approved Fund that is a Lender or Transferee, but
solely for use by such investor to evaluate an investment in such Approved
Fund,
or to any manager, servicer or other Person in connection with its
administration of any such Approved Fund; or (k) with the consent of Borrowers.
Any party to whom confidential information of Borrowers is disclosed shall
be
advised of the confidential nature of the information, and except in the case
of
(c) and (d) above, shall have agreed to or be deemed to be subject to the
confidentiality provisions of this Section. Notwithstanding the foregoing,
Agent
and Lenders may issue and disseminate to the public general information
describing this credit facility, including the names and addresses of Borrowers
and a general description of Borrowers’ businesses, and may use Borrowers’ names
in advertising and other promotional materials.
14.12 [Intentionally
Omitted].
14.13 GOVERNING
LAW.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO
ANY
CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO
NATIONAL BANKS).
84
14.14 Consent
to Forum; Arbitration.
14.14.1 Forum. EACH
BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR
STATE COURT SITTING IN OR WITH JURISDICTION OVER CALIFORNIA, IN ANY PROCEEDING
OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH
PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER
IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE
REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR
INCONVENIENT FORUM.
Nothing
herein shall limit the right of Agent or any Lender to bring proceedings against
any Obligor in any other court. Nothing in this Agreement shall be deemed to
preclude enforcement by Agent of any judgment or order obtained in any forum
or
jurisdiction.
14.14.2
Arbitration.
Notwithstanding any other provision of this Agreement to the contrary, any
controversy or claim among the parties relating in any way to any Obligations
or
Loan Documents, including any alleged tort, shall at the request of any party
hereto be determined by binding arbitration conducted in accordance with the
United States Arbitration Act (Title 9 U.S. Code). Arbitration proceedings
will
be determined in accordance with the Act, the then-current rules and procedures
for the arbitration of financial services disputes of the American Arbitration
Association (“AAA”), and the terms of this Section. In the event of any
inconsistency, the terms of this Section shall control. If AAA is unwilling
or
unable to serve as the provider of arbitration or to enforce any provision
of
this Section, Agent may designate another arbitration organization with similar
procedures to serve as the provider of arbitration. The arbitration proceedings
shall be conducted in Los Angeles or Pasadena, California. The arbitration
hearing shall commence within 90 days of the arbitration demand and close within
90 days thereafter. The arbitration award must be issued within 30 days after
close of the hearing (subject to extension by the arbitrator for up to 60 days
upon a showing of good cause), and shall include a concise written statement
of
reasons for the award. The arbitrator shall give effect to applicable statutes
of limitation in determining any controversy or claim, and for these purposes,
service on AAA under applicable AAA rules of a notice of claim is the equivalent
of the filing of a lawsuit. Any dispute concerning this Section or whether
a
controversy or claim is arbitrable shall be determined by the arbitrator. The
arbitrator shall have the power to award legal fees to the extent provided
by
this Agreement. Judgment upon an arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuant to a provisional or ancillary remedy shall not constitute
a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action
for
judicial relief. No controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the proposed submission,
such controversy or claim relates to an obligation secured by Real Estate,
but
if all parties do not consent to submission of such a controversy or claim
to
arbitration, it shall be determined as provided in the next sentence. At the
request of any party, a controversy or claim that is not submitted to
arbitration as provided above shall be determined by judicial reference; and
if
such an election is made, the parties shall designate to the court a referee
or
referees selected under the auspices of the AAA in the same manner as
arbitrators are selected in AAA sponsored proceedings and the presiding referee
of the panel (or the referee if there is a single referee) shall be an active
attorney or retired judge; and judgment upon the award rendered by such referee
or referees shall be entered in the court in which proceeding was commenced.
None of the foregoing provisions of this Section shall limit the right of Agent
or Lenders to exercise self-help remedies, such as setoff, foreclosure or sale
of any Collateral or to obtain provisional or ancillary remedies from a court
of
competent jurisdiction before, after or during any arbitration proceeding.
The
exercise of a remedy does not waive the right of any party to resort to
arbitration or reference. At Agent’s option, foreclosure under a Mortgage may be
accomplished either by exercise of power of sale thereunder or by judicial
foreclosure.]
85
14.15 Waivers
by Borrowers.
To the
fullest extent permitted by Applicable Law, each Borrower waives (a) the right
to trial by jury (which Agent and each Lender hereby also waives) in any
proceeding, claim or counterclaim of any kind relating in any way to any Loan
Documents, Obligations or Collateral; (b) presentment, demand, protest, notice
of presentment, default, non-payment, maturity, release, compromise, settlement,
extension or renewal of any commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which a Borrower may in any way be liable, and hereby ratifies anything
Agent
may do in this regard; (c) notice prior to taking possession or control of
any
Collateral; (d) any bond or security that might be required by a court prior
to
allowing Agent to exercise any rights or remedies; (e) the benefit of all
valuation, appraisement and exemption laws; (f) any claim against Agent or
any
Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any
way relating to any Enforcement Action, Obligations, Loan Documents or
transactions relating thereto; and (g) notice of acceptance hereof.
Each
Borrower acknowledges that the foregoing waivers are a material inducement
to
Agent and Lenders entering into this Agreement and that Agent and Lenders are
relying upon the foregoing in their dealings with Borrowers. Each Borrower
has
reviewed the foregoing waivers with its legal counsel and has knowingly and
voluntarily waived its jury trial and other rights following consultation with
legal counsel. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
14.16 Patriot
Act Notice.
Agent
and Lenders hereby notify Borrowers that pursuant to the requirements of the
Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Borrower, including its legal name, address,
tax ID number and other information that will allow Agent and Lenders to
identify it in accordance with the Patriot Act. Agent and Lenders will also
require information regarding each personal guarantor, if any, and may require
information regarding Borrowers’ management and owners, such as legal name,
address, social security number and date of birth.
[Remainder
of page intentionally left blank; signatures begin on following
page]
86
EXHIBIT
A
to
ASSIGNMENT
AND ACCEPTANCE
Reference
is made to the Loan and Security Agreement dated as of March __, 2006, as
amended (“Loan
Agreement”),
among
MODTECH HOLDINGS, INC., a Delaware corporation (“Borrower
Agent”)
and
these Subsidiaries of Borrower Agent parties thereto (individually, a
“Borrower”
and
collectively “Borrowers”),
BANK
OF AMERICA, N.A.,
as
agent (“Agent”)
for
the financial institutions from time to time party to the Loan Agreement
(“Lenders”),
and
such Lenders. Terms are used herein as defined in the Loan
Agreement.
______________________________________
(“Assignor”)
and
______________________________________ “Assignee”)
agree
as follows:
1. Assignor
hereby assigns to Assignee and Assignee hereby purchases and assumes from
Assignor (a) a principal amount of $________ of Assignor’s outstanding Revolver
Loans and $___________ of Assignor’s participations in LC Obligations, and (b)
the amount of $__________ of Assignor’s Revolver Commitment (which represents
(____%) of the total Revolver Commitments); and (the foregoing items being,
collectively, the “Assigned
Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest. This Agreement shall be effective as of the date (“Effective
Date”)
indicated in the corresponding Assignment Notice delivered to Agent, provided
such Assignment Notice is executed by Assignor, Assignee, Agent and Borrower
Agent, if applicable. From and after the Effective Date, Assignee hereby
expressly assumes, and undertakes to perform, all of Assignor’s obligations in
respect of the Assigned Interest, and all principal, interest, fees and other
amounts which would otherwise be payable to or for Assignor’s account in respect
of the Assigned Interest shall be payable to or for Assignee’s account, to the
extent such amounts accrue on or after the Effective Date.
2. Assignor
(i) represents that as of the date hereof, prior to giving effect to this
assignment, its Revolver Commitment is $__________, and the outstanding balance
of its Revolver Loans and participations in LC Obligations is $__________;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or
any
other instrument or document furnished pursuant thereto, other than that
Assignor is the legal and beneficial owner of the interest being assigned
by it
hereunder and that such interest is free and clear of any adverse claim;
and
(iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrowers or the performance by
Borrowers of their obligations under the Loan Documents. [Assignor
is attaching the
Note[s] held by it and requests that Agent exchange such Note[s] for new
Notes
payable to Assignee [and Assignor].]
87
3. Assignee
(i) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (ii) confirms that it has received copies of the
Loan
Agreement and such other Loan Documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it shall, independently and
without
reliance upon Assignor and based on such documents and information as it
shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; (iv) confirms that
it is
an Eligible Assignee; (v) appoints and authorizes Agent to take such action
as
agent on its behalf and to exercise such powers under the Loan Agreement
as are
delegated to Agent by the terms thereof, together with such powers as are
incidental thereto; (vi) agrees that it will observe and perform all obligations
that are required to be performed by it as a “Lender” under the Loan Documents;
and (vii) represents and warrants that the assignment evidenced hereby will
not
result in a non-exempt “prohibited transaction” under Section 406 of
ERISA.
4. Assignee
acknowledges and agrees that it will not sell or otherwise dispose of the
Assigned Interest or any portion thereof, or grant any participation therein,
in
a manner which, or take any action in connection therewith which, would violate
the terms of any Loan Documents.
5. This
Agreement and all rights and obligations shall be interpreted in accordance
with
and governed by the laws of the State of ________________. If any provision
hereof would be invalid under Applicable Law, then such provision shall be
deemed to be modified to the extent necessary to render it valid while most
nearly preserving its original intent; no provision hereof shall be affected
by
another provision’s being held invalid.
6. Each
notice or other communication hereunder shall be in writing, shall be sent
by
messenger, by telecopy or facsimile transmission or by first-class mail,
shall
be deemed given when sent and shall be sent as follows:
(a) If
to
Assignee, to the following address (or to such other address as Assignee
may
designate from time to time):
(b) If
to
Assignor, to the following address (or to such other address as Assignor
may
designate from time to time):
Payments
hereunder shall be made by wire transfer of immediately available Dollars
as
follows:
If
to
Assignee, to the following account (or to such other account as Assignee
may
designate from time to time):
ABA
No._______________________
Account
No.____________________
Reference:
_____________________
88
If
to
Assignor, to the following account (or to such other account as Assignor
may
designate from time to time):
ABA
No._______________________
Account
No.____________________
Reference:
_____________________
IN
WITNESS WHEREOF,
this
Assignment and Acceptance is executed as of _____________.
(“Assignee”)
By___________________________________
Title:
(“Assignor”)
By___________________________________
Title:
89
EXHIBIT
B
to
ASSIGNMENT
NOTICE
Reference
is made to (i) the Loan and Security Agreement dated as of March __, 2006,
as
amended (“Loan
Agreement”),
among MODTECH
HOLDINGS, INC., a Delaware corporation (“Borrower
Agent”)
and
these Subsidiaries of Borrower Agent parties thereto (individually, a
“Borrower”
and
collectively “Borrowers”),
BANK
OF AMERICA, N.A.,
as
agent (“Agent”)
for
the financial institutions from time to time party to the Loan Agreement
(“Lenders”),
and
such Lenders; and (ii) the Assignment and Acceptance dated as of ____________,
20__ (“Assignment
Agreement”)
between __________________ (“Assignor”)
and
____________________ (“Assignee”).
Terms
are used herein as defined in the Loan Agreement.
Assignor
hereby notifies Borrowers and Agent of Assignor’s intent to assign to Assignee
pursuant to the Assignment Agreement (a) a principal amount of $________ of
Assignor’s outstanding Revolver Loans and $___________ of Assignor’s
participations in LC Obligations, and (b) the amount of $__________ of
Assignor’s Revolver Commitment (which represents (____%) of the total Revolver
Commitments) (the foregoing items being, collectively, the “Assigned
Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest. This Agreement shall be effective as of the date (“Effective
Date”)
indicated below, provided this Assignment Notice is executed by Assignor,
Assignee, Agent and Borrower Agent, if applicable. Pursuant to the Assignment
Agreement, Assignee has expressly assumed all of Assignor’s obligations under
the Loan Agreement to the extent of the Assigned Interest, as of the Effective
Date.
For
purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver Commitment
to be reduced by $_________, and Assignee’s Revolver Commitment to be increased
by $_________.
The
address of Assignee to which notices and information are to be sent under
the
terms of the Loan Agreement is:
The
address of Assignee to which payments are to be sent under the terms of the
Loan
Agreement is shown in the Assignment and Acceptance.
This
Notice is being delivered to Borrowers and Agent pursuant to Section
13.3
of the
Loan Agreement. Please acknowledge your acceptance of this Notice by executing
and returning to Assignee and Assignor a copy of this Notice.
90
IN
WITNESS WHEREOF,
this
Assignment Notice is executed as of _____________.
(“Assignee”)
By___________________________________
Title:
(“Assignor”)
By___________________________________
Title:
ACKNOWLEDGED
AND AGREED,
AS
OF THE
DATE SET FORTH ABOVE:
BORROWER
AGENT:*
MODTECH
HOLDINGS, INC.
By_______________________________
Title:
4. |
No
signature required if Assignee is a Lender, U.S.-based Affiliate
of a
Lender or Approved Fund, or if an Event of Default
exists.
|
BANK
OF AMERICA, N.A.,
as
Agent
By_______________________________
Title:
91
SCHEDULE
1.1
to
COMMITMENTS
OF LENDERS
Lender
|
Revolver
Commitment
|
Total
Commitments
|
Bank
of America, N.A.
|
$25,000,000
|
$25,000,000
|
|
|
|
|
|
|
|
|
|
92
SCHEDULE
8.5
to
DEPOSIT
ACCOUNTS
Depository
Bank
|
Type
of Account
|
Account
Number
|
Union
Bank of California
|
Concentration
|
2100703044
|
Union
Bank of California
|
Payroll
|
2100703052
|
Union
Bank of California
|
Checking
|
9080009213
|
Bank
of America
|
Concentration
|
1496202541
|
Bank
of America
|
Payroll/taxes
|
1496002542
|
93
SCHEDULE
8.6.1
to
BUSINESS
LOCATIONS
1.
|
Borrowers
currently have the following business locations, and no
others:
|
Chief
Executive Office: 0000
Xxxxxxx Xxxxxx, Xxxxxx, XX 00000
Other
Locations: 000 Xxxxx Xxxx., Xxxx Xxxx, XX. 00000; 0000 X. Xxxxxxx, Xxxxxxx,
XX
00000; 0000 Xxxxxxxxxx Xxxx Xx., Xxxxx Xxxx, XX 00000; 000X
Xxxxx Xxxxxx, Xxxxxxxx, XX 00000
2.
|
Borrowers
maintain their books and records relating to Accounts and General
Intangibles at: 0000 Xxxxxxx Xxxxxx, Xxxxxx, XX
00000
|
3.
|
Borrowers
have had no office, place of business or agent for process located
in any
county other than as set forth above, except:
N/A
|
4.
|
Each
Subsidiary currently has the following business locations, and no
others:
|
Chief
Executive Office: N/A
Other
Locations: N/A
5.
|
Each
Subsidiary maintains its books and records relating to Accounts and
General Intangibles at: N/A; all dormant; no assets or books and
records
|
6.
|
Each
Subsidiary has had no office, place of business or agent for process
located in any county other than as set forth above, except:
N/A
|
7.
|
The
following bailees, warehouseman, similar parties and consignees hold
inventory of a Borrower or one of its Subsidiaries:
N/A
|
Name
and Address of Party
|
Nature
of
Relationship
|
Amount
of Inventory
|
Owner
of Inventory
|
94
SCHEDULE
9.1.4
to
Loan
and
Security Agreement
NAMES
AND CAPITAL STRUCTURE
1.
|
The
corporate names, jurisdictions of incorporation, and authorized and
issued
Equity Interests of each Borrower and Subsidiary are as
follows:
|
Name
|
Jurisdiction
|
Number
and Class
of
Authorized Shares
|
Number
and Class
of
Issued Shares
|
Innovative
Modular Structures, Inc.
|
Florida
|
2,000
|
1,000
|
Coastal
Modular Buildings, Inc.
|
Delaware
|
100
|
100
|
Trac
Modular Manufacturing, Inc.
|
Arizona
|
50,000
|
5,000
|
Xxxxxx
Acquisition Corp.
|
Delaware
|
100
|
0
|
Modtech
Merger Corp.
|
Delaware
|
100
|
0
|
Innovative
and Trac Modular have had their corporate charters either suspended
or
revoked due to the failure to pay the annual minimum franchise tax.
Both
Xxxxxx Acquisition Corp and Modtech Merger Corp. were formed to be
used in
connection with a proposed merger with Xxxxxx Building Systems, Inc.
that
was to take place in 1999- 2000, but did not occur. All of the
subsidiaries are inactive and have no assets, operations or income.
|
2.
|
The
record holders of Equity Interests of each Borrower and Subsidiary
are as
follows: Borrower is a publicly traded company with approximately
66
record shareholders. Modtech Holdings, Inc. owns all of the outstanding
shares of common stock of Innovative Modular Structures, Inc. and
Coastal
Modular Buildings, Inc. It owns 4,000 shares of the outstanding common
stock of Trac Modular Manufacturing, Inc. Xxxxxxx Xxxxxxx, Xx. and
Xxxxxxxxx Xxxx own 400 and 600 shares, respectively, of Trac Modular
Manufacturing, Inc.
|
Name
|
Class
of Stock
|
Number
of Shares
|
Record
Owner
|
95
3.
|
All
agreements binding on holders of Equity Interests of Borrowers and
Subsidiaries with respect to such interests are as follows:
N/A
|
4.
|
The
name of each Affiliate of a Borrower and the nature of the affiliation
are
as follows: N/A
|
5.
|
A
total of approximately 22 individuals and institutions hold warrants
to
acquire 1,460,268 shares of common stock of Modtech Holdings, Inc.
The
warrants contain customary anti-dilution provisions which, if triggered,
will increase the number of shares that can be purchased upon exercise
of
the warrants.
|
6.
|
Officers,
directors and employees of Modtech Holdings, Inc. hold options issued
pursuant to the company's stock option plans which as of March 1,
2006 are
exercisable, in the aggregate, for 1,373,300shares of the company's
common
stock.
|
96
SCHEDULE
9.1.5
to
Loan
and
Security Agreement
FORMER
NAMES AND COMPANIES
1.
|
Each
Borrower’s and Subsidiary’s correct corporate name, as registered with the
Secretary of State of its state of incorporation, is shown on Schedule
9.1.4.
|
2.
|
In
the conduct of their businesses during five years preceding the Closing
Date, Borrowers and Subsidiaries have used the following
names:
|
Entity
|
Fictitious,
Trade or Other Name
|
Modtech
Holdings, Inc.
|
Modtech
|
Modtech
Holdings, Inc.
|
United
Modular
|
Modtech
Holdings, Inc.
|
Modtech
Inc.
|
Modtech
Holdings, Inc.
|
United
Modular Technology
|
Modtech
Holdings, Inc.
|
Modcrete
|
Modtech
Holdings, Inc.
|
Modtech
Telecom
|
Modtech
Holdings, Inc.
|
Coastal
Modular Buildings
|
Modtech
Holdings, Inc.
|
Innovative
Modular Structures
|
Modtech
Holdings, Inc.
|
Office
Master of Texas
|
Modtech
Holdings, Inc.
|
SPI
Holdings
|
SPI
Manufacturing Inc.
|
Rosewood
Enterprises
|
Modtech
Holdings, Inc.
|
Rancho
|
Modtech
Holdings, Inc.
|
Trac
|
Modtech
Holdings, Inc.
|
Trac
Modular Manufacturing
|
Modtech
Holdings, Inc.
|
Arizona
Millwork
|
Arizona
Millwork Inc.
|
Rosewood
Installation Services
|
Arizona
Millwork Inc.
|
Rosewood
Enterprises, The Shed Shop
|
Modtech
Holdings, Inc.
|
Xxxxxx
Structures Co., Inc. of California
|
Modtech
Inc.
|
Del
Tech
|
Ronfran
Inc.
|
Standard
Pacific Industries
|
Office
Master of Texas, Inc., Coastal Modular Buildings, Inc., Innovative Modular
Structures, Inc., and Trac Modular Manufacturing, Inc. and Rosewood Enterprises,
Inc., SPI Holdings, Inc. were at one time operating subsidiaries of Modtech
Holdings, Inc. All such subsidiaries have either been merged with and into
Modtech Holdings, Inc. dissolved or had their corporate charters suspended,
revoked or declared inactive for failure to pay the annual minimum franchise
tax.
3.
|
In
the five years preceding the Closing Date, no Borrower or Subsidiary
has
been the surviving corporation of a merger or combination,
except:
|
Modtech
Holdings, Inc.
4.
|
In
the five years preceding the Closing Date, no Borrower or Subsidiary
has
acquired any substantial part of the assets of any Person, except:
N/A
|
97
SCHEDULE
9.1.8
to
Loan
and
Security Agreement
LOSSES
Modtech
Holdings, Inc. incurred a net loss of $9.0 million for the 3-month period ended
December 31, 2005 and a net loss of $21.1 million for 12-month period ended
December 31, 2005.
98
SCHEDULE
9.1.10
to
Loan
and
Security Agreement
TAXES
Innovative
Modular Structures, Inc. and Trac Modular Manufacturing, Inc. have not filed
federal or state tax returns in years and have not paid any taxes, including,
without limitation, the minimum annual franchise tax in years. The corporations
have not have any operations or income during the period they have not paid
taxes or filed returns.
99
SCHEDULE
9.1.12
to
Loan
and
Security Agreement
PATENTS,
TRADEMARKS, COPYRIGHTS AND LICENSES
1.
|
Borrowers’
and Subsidiaries’ patents: N/A
|
Patent
|
Owner
|
Status
in
Patent
Office
|
Federal
Registration
Number
|
Registration
Date
|
2.
|
Borrowers’
and Subsidiaries’ trademarks:
|
Trademark
|
Owner
|
Status
in
Trademark
Office
|
Federal
Registration
Number
|
Registration
Date
|
Modcrete
|
Modtech
Holdings, Inc.
|
Registered,
possibly abandoned
|
78208029
|
1/28/03
|
Modtech
Telecom
|
Modtech
Holdings, Inc.
|
Registered,
possibly abandoned
|
76371867
|
2/14/02
|
United
Modular
|
Modtech
Holdings, Inc.
|
Registered,
possibly abandoned
|
2598642
|
7/23/02
|
Modtech
|
Modtech
Holdings, Inc.
|
Registered
|
2699855
|
3/25/03
|
United
Modular Technology
|
Modtech
Holdings, Inc.
|
Registered,
possibly abandoned
|
75866601
|
12/7/99
|
The
Right Space, At the Right Time, For the Right Price
|
Modtech
Holdings, Inc.
|
Registered
|
78680057
|
7/27/05
|
Modtech
Holdings, Inc. currently only uses the trademarks "Modtech" and "The Right
Space, At the Right Time, For the Right Price" in its business. The other marks
are no longer in use.
3.
|
Borrowers’
and Subsidiaries’ copyrights: N/A
|
Copyrights
|
Owner
|
Status
in
Copyright
Office
|
Federal
Registration
Number
|
Registration
Date
|
Architectural
Plans & Drawings for 2 story relocatable building 30' x
33'
|
Modtech
Holdings, Inc.
|
Registered
|
VA1160334
|
September
26, 2002
|
Architectural
Plans & Drawings for 2 story relocatable building 48' x
40'
|
Modtech
Holdings, Inc.
|
Registered
|
VA1149006
|
September
25, 2002
|
Architectural
Plans & Drawings for relocatable classroom building 30' x 32'
expandable to 270' x 32'
|
Modtech
Holdings, Inc.
|
Registered
|
VA1149005
|
September
25, 2002
|
Architectural
Plans & Drawings for relocatable classroom building 24' x 40'
expandable to 144'' x 40'
|
Modtech
Holdings, Inc.
|
Registered
|
VA1147591
|
September
23, 2002
|
Architectural
Plans & Drawings for relocatable building 24' x 40''
|
Modtech,
Inc. (predecessor to Modtech Holdings, Inc.)
|
Registered
|
VA902842
|
July
20, 1998
|
Architectural
Plans & Drawings for relocatable classroom building 24' x 40'
|
Modtech,
Inc. (predecessor to Modtech Holdings, Inc.)
|
Registered
|
VA902841
|
July
20, 1998
|
Architectural
Plans & Drawings for relocatable building for model 24' x 40'
|
Modtech,
Inc. (predecessor to Modtech Holdings, Inc.)
|
Registered
|
VA880041
|
April
15, 1998
|
100
4.
Borrowers’ and Subsidiaries’ licenses (other than routine business licenses,
authorizing them to transact business in local jurisdictions): N/A
Licensor
|
Description
of License
|
Term
of License
|
Royalties
Payable
|
None
|
|||
101
SCHEDULE
9.1.15
to
Loan
and
Security Agreement
ENVIRONMENTAL
MATTERS
Borrower's
leased facility at 0000 Xxxx Xxxxxxx, Xxxxxxx, Arizona is located within a
25
square mile are listed by the Arizona Department of Environmental Quality on
the
state priority list for contaminated sites. According to a 1998 environmental
site assessment report pertaining to the facility, neither Borrower nor the
prior operators or owners of the property have been identified as potentially
responsible parties at the site. The report identified no historical activity
on
the property that was likely to have been a source of the contaminants at the
site.
One
of
Borrower's former subsidiaries, Innovative Modular, Inc. owned property in
Florida. The property was sold in 2004 and the buyer was advised of the
requirement by Florida Department of Environmental Protection that a Declaration
of Restrictive Covenant be recorded against the property as a result of prior
contamination. The contamination was the result of crushed asphalt being used
as
fill in the parking lot. The restriction which was requested in 2001, but never
filed prior to the sale, prohibited residential use of the
property.
Innovative
has since ceased all operations, currently has no known assets or liabilities
and has been suspended in Florida for failure to pay the minimum annual
franchise tax.
102
SCHEDULE
9.1.16
to
Loan
and
Security Agreement
RESTRICTIVE
AGREEMENTS
N/A
Entity
|
Agreement
|
Restrictive
Provisions
|
103
SCHEDULE
9.1.17
to
Loan
and
Security Agreement
LITIGATION
1.
|
Proceedings
and investigations pending against Borrowers or
Subsidiaries:
|
The
following is a list of all proceedings and investigations currently pending
against Borrower. With the exception of the TRICO PIPES case described below,
Borrower does not believe that an adverse decision in any of these cases is
reasonably likely to have a Material Adverse Effect.
1.1 Title
of
Action: BAYSIDE
SOLUTIONS, INC.
v.
MODTECH
HOLDINGS, INC., LIBERTY UNION HIGH SCHOOL DISTRICT, LIBERTY MUTUAL INSURANCE
COMPANY.
Nature
of
Action: The plaintiff alleges that Modtech failed to pay Bayside Solutions
$300,000 for the temporary labor staff Bayside provided on the Heritage High
School project.
Complaining
Parties: Bayside Solutions, Inc., a California corporation.
Jurisdictional
or Tribunal: Contra Costa County Superior Court
Case
#CO6
00636
1.2 Title
of
Action: TRICO PIPES, XXXX XXXXXX and XXXXX XXXX on behalf of themselves and
all
other similarly situated persons; and PLUMBERS AND STEAMFITTERS LOCAL UNION
NO.
159 v. MODTECH HOLDINGS, INC; BAYSIDE SOLUTIONS, INC; and DOES 1 through 50,
inclusive.
Nature
of
Action: Lawsuit
Plaintiffs
allege that they worked on a public works project and that Bayside, a temporary
labor service used by Modtech, did not pay them properly and violated the wage
and hour laws for public work projects. These individuals worked on the Liberty
Union (Heritage project); plaintiffs further allege that local apprentices
were
not used on the same project and that others employed by Modtech on various
public works projects are similarly situated and have not been paid properly.
This has been filed as a Class Action suit, but has not yet been certified
as a
Class Action.
Complaining
Parties: TRICO PIPES, XXXX XXXXXX and XXXXX XXXX, and PLUMBERS AND STEAMFITTERS
LOCAL UNION NO. 159.
Jurisdictional
or Tribunal: Superior Court, County of Alameda
Case
No.
RG 06252511
104
1.3
Title
of Action: XXXXXXXXX XXXXX, XXXXXX XXXXX, XXXXX XXXXXXX on behalf of themselves
and in the interest of the general public, v. XXXXXXX XXXXXXXX, INC., dba LC
CONTRACTORS, MODTECH HOLDINGS, INC., dba MODTECH and DOES 1 through 50
inclusive.
Nature
of
Action: Lawsuit
Plaintiffs
allege that they provided labor to Xxxxxxxx on various public works projects
where Xxxxxxxx was acting as a sub to Modtech. Plaintiffs claim that they were
not paid a prevailing wage by Xxxxxxxx and are seeking to recover damages from
both Xxxxxxxx and Modtech. Plaintiffs have yet to state the amount of damages
they are claiming.
Complaining
Parties: XXXXXXXXX XXXXX, XXXXXX XXXXX, and XXXXX GOLAVIZ
Jurisdictional
or Tribunal: Superior Court of California, County of Sacramento.
Case
No.
05AS00514
1.4 Title
of
Action: TNT Construction Services v. Modtech Holdings, Inc. aka Modtech, Inc.,
and Does 1 through 100, inclusive.
Nature
of
Action: Lawsuit
Plaintiff
is a subcontractor to Modtech Holdings, Inc. Plaintiff alleges that Modtech
breached its contract with TNT by having others complete its scope of work
and
that TNT was not paid for change order work it completed.
Complaining
Parties: TNT Construction Services
Jurisdictional
or Tribunal: Riverside County Superior Court
Case
No.
XXX000000
1.5 Title
of
Action: Contractors & Employees 401k Plan as sponsored by Xxxxxxx Xxxxxxxx,
Inc.
Nature
of
Action: Investigation
The
US
Department of Labor is investigating to determine if Xxxxxxx Xxxxxxxx made
appropriate contributions to the required pension plans.
Complaining
Parties: Unknown
Jurisdictional
or Tribunal: Investigative authority of the Secretary of Labor.
105
1.6 Title
of
Action: XXXXXX X. XXXXXX MECHANICAL EQUIPMENT CORP. x. XXXXXX MECHANICAL, INC.,
a business entity, form unknown, purporting to be a California corporation;
MODTECH HOLDINGS, INC., a business entity, form unknown, purporting to be a
Delaware corporation; LIBERTY MUTUAL INSURANCE COMPANY, a business entity,
form
unknown, purporting to be a Massachusetts corporation; LIBERTY UNION HIGH SCHOOL
DISTRICT, a public entity; and DOES 1-50, inclusive.
Nature
of
Action: Lawsuit
Being
sued by Plaintiff, XXXXXX X. XXXXXX MECHANICAL EQUIPMENT CORP., a California
corporation , for breach of contract; monies due; quantum meruit; account
stated; action on payment bond, foreclosure of stop notice by Xxxxxx Mechanical,
Inc. a subcontractor for Modtech Holdings, Inc.
Complaining
Parties: XXXXXX X. XXXXXX MECHANICAL EQUIPMENT CORP.
Jurisdictional
or Tribunal: Xxxxxx Xxxxx Xxxxxx Xxxxxxxx Xxxxx
Xxxx
Xx.
X00-00000
1.7 Title
of
Action: DIRECT DIGITAL CONTROLS x. XXXXXX MECHANICAL, INC.; MODTECH, INC.;
LIBERTY UNION HIGH SCHOOL DISTRICT; LIBERTY MUTUAL INSURANCE COMPANUY; and
DOES
1 through 10, inclusive.
Nature
of
Action: Lawsuit
Being
sued by Plaintiff Direct Digital Controls, Inc., for complaint for damages
for
breach of contract; to enforce stop notice and for recovery on Contractor’s
payment bond against Xxxxxx Mechanical, a subcontractor for Modtech Holdings,
Inc.
Complaining
Parties: DIRECT DIGITAL CONTROLS, INC.
Jurisdictional
or Tribunal: Contra Costa County Superior Court
Case
No.
C06-00149
2.
|
The
only threatened proceedings or investigations of which any Borrower
or
Subsidiary is aware are as follows:
N/A
|
106
SCHEDULE
9.1.19
to
Loan
and
Security Agreement
PENSION
PLANS
N/A
1.
|
Borrowers
and Subsidiaries have the following Multiemployer Plans:
N/A
|
Party
|
Type
of Multiemployer Plan
|
2.
|
Borrowers
and Subsidiaries have the following Foreign Plans:
N/A
|
Party
|
Description
of Plan
|
107
SCHEDULE
9.1.21
to
Loan
and
Security Agreement
LABOR
CONTRACTS
N/A
Borrowers
and Subsidiaries are party to the following collective bargaining agreements,
management agreements and consulting agreements:
N/A
Parties
|
Type
of Agreement
|
Term
of Agreement
|
108
SCHEDULE
10.2.2
to
Loan
and
Security Agreement
EXISTING
LIENS
The
following parties have Liens against some or all of Borrower's
assets:
Citicorp
Vendor Finance, Inc. (equipment lease)
Amphora
Limited (all assets)
U.S.
National Bank Association (certificate of deposit)
Fortress
Credit Corp. (all assets)
109
SCHEDULE
10.2.17
to
Loan
and
Security Agreement
EXISTING
AFFILIATE TRANSACTIONS
N/A
110