1
EXHIBIT 10.16
--------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of August 15, 2000
among
UNION-TRANSPORT CORPORATION,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and a Lender
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT.............................................1
1.1 Credit Facilities.............................................1
1.2 Letters of Credit.............................................4
1.3 Prepayments...................................................4
1.4 Use of Proceeds...............................................6
1.5 Interest and Applicable Margins...............................6
1.6 Eligible Accounts.............................................8
1.7 Cash Management System.......................................10
1.8 Fees.........................................................10
1.9 Receipt of Payments..........................................11
1.10 Application and Allocation of Payments.......................11
1.11 Loan Account and Accounting..................................12
1.12 Indemnity....................................................12
1.13 Access.......................................................13
1.14 Taxes........................................................14
1.15 Capital Adequacy; Increased Costs; Illegality................14
1.16 Single Loan..................................................16
2. CONDITIONS PRECEDENT..................................................16
2.1 Conditions to the Initial Loans..............................16
2.2 Further Conditions to Each Loan..............................17
3. REPRESENTATIONS AND WARRANTIES........................................18
3.1 Corporate Existence; Compliance with Law.....................18
3.2 Executive Offices; Collateral Locations;
Identification Numbers.......................................18
3.3 Corporate Power, Authorization, Enforceable
Obligations..................................................18
3.4 Financial Statements and Projections.........................19
3.5 Material Adverse Effect......................................19
3.6 Ownership of Property; Liens.................................20
3.7 Labor Matters................................................20
3.8 Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness.......................................20
3.9 Government Regulation........................................21
3.10 Margin Regulations...........................................21
3.11 Taxes........................................................21
3.12 ERISA........................................................22
3.13 No Litigation................................................22
3.14 Brokers......................................................23
3.15 Intellectual Property........................................23
3.16 Full Disclosure..............................................23
3.17 Environmental Matters........................................23
3.18 Insurance....................................................24
i
3
3.19 Deposit and Disbursement Accounts............................24
3.20 Government Contracts.........................................24
3.21 Customer and Trade Relations.................................24
3.22 Agreements and Other Documents...............................24
3.23 Solvency.....................................................25
4. FINANCIAL STATEMENTS AND INFORMATION..................................25
4.1 Reports and Notices..........................................25
4.2 Communication with Accountants...............................25
5. AFFIRMATIVE COVENANTS.................................................25
5.1 Maintenance of Existence and Conduct of Business.............25
5.2 Payment of Charges...........................................26
5.3 Books and Records............................................26
5.4 Insurance; Damage to or Destruction of Collateral;
Condemnation.................................................26
5.5 Compliance with Laws.........................................28
5.6 Supplemental Disclosure......................................28
5.7 Intellectual Property........................................29
5.8 Environmental Matters........................................29
5.9 Landlords' and Mortgagees' Agreements, Real Estate
Purchases....................................................29
5.10 Further Assurances...........................................30
6. NEGATIVE COVENANTS....................................................30
6.1 Mergers, Subsidiaries, Etc...................................30
6.2 Investments; Loans and Advances..............................30
6.3 Indebtedness.................................................31
6.4 Employee Loans and Affiliate Transactions....................32
6.5 Capital Structure and Business...............................32
6.6 Guaranteed Indebtedness......................................32
6.7 Liens........................................................33
6.8 Sale of Stock and Assets.....................................33
6.9 ERISA........................................................33
6.10 Financial Covenants..........................................33
6.11 Hazardous Materials..........................................33
6.12 Sale-Leasebacks..............................................33
6.13 Cancellation of Indebtedness.................................33
6.14 Restricted Payments..........................................34
6.15 Change of Corporate Name or Location; Change of
Fiscal Year..................................................34
6.16 No Impairment of Intercompany Transfers......................34
6.17 No Speculative Transactions..................................34
6.18 Leases; Real Estate Purchases................................34
7. TERM..................................................................35
7.1 Termination..................................................35
ii
4
7.2 Survival of Obligations Upon Termination of
Financing Arrangements.......................................35
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................35
8.1 Events of Default............................................35
8.2 Remedies.....................................................37
8.3 Waivers by Credit Parties....................................38
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...................38
9.1 Assignment and Participations................................38
9.2 Appointment of Agent.........................................41
9.3 Agent's Reliance, Etc........................................41
9.4 GE Capital and Affiliates....................................42
9.5 Lender Credit Decision.......................................42
9.6 Indemnification..............................................42
9.7 Successor Agent..............................................43
9.8 Setoff and Sharing of Payments...............................43
9.9 Advances; Payments; Non-Funding Lenders;
Information; Actions in Concert..............................44
10. SUCCESSORS AND ASSIGNS................................................46
11. MISCELLANEOUS.........................................................46
11.1 Complete Agreement; Modification of Agreement................46
11.2 Amendments and Waivers.......................................46
11.3 Fees and Expenses............................................48
11.4 No Waiver....................................................49
11.5 Remedies.....................................................50
11.6 Severability.................................................50
11.7 Conflict of Terms............................................50
11.8 Confidentiality..............................................50
11.9 GOVERNING LAW................................................50
11.10 Notices......................................................51
11.11 Section Titles...............................................51
11.12 Counterparts.................................................52
11.13 WAIVER OF JURY TRIAL.........................................52
11.14 Press Releases and Related Matters...........................52
11.15 Reinstatement................................................52
11.16 Advice of Counsel............................................53
11.17 No Strict Construction.......................................53
iii
5
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.7) - Cash Management System
Annex D (Section 2.1(a)) - Schedule of Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 1.1(a)/9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (Annex A) - Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Schedule 1.1 - Agent Representative
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Corporate Existence
Disclosure Schedule 3.2 - Executive Offices; Collateral Locations; FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures and Affiliates; Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.6 - Guaranteed Indebtedness
Disclosure Schedule 6.7 - Existing Liens
iv
6
THIS CREDIT AGREEMENT ("Agreement") is entered into as of
August 15, 2000, 2000, by and among UNION-TRANSPORT CORPORATION, a New York
corporation ("Borrower"); the other Credit Parties signatory hereto; GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE Capital"), for itself, as a Lender, and as Agent for Lenders; and
the other Lenders signatory hereto from time to time.
RECITALS
A. Borrower has requested that Lenders extend a revolving
credit facility to Borrower of up to Twenty-Nine Million Dollars ($29,000,000)
in the aggregate for the purpose of refinancing certain indebtedness of Borrower
and the other Credit Parties and to provide (i) working capital financing for
Borrower and the other Credit Parties, (ii) funds for other general corporate
purposes of Borrower and the other Credit Parties, and (iii) funds for other
purposes permitted hereunder; and for these purposes, Lenders are willing to
make certain loans and other extensions of credit to Borrower of up to such
amount upon the terms and conditions set forth herein.
B. Borrower has agreed to secure all of its obligations under
the Loan Documents by granting to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all of its existing and after-acquired
personal and real property.
C. Each Credit Party (other than Borrower) is willing to
guarantee of all of the obligations of Borrower and the other Credit Parties to
Agent and Lenders under the Loan Documents and to grant to Agent, for the
benefit of Agent and Lenders, a security interest in and lien upon all of its
existing and after-acquired personal and real property to secure such guaranty.
D. Capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All exhibits, schedules, annexes and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference and, taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each
Lender agrees to make available to Borrower from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a "Revolving
Credit Advance"). The Pro Rata Share of the Revolving Loan of any Lender shall
not at any time exceed its separate Commitment. The obligations of each
1
7
Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 1.1(a); provided, that the amount of any Revolving Credit
Advance to be made at any time made under this Section 1.1(a) shall not exceed
Borrowing Availability at such time. Borrowing Availability may be reduced by
Reserves imposed by Agent in its reasonable credit judgment. Each Revolving
Credit Advance shall be made on notice by Borrower to one of the representatives
of Agent identified in Disclosure Schedule 1.1 at the address specified therein.
Any such notice must be given no later than (1) 11:00 a.m. (New York time) on
the Business Day of the proposed Revolving Credit Advance, in the case of an
Index Rate Loan, or (2) 11:00 a.m. (New York time) on the date that is three
Business Days prior to the proposed Revolving Credit Advance, in the case of a
LIBOR Loan. Each such notice (a "Notice of Revolving Credit Advance") must be
given in writing (by telecopy or overnight courier) substantially in the form of
Exhibit 1.1(a)(i), and shall include the information required in such Exhibit
and such other information as may be required by Agent. If Borrower desires to
have the Revolving Credit Advances bear interest by reference to a LIBOR Rate,
it must comply with Section 1.5(e).
(ii) Borrower shall execute and deliver to each
Lender a note to evidence the Commitment of such Lender, which note shall be in
the principal amount of the Commitment of the applicable Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each a
"Revolving Note" and collectively the "Revolving Notes"). Each Revolving Note
shall represent the obligation of Borrower to pay the amount of each Lender's
Commitment or, if less, such Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances made to Borrower together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of the
Revolving Loan and all other non-contingent Obligations shall be immediately due
and payable in full in immediately available funds on the Commitment Termination
Date.
(iii) Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower, Agent may (but shall have
absolutely no obligation to), in its discretion, make Revolving Credit Advances
to Borrower on behalf of Lenders in excess of the Borrowing Base (less the Swing
Line Loan) (any such excess Revolving Credit Advances are herein referred to
collectively as "Overadvances"); provided, that (A) no such event or occurrence
shall cause or constitute a waiver of Agent's, Swing Line Lender's or Lenders'
right to refuse to make any further Overadvances, Swing Line Advances or
Revolving Credit Advances, or incur any Letter of Credit Obligations, as the
case may be, at any time that an Overadvance exists, and (B) no Overadvance
shall result in a Default or Event of Default based upon Borrower's failure to
comply with Section 1.3(b)(i) for so long as Agent permits such Overadvance to
be outstanding, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the conditions to lending set forth
in Section 2 have not been met. All Overadvances shall constitute Index Rate
Loans, shall bear interest at the Default Rate and shall be payable on demand.
Except as otherwise provided in Section 1.10(b), the authority of Agent to make
Overadvances is limited to an aggregate amount not to exceed $1,000,000 at any
time, shall not cause the Revolving Loan to exceed the Maximum Amount, and may
be revoked prospectively by a written notice to Agent signed by Requisite
Lenders.
(b) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon
Agent's receipt of any Notice of Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line
2
8
Lender may, in its discretion, make available from time to time until the
Commitment Termination Date advances (each, a "Swing Line Advance") in
accordance with any such notice. The provisions of this Section 1.1(b) shall not
relieve Lenders of their obligations to make Revolving Credit Advances under
Section 1.1(a); provided, that if Swing Line Lender makes a Swing Line Advance
pursuant to any such notice, such Swing Line Advance shall be in lieu of any
Revolving Credit Advance that otherwise may be made by Revolving Credit Lenders
pursuant to such notice. The aggregate amount of Swing Line Advances outstanding
shall not exceed at any time the lesser of (1) the Swing Line Commitment and (A)
the lesser of (1) the Maximum Amount and (2) (except for Overadvances) the
Borrowing Base, in each case less the outstanding balance of the Revolving Loan
at such time ("Swing Line Availability"). Until the Commitment Termination Date,
Borrower may from time to time borrow, repay and reborrow under this Section
1.1(b). Each Swing Line Advance shall be made pursuant to a Notice of Revolving
Credit Advance delivered by Borrower to Agent in accordance with Section 1.1(a).
Any such notice must be given no later than 11:00 a.m. (New York time) on the
Business Day of the proposed Swing Line Advance. Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. Unless the Swing Line Lender has received
at least one Business Day's prior written notice from Requisite Lenders
instructing it not to make any Swing Line Advance, Swing Line Lender shall,
notwithstanding the failure of any condition precedent set forth in Section 2.2
(other than the conditions precedent set forth in Sections 2.2(d)-(e)), be
entitled to fund such Swing Line Advance and to have each Lender make Revolving
Credit Advances in accordance with Section 1.1(b)(iii) or purchase participating
interests in accordance with Section 1.1(b)(iv). Borrower shall repay the
aggregate outstanding principal amount of the Swing Line Loan upon demand
therefor by Agent.
(ii) Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. Such note
shall be in the principal amount of the Swing Line Commitment, dated the Closing
Date, and substantially in the form of Exhibit 1.1(b)(ii) (the "Swing Line
Note"). The Swing Line Note shall represent the obligation of Borrower to pay
the amount of the Swing Line Commitment or, if less, the aggregate unpaid
principal amount of all Swing Line Advances made to Borrower together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of the
Swing Line Loan and all other noncontingent Obligations shall be immediately due
and payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from
time to time in its sole and absolute discretion, but no less frequently than
once weekly, shall on behalf of Borrower (and Borrower hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each Lender
(including the Swing Line Lender) to make a Revolving Credit Advance to Borrower
(which shall be an Index Rate Loan) in an amount equal to such Lender's Pro Rata
Share of the principal amount of the Swing Line Loan (the "Refunded Swing Line
Loan") outstanding on the date such notice is given. Unless any of the events
described in Sections 8.1(h) or 8.1(i) has occurred (in which event the
procedures of Section 1.1(b)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Lender shall disburse directly to Agent
its Pro Rata Share of a Revolving Credit Advance on behalf of the Swing Line
Lender prior to 3:00 p.m. (New York time) in immediately available funds on the
Business Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Advances shall be immediately paid to the Swing Line Lender and
applied to repay the Refunded Swing Line Loan.
3
9
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(b)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(b)(v) below, each Lender shall, on the date such
Revolving Credit Advance was to have been made for the benefit of Borrower,
purchase from the Swing Line Lender an undivided participation interest in the
Swing Line Loan in an amount equal to its Pro Rata Share of such Swing Line
Loan. Upon request, each Lender shall promptly transfer to the Swing Line
Lender, in immediately available funds, the amount of its participation
interest.
(v) Each Lender's obligation to make Revolving Credit
Advances in accordance with Section 1.1(b)(iii) and to purchase participation
interests in accordance with Section 1.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including: (A) any
setoff, counterclaim, recoupment, defense or other right that such Lender may
have against the Swing Line Lender, Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time; or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Lender does not make available to Agent or the Swing Line
Lender, as applicable, the amount required pursuant to Sections 1.1(b)(iii) or
1.1(b)(iv), as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
for each day from the date of non-payment until such amount is paid in full at
the Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.
(c) Reliance on Notices. Agent shall be entitled to rely upon,
and shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering any
such notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary.
1.2 Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower shall have the right to
request, and Lenders agree to incur, or purchase participations in, Letter of
Credit Obligations for the account of Borrower.
1.3 Prepayments.
(a) Voluntary Reductions in Commitment. Borrower may at any
time on at least five days' prior written notice to Agent permanently reduce
(but not terminate) the Commitment; provided, that (i) any such reduction shall
be in a minimum amount of $3,000,000 and integral multiples of $250,000 in
excess of such amount, (ii) the Commitment shall not be reduced to an amount
less than $20,000,000, and (iii) after giving effect to any such reduction,
Borrower complies with Section 1.3(b)(i). In addition, Borrower may at any time
on at least ten days' prior written notice to Agent terminate the Commitment;
provided, that upon such termination all Loans and other Obligations shall be
immediately due and payable in full and all Letter of Credit Obligations shall
be cash collateralized or otherwise satisfied in accordance with Annex B. Any
such voluntary reduction or termination of the Commitment must be accompanied by
payment of the Fee required by Section 1.8(d), plus the payment of any LIBOR
funding breakage costs in accordance with Section 1.12(b). Upon any such
reduction or termination of the Commitment, Borrower's right to
4
10
request Revolving Credit Advances, or request that Letter of Credit Obligations
be incurred on its behalf, or request Swing Line Advances, shall simultaneously
be permanently reduced or terminated, as the case may be; provided, that a
permanent reduction of the Commitment shall not require a corresponding pro rata
reduction in the L/C Sublimit.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balance
of the Revolving Loan and the Swing Line Loan exceeds the lesser of (A) the
Maximum Amount and (B) the Borrowing Base, then Borrower shall immediately repay
the aggregate outstanding Revolving Credit Advances to the extent required to
eliminate such excess. If any such excess remains after repayment in full of the
aggregate outstanding Revolving Credit Advances, Borrower shall provide cash
collateral for the Letter of Credit Obligations in the manner set forth in Annex
B to the extent required to eliminate such excess. Notwithstanding the
foregoing, any Overadvance made pursuant to Section 1.1(a)(iii) shall be repaid
only on demand.
(ii) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (excluding proceeds of asset dispositions
permitted by Section 6.8(a)) or any sale of Stock of any Subsidiary of any
Credit Party, Borrower shall prepay the Loans in an amount equal to all such
proceeds net of (A) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable
by Borrower in connection therewith (in each case, paid to non-Affiliates), (B)
transfer taxes, (C) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Encumbrances hereunder), if any, and (D) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith. Any such prepayment shall be applied in accordance with Section
1.3(c).
(iii) If any Credit Party issues Stock, no later than
the Business Day following the date of receipt of the proceeds thereof, Borrower
shall prepay the Loans in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with Section 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by Borrower pursuant to Section 1.3(b)(ii) or (b)(iii) shall be
applied as follows: first, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on the Swing Line Loan; third, to the principal balance of the Swing
Line Loan until the same has been repaid in full; fourth, to interest then due
and payable on the Revolving Credit Advances; fifth, to the outstanding
principal balance of Revolving Credit Advances until the same has been paid in
full; and sixth, to any Letter of Credit Obligations, to provide cash collateral
therefor in the manner set forth in Annex B, until all such Letter of Credit
Obligations have been fully cash collateralized in the manner set forth in Annex
B. Neither the Commitment nor the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments.
(d) Application of Prepayments from Insurance and Condemnation
Proceeds. Prepayments from insurance or condemnation proceeds in accordance with
Sections 5.4(c) and (d), respectively, shall be applied first, to the Swing Line
Loans and second, to the Revolving Credit Advances. Neither the Commitment nor
the Swing Line Loan Commitment shall be permanently reduced by the amount of any
such prepayments.
5
11
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of the
Revolving Loan and the Swing Line Loan solely for the Refinancing (and to pay
any related transaction expenses), for the financing of Borrower's ordinary
working capital, capital expenditure and general corporate needs, for the
repayment of all but $10,656,126 of the Parent Indebtedness, and for the
reduction of the trade accounts payable of all Credit Parties in an aggregate
amount not to exceed $2,500,000. Disclosure Schedule 1.4 contains a description
of Borrower's sources and uses of funds as of the Closing Date, and a funds flow
memorandum detailing how funds from each source are to be transferred to
particular uses.
1.5 Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Revolving Credit Advances, the Index Rate plus
the Applicable Revolver Index Margin per annum or, at any time on or after the
Syndication Date and at the election of Borrower, the applicable LIBOR Rate plus
the Applicable Revolver LIBOR Margin per annum, based on the aggregate Revolving
Credit Advances outstanding from time to time; and (ii) with respect to the
Swing Line Loan, the Index Rate plus the Applicable Revolver Index Margin per
annum.
(b) If any payment of any of the Obligations becomes due and
payable on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such Fees and
interest are payable. The Index Rate is a floating rate that shall be determined
by Agent (i) on the first Business Day immediately prior to the Closing Date for
calculation of interest in the month in which the Closing Date occurs, and (ii)
thereafter on the last Business Day of each calendar month for calculation of
interest for the following month; provided, that after the Syndication Date, the
Index rate shall be determined by Agent for each day, and each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate. Each determination by Agent
of an interest rate and Fees hereunder shall be final, binding and conclusive on
Borrower (absent manifest error).
(d) So long as an Event of Default has occurred and is
continuing under Section 8.1(a), 8.1(h) or 8.1(i), or so long as any other
Default or Event of Default has occurred and is continuing and at the election
of Agent (or upon the written request of Requisite Lenders) confirmed by written
notice from Agent to Borrower, the interest rates applicable to the Loans and
the Letter of Credit Fees shall be increased by 2% per annum above the rates of
interest or the rate of such Fees otherwise applicable hereunder (the "Default
Rate"), and all outstanding Obligations shall
6
12
bear interest at the Default Rate applicable to such Obligations. Interest and
Letter of Credit Fees at the Default Rate shall accrue from the initial date of
such Default or Event of Default until that Default or Event of Default is cured
or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in Section
2.2, Borrower shall have the option at any time on or after the Syndication Date
to (i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii)
convert at any time all or any part of outstanding Loans (other than the Swing
Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to
an Index Rate Loan, subject to payment of LIBOR breakage costs in accordance
with Section 1.12(b) if such conversion is made prior to the expiration of the
LIBOR Period applicable thereto, or (iv) continue all or any portion of any Loan
(other than the Swing Line Loan) as a LIBOR Loan upon the expiration of the
applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan
shall commence on first day after the last day of the LIBOR Period of the Loan
to be continued. Any Loan or group of Loans having the same LIBOR Period to be
made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $2,000,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by 11:00 a.m. (New York time) on the
third Business Day prior to (A) the date of any proposed Advance that is to bear
interest at the LIBOR Rate, (B) the end of each LIBOR Period with respect to any
LIBOR Loans to be continued as such, or (C) the date on which Borrower wishes to
convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower in such election. If no election is received with respect to a LIBOR
Loan by 11:00 a.m. (New York time) on the third Business Day prior to the end of
the LIBOR Period with respect thereto (or if a Default or an Event of Default
has occurred and is continuing or the additional conditions precedent set forth
in Section 2.2 shall not have been satisfied), that LIBOR Loan shall be
converted to an Index Rate Loan at the end of its LIBOR Period. Borrower must
make such election by notice to Agent in writing, by telecopy or overnight
courier. In the case of any conversion or continuation, such election must be
made pursuant to a written notice (a "Notice of Conversion/Continuation") in the
form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, that if at any time thereafter
the rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Agent, on behalf of Lenders,
is equal to the total interest that would have been received had the interest
rate payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such
7
13
excess in the order specified in Section 1.10 and thereafter shall refund any
excess to Borrower or as a court of competent jurisdiction may otherwise order.
1.6 Eligible Accounts. All of the Accounts owned by Borrower (including
Accounts purchased by Borrower under the UT Receivables Purchase Agreement) and
reflected on the most recent Borrowing Base Certificate delivered by Borrower to
Agent shall be "Eligible Accounts" for purposes of this Agreement, except any
Account to which any of the exclusionary criteria set forth below applies. Agent
shall have the right to establish or modify Reserves against Eligible Accounts
from time to time in its reasonable credit judgment. In addition, Agent reserves
the right, at any time and from time to time after the Closing Date, to adjust
any of the criteria set forth below, to establish new criteria and to adjust
advance rates with respect to Eligible Accounts, in its reasonable credit
judgment, subject to the approval of Supermajority Lenders in the case of
adjustments or new criteria or changes in advance rates which have the effect of
making more credit available. Eligible Accounts shall not include any Account of
Borrower:
(a) that does not arise from the sale of goods or the
performance of services by any Credit Party in the ordinary course of its
business;
(b) upon which Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(i) as to which Borrower is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process, or (ii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to any Credit Party's
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer;
(c) to the extent that any defense, counterclaim, setoff or
dispute is asserted as to such Account, but only to the extent of any such
defense, counterclaim, setoff or dispute;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to
Agent in form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or (ii) is subject to
any right, claim, security interest or other interest of any other Person, other
than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any common
officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state,
county or municipality or department, agency or instrumentality thereof unless
Agent, in its sole discretion, has agreed to the contrary in writing and
Borrower, if necessary or desirable, has complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any applicable
state statute, county or municipal law restricting assignment thereof;
8
14
(i) that is the obligation of an Account Debtor located in a
foreign country other than Canada (excluding the province of Newfoundland, the
Northwest Territories and the Territory of Nunavut) unless payment thereof is
assured by a letter of credit assigned and delivered to Agent, reasonably
satisfactory to Agent as to form, amount and issuer;
(j) to the extent any Credit Party is liable for goods sold or
services rendered by the applicable Account Debtor but only to the extent of the
potential offset;
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; provided, that without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the invoice with respect to such Account is not
paid within the earlier of 60 days following its due date or 90 days
following its original invoice date;
(ii) the Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial)
receivership, insolvency relief or other law or laws for the relief of
debtors;
(m) that is the obligation of an Account Debtor if 50% or more
of the Dollar amount of all Accounts owing by such Account Debtor are ineligible
under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties in
the Loan Documents is untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable credit judgment, following prior notice
of such limit by Agent to Borrower;
(r) (i) except as provided in clause (ii) below, to the extent
that such Account, together with all other Accounts owing by the Account Debtor
thereof and its Affiliates (other than GE Power Systems), as of any date of
determination, exceed 5% of all Eligible Accounts, or (ii) with respect to
Accounts for which Xxxxx Xxxxxx or Xxxxxxx-Xxxxx Squibb is the Account Debtor
thereof,
9
15
to the extent that any such Account, together with all other Accounts owing by
such Account Debtor and its Affiliates, as of any date of determination, exceed
10% of all Eligible Accounts;
(s) that is payable in any currency other than Dollars; or
(t) that is otherwise unacceptable to Agent in its reasonable
credit judgment.
1.7 Cash Management System. On or prior to the Closing Date, Borrower
will establish and will maintain until the Termination Date, the cash management
system described in Annex C (the "Cash Management System").
1.8 Fees.
(a) Borrower shall pay to Lender (i) on the Closing Date a
closing fee in the amount of $124,000 (against which shall be credited the
$50,000 fee paid under the commitment letter from GE Capital to Borrower dated
June 29, 2000, and any unused portion of the $37,500 underwriting deposit paid
under the proposal letter from GE Capital Commercial Finance, Inc. to Borrower
dated March 30, 2000), and (ii) on the earlier of (A) first anniversary of the
Closing Date and (B) the Commitment Termination Date, an additional closing fee
in the amount of $50,000.
(b) Borrower shall pay to Lender on the Closing Date and on
each anniversary of the Closing Date occurring prior to the Commitment
Termination, a fully-earned and non-refundable collateral monitoring fee in the
amount of $18,000.
(c) As additional compensation for the Lenders, Borrower shall
pay to Agent, for the ratable benefit of such Lenders, in arrears, on the first
Business Day of each month prior to the Commitment Termination Date and on the
Commitment Termination Date, a Fee for Borrower's non-use of available funds in
an amount equal to the Applicable Unused Line Fee Margin per annum (calculated
on the basis of a 360 day year for actual days elapsed) multiplied by the
difference between (i) the Maximum Amount (as it may be reduced from time to
time) and (ii) the average for the period of the daily closing balances of the
Revolving Loan and the Swing Line Loan outstanding during the period for which
such Fee is due.
(d) If Borrower prepays the Revolving Loan and reduces or
terminates the Commitment, whether voluntarily or involuntarily and whether
before or after acceleration of the Obligations, or if the Commitment is
otherwise terminated, then Borrower shall pay to Agent, for the benefit of
Lenders as liquidated damages and compensation for the costs of being prepared
to make funds available hereunder an amount equal to the Applicable Percentage
multiplied by the amount of the reduction of the Commitment. As used herein, the
term "Applicable Percentage" shall mean (i) 3%, in the case of a prepayment on
or prior to the first anniversary of the Closing Date, (ii) 1%, in the case of a
prepayment after the first anniversary of the Closing Date but on or prior to
the second anniversary thereof, and (iii) 0.5%, in the case of a prepayment
after the second anniversary of the Closing Date but prior to the thirty-first
month anniversary thereof. Credit Parties agree that the Applicable Percentages
are a reasonable calculation of Lenders' lost profits in view of the
difficulties and impracticality of determining actual damages resulting from an
early termination of the Commitments. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrower upon a mandatory prepayment made
pursuant to Sections 1.3(b) or 1.15(c), provided that Borrower does not
permanently reduce or terminate the Commitment upon any such prepayment and, in
the
10
16
case of prepayments made pursuant to Sections 1.3(b)(ii) or (b)(iii), the
transaction giving rise to the applicable prepayment is expressly permitted
under Section 6.
(e) Borrower shall pay to Agent, for the ratable benefit of
Lenders, the Letter of Credit Fee as provided in Annex B.
1.9 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the first Business Day following
the Business Day on which immediately available funds therefor are received in
the Collection Account prior to 2:00 p.m. (New York time). Payments received
after 2:00 p.m. (New York time) on any Business Day or on a day that is not a
Business Day shall be deemed to have been received on the following Business
Day.
1.10 Application and Allocation of Payments.
(a) So long as no Default or Event of Default has occurred and
is continuing: (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied first to the Swing Line Loan and
second to the Revolving Loan; (ii) payments matching specific scheduled payments
then due shall be applied to those scheduled payments; (iii) voluntary
prepayments shall be applied as determined by Borrower, subject to the
provisions of Section 1.3(a); and (iv) mandatory prepayments shall be applied as
set forth in Section 1.3(c) and 1.3(d). All payments and prepayments applied to
a particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when a Default or Event or Default has occurred and is
continuing or following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (A) to
Fees and Agent's expenses reimbursable hereunder; (B) to interest on the Swing
Line Loan; (C) to principal payments on the Swing Line Loan; (D) to interest on
the Revolving Loan; (E) to principal payments on the outstanding Revolving
Credit Advances and to provide cash collateral for outstanding Letter of Credit
Obligations in the manner described in Annex B, ratably to the aggregate,
combined principal balance of the Revolving Credit Advances and Letter of Credit
Obligations; and (F) to all other Obligations, including expenses of Lenders to
the extent reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of Borrower and cause to be paid
all Fees, expenses, Charges, costs (including insurance premiums in accordance
with Section 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to pay promptly any such amounts
as and when due. At Agent's option and to the extent permitted by law, any
charges so made at any time shall constitute part of the Revolving Loan
hereunder, even if the amount of such charges exceed Borrowing Availability at
such time.
11
17
1.11 Loan Account and Accounting. Agent shall maintain a loan account
(the "Loan Account") on its books to record all Advances, all payments made by
Borrower, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations. All entries in the Loan Account
shall be made in accordance with Agent's customary accounting practices as in
effect from time to time. The balance in the Loan Account, as recorded on
Agent's most recent printout or other written statement, shall, absent manifest
error, be presumptive evidence of the amounts due and owing to Agent and Lenders
by Borrower; provided, that any failure to so record or any error in so
recording shall not limit or otherwise affect Borrower's duty to pay the
Obligations. Agent shall render to Borrower a monthly accounting of transactions
with respect to the Loans setting forth the balance of the Loan Account for the
immediately preceding month. Unless Borrower notifies Agent in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within 30 days after the date thereof, each and every such
accounting shall be deemed final, binding and conclusive on Borrower (absent
manifest error) in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of Notes to that Lender and may
rely on the Loan Account as evidence of the amount of Obligations from time to
time owing to it.
1.12 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from such Indemnified Person's gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED
UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
12
18
(b) To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if: (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether such repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) Borrower shall default in accepting any
borrowing of, or shall request a termination of any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrower has given notice requesting
the same in accordance herewith; or (iv) Borrower shall fail to make any
prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, then Borrower shall indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable hereunder. As promptly as
practicable under the circumstances, each Lender shall provide Borrower with its
written calculation of all amounts payable pursuant to this Section 1.12(b), and
such calculation shall be binding on the parties hereto unless Borrower shall
object in writing within ten Business Days of receipt thereof, specifying the
basis for such objection in detail.
1.13 Access.
(a) Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon one Business Day's prior notice as
frequently as Agent determines to be appropriate: (i) provide Agent and any of
its officers, employees and agents access to its properties, facilities,
advisors and employees (including officers) of each Credit Party and to the
Collateral; (ii) permit Agent and any of its officers, employees and agents to
inspect, audit and make extracts from any Credit Party's books and records; and
(iii) permit Agent and its officers, employees and agents to inspect, review,
evaluate and make test verifications and counts of the Accounts and other
Collateral of any Credit Party; provided, that (x) any such field examinations
may be conducted under the supervision of a member of such Credit Party's
management (without any express requirement to do so); and (y) so long as no
Event of Default has occurred and is continuing, Agent shall not be entitled to
be reimbursed for more than four such field examinations in any calendar year.
If a Default or Event of Default has occurred and is continuing or if access is
necessary to preserve or protect the Collateral as determined by Agent, each
such Credit Party shall provide such access to Agent and to each Lender at all
times and without advance notice. Furthermore, so long as any Event of Default
has occurred and is continuing, Borrower shall provide Agent and each Lender
with access to its suppliers and customers. Each Credit Party shall make
available to Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records that Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent, as it may from time to time reasonably request, to obtain
records from any service bureau or other Person that maintains records for such
Credit Party, and shall
13
19
maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least five days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrower.
(b) Borrower shall pay Agent a Fee of $650 per day per
individual (plus all out-of-pocket costs and expenses) in connection with
Agent's field examinations permitted under Section 1.13(a). Such Fees and
expenses shall be charged against the Revolving Loan in connection with each
field audit conducted after the Closing Date; provided, that so long as no Event
of Default has occurred and is continuing, Agent shall not be entitled to be
reimbursed for more than four field examinations in any calendar year.
1.14 Taxes.
(a) Any and all payments by Borrower hereunder or under the
Notes shall be made, in accordance with this Section 1.14, free and clear of and
without deduction for any and all present or future Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Notes, (i) the sum payable shall be increased as much as
shall be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 1.14) Agent
or Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within 30
days after the date of any payment of Taxes, Borrower shall furnish to Agent the
original or a certified copy of a receipt evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall
indemnify and, within ten days of demand therefor, pay Agent and each Lender for
the full amount of Taxes (including any Taxes imposed by any jurisdiction on
amounts payable under this Section 1.14, but excluding taxes imposed on or
measured by the net income of Agent or any Lender) paid by Agent or such Lender,
as appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower and Agent a properly completed and executed IRS Form W-8ECI or Form
W-8BEN, or other applicable form, certificate or document prescribed by the IRS
or the United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Borrower and Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person fails to deliver a Certificate of
Exemption in advance of becoming a Lender.
1.15 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that the adoption
after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding
14
20
capital adequacy, reserve requirements or similar requirements or compliance by
any Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law)
from any central bank or other Governmental Authority increases or would have
the effect of increasing the amount of capital, reserves or other funds required
to be maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to Agent shall be final, binding and
conclusive on Borrower (absent manifest error) for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall, from time to time upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower and
to Agent by such Lender, shall be final, binding and conclusive on Borrower
(absent manifest error) for all purposes. Each Lender agrees that, as promptly
as practicable after it becomes aware of any circumstances referred to above
that would result in any such increased cost, the affected Lender shall, to the
extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this Section 1.15(b).
(c) Notwithstanding anything to the contrary contained herein,
if the introduction of or any change in any law or regulation (or any change in
the interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain LIBOR Loans shall terminate, and (ii) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing to such Lender, together with
interest accrued thereon, unless Borrower, within five Business Days after the
delivery of such notice and demand, converts all such LIBOR Loans into Index
Rate Loans.
(d) (i) Within 15 days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Sections 1.14(a), 1.15(a)
or 1.15(b), Borrower may, at its option, notify Agent and such Affected Lender
of its intention to replace the Affected Lender. So long as no Default or Event
of Default has occurred and is continuing, Borrower, with the consent of Agent,
may obtain, at Borrower's expense, a replacement Lender ("Replacement Lender")
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrower obtains a Replacement Lender within 90 days
following notice of its intention to do so, the Affected Lender must sell and
15
21
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale;
provided, that Borrower shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
(ii) Notwithstanding the foregoing, Borrower shall
not have the right to obtain a Replacement Lender if the Affected Lender
rescinds its demand for increased costs or additional amounts within 15 days
following its receipt of Borrower's notice of intention to replace such Affected
Lender. Furthermore, if Borrower gives a notice of intention to replace and does
not so replace such Affected Lender within 90 days thereafter, Borrower's rights
under this Section 1.15(d) shall terminate and Borrower shall promptly pay all
increased costs or additional amounts demanded by such Affected Lender pursuant
to Sections 1.14(a), 1.15(a) and 1.15(b).
1.16 Single Loan. All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated to
make any Advance on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or provided
for in a manner satisfactory to Agent, or waived in writing by Agent and
Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by and delivered to Borrower,
each other Credit Party that is a party thereto, Agent and Lenders; and Agent
shall have received such documents, instruments, agreements and legal opinions
as Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all those
listed in the Schedule of Documents, each in form and substance reasonably
satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of
Outstanding L/Cs. (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the Prior
Lender Obligations will be repaid in full from the proceeds of the initial
Revolving Credit Advance and all Liens upon any of the property of any Credit
Party in favor of Prior Lender shall be terminated by Prior Lender immediately
upon such payment; and (ii) all letters of credit issued or guaranteed by Prior
Lender shall have been cash collateralized, supported by a guaranty of Agent or
supported by a Letter of Credit issued pursuant to Annex B, as mutually agreed
upon by Agent, Borrower and Prior Lender.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons, including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents; or (ii) an officer's certificate in form and substance reasonably
satisfactory to Agent affirming that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts supporting the
initial
16
22
Revolving Credit Advance incurred and the amount of the Reserves to be
established on the Closing Date shall be sufficient in value, as determined by
Agent, to provide Borrower with Borrowing Availability, after giving effect to
the initial Revolving Credit Advance and the repayment of all but $10,656,126 of
the Parent Indebtedness (on a pro forma basis, with trade payables being paid
currently, and expenses and liabilities being paid in the ordinary course of
business and without acceleration of sales), of at least $10,000,000.
(e) Payment of Fees. Borrower shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.8, and shall have reimbursed Agent for all fees, costs and expenses of
closing presented as of the Closing Date.
(f) Capital Structure; Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Agent in its sole discretion.
(g) Due Diligence. Agent shall have completed its business and
legal due diligence, including a roll forward of its previous Collateral audit,
with results reasonably satisfactory to Agent.
(h) Parent Indebtedness. Agent shall have received evidence
that not less than $10,656,126 of the Parent Indebtedness has been converted
into equity.
(i) Receivables Purchase Agreement. Agent shall have received
a fully-executed copy of the UT Receivables Purchase Agreement.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement; and Agent or Requisite Lenders have
determined not to make such Loan, convert or continue any Loan as a LIBOR Loan
or incur such Letter of Credit Obligation as a result of the fact that such
representation or warranty is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect
has occurred since the date hereof as determined by Requisite Lenders and Agent;
(c) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Loan or the incurrence of
any Letter of Credit Obligation and Agent or Requisite Lenders shall have
determined not to make any Loan, convert or continue any Loan as a LIBOR Loan or
incur any Letter of Credit Obligation as a result of such Default or Event of
Default;
(d) after giving effect to any Advance (or the incurrence of
any Letter of Credit Obligations), the outstanding principal amount of the
Revolving Loan would exceed the lesser of the Borrowing Base and the Maximum
Amount, in each case less the then outstanding principal amount of the Swing
Line Loan; or
17
23
(e) after giving effect to any Swing Line Advance, the
outstanding principal amount of the Swing Line Loan would exceed Swing Line
Availability.
The request and acceptance by Borrower of the proceeds of any Loan, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrower that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower of
the granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law. Each Credit Party: (a) is
a corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization set forth in Disclosure Schedule 3.1; (b) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not result
in exposure to losses, damages or liabilities in excess of $50,000; (c) has the
requisite power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease and to conduct its business as now, heretofore and proposed to be
conducted; (d) subject to specific representations regarding Environmental Laws,
has all material licenses, permits, consents or approvals from or by, and has
made all material filings with, and has given all material notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (e) is in compliance with its charter and
bylaws or partnership or operating agreement, as applicable; and (f) subject to
specific representations set forth herein regarding ERISA, Environmental Laws,
tax and other laws, is in compliance with all applicable provisions of law,
except where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
3.2 Executive Offices; Collateral Locations; Identification Numbers. As
of the Closing Date, the current location (and each location occupied during the
12 months preceding the Closing Date) of each Credit Party's chief executive
office and the warehouses and premises at which any Collateral is located are
set forth in Disclosure Schedule 3.2. In addition, Disclosure Schedule 3.2 lists
the federal employer identification number and state organizational
identification number, if any, of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Credit Party's power; (b) have been duly authorized by all
necessary corporate, limited liability company or limited partnership action;
(c) do
18
24
not contravene any provision of such Credit Party's charter or bylaws; (d) do
not violate any law or regulation, or any order or decree of any court or
Governmental Authority; (e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Credit Party is a
party or by which such Credit Party or any of its property is bound; (f) do not
result in the creation or imposition of any Lien upon any of the property of
such Credit Party other than those in favor of Agent, on behalf of itself and
Lenders, pursuant to the Loan Documents; and (g) do not require the consent or
approval of any Governmental Authority or any other Person, except those
referred to in Section 2.1(c), all of which will have been duly obtained, made
or complied with prior to the Closing Date. Each of the Loan Documents has been
duly executed and delivered by each Credit Party that is a party thereto and
each such Loan Document constitutes a legal, valid and binding obligation of
such Credit Party enforceable against it in accordance with its terms.
3.4 Financial Statements and Projections. Except for the Projections,
all Financial Statements concerning UT Holdings and its Subsidiaries that are
referenced below have been prepared in accordance with GAAP consistently applied
throughout the periods covered (except as disclosed therein and except, with
respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.
(a) Financial Statements. The Financial Statements referenced
at Items 1.1(a) and (b) of the Schedule of Documents and attached hereto as
Disclosure Schedule 3.4(a) have been delivered as of the date hereof.
(b) Projections. The Projections referenced at Item 1.1(c) of
the Schedule of Documents and attached hereto as Disclosure Schedule 3.4(b) have
been delivered as of the date hereof and have been prepared by Borrower in light
of the past operations of its businesses, but including future payments of known
contingent liabilities, and reflect projections for the four-year period
beginning on February 1, 2000, on a month-by-month basis for the first year and
on a year-by-year basis thereafter. The Projections are based upon estimates and
assumptions stated therein, all of which Borrower believes to be reasonable and
fair in light of current conditions and current facts known to Borrower and, as
of the Closing Date, reflect Borrower's good faith and reasonable estimates of
the future financial performance of Borrower and of the other information
projected therein for the period set forth therein, but are not to be viewed as
a guarantee that such Projections will be attained.
3.5 Material Adverse Effect. Between January 31, 2000, and the Closing
Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Projections and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect; (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect;
and (c) no Credit Party is in default and, to the best of each Credit Party's
knowledge, no third party is in default under any material contract, lease or
other agreement or instrument that alone or in the aggregate could reasonably be
expected to have a Material Adverse
19
25
Effect. Between January 31, 2000, and the Closing Date, no event has occurred
that alone or together with other events could reasonably be expected to have a
Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Disclosure Schedule 3.6 constitutes all of the
real property owned, leased, subleased, or used by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real Estate,
and valid and marketable leasehold interests in all of its leased Real Estate,
all as described in Disclosure Schedule 3.6, and copies of all such leases or a
summary of terms thereof reasonably satisfactory to Agent have been delivered to
Agent. Disclosure Schedule 3.6 further describes any Real Estate with respect to
which any Credit Party is a lessor, sublessor or assignor as of the Closing
Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets, subject to
Permitted Encumbrances. As of the Closing Date, none of the properties and
assets of any Credit Party are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances. Disclosure Schedule 3.6
also describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss that has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied. As of
the Closing Date, all material permits required to have been issued or
appropriate to enable the Real Estate to be lawfully occupied and used for all
of the purposes for which it is currently occupied and used have been lawfully
issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date: (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matters; (c) all
payments due from any Credit Party for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Credit Party; (d)
except as set forth in Disclosure Schedule 3.7, no Credit Party is a party to or
bound by any collective bargaining agreement, management agreement, consulting
agreement, employment agreement, bonus, restricted stock, stock option or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described in Disclosure Schedule
3.7 have been delivered to Agent); (e) there is no organizing activity involving
any Credit Party pending or, to any Credit Party's knowledge, threatened by any
labor union or group of employees; (f) there are no representation proceedings
pending or, to any Credit Party's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any Credit
Party has made a pending demand for recognition; and (g) except as set forth in
Disclosure Schedule 3.7, there are no material complaints or charges against any
Credit Party pending or, to the knowledge of any Credit Party, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. All
of the issued and outstanding Stock of each Credit Party is owned by each of the
20
26
Stockholders and in the amounts set forth in Disclosure Schedule 3.8. Except as
set forth in Disclosure Schedule 3.8, there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each
Credit Party as of the Closing Date (except for the Obligations) is described in
Section 6.3 (including Disclosure Schedule 6.3).
3.9 Government Regulation. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940. No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder. The making of the Loans by Lenders to Borrower, the
incurrence of the Letter of Credit Obligations on behalf of Borrower, the
application of the proceeds thereof and repayment thereof will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
herein as "Margin Stock"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts being contested in accordance with Section 5.2(b). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely
paid to the respective Governmental Authorities. Disclosure Schedule 3.11 sets
forth as of the Closing Date those taxable years for which any Credit Party's
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described in Disclosure Schedule 3.11, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties or their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements); or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no
21
27
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, that
would have a Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule 3.12 lists (i) all ERISA Affiliates
and (ii) all Plans and separately identifies all Pension Plans, including Title
IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the applicable provisions of ERISA and the IRC, including the timely filing
of all reports required under the IRC or ERISA, including the statement required
by 29 CFR Section 2520.104-23. Neither any Credit Party nor any ERISA Affiliate
has failed to make any contribution or pay any amount due as required by either
Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.
Neither any Credit Party nor any ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC, in
connection with any Plan, that would subject any Credit Party to a material tax
on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the IRC.
(b) Except as set forth in Disclosure Schedule 3.12: (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or any ERISA Affiliate (determined at any time within the last five
years) has been terminated, whether or not in a "standard termination" as that
term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any
Credit Party or any ERISA Affiliate (determined at any time within the last five
years) with Unfunded Pension Liabilities been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate (determined at such time); (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of the fair market value of the assets of
any Plan, measured on the basis of fair market value as of the latest valuation
date of any Plan; and (vii) no liability under any Title IV Plan has been
satisfied with the purchase of a contract from an insurance company that is not
rated AAA by the Standard & Poor's Corporation or an equivalent rating by
another nationally recognized rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation") that (a)
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan
22
28
Document or any action taken thereunder, or (b) has a reasonable risk of being
determined adversely to any Credit Party and that, if so determined, could be
reasonably be expected to have a Material Adverse Effect. Except (i) as set
forth in Disclosure Schedule 3.13 or (ii) for Litigation arising in the ordinary
course of such Credit Party's business that is fully-covered by insurance as to
which a solvent and unaffiliated insurance company has acknowledged coverage in
writing, as of the Closing Date there is no Litigation pending or, to any Credit
Party's knowledge, threatened, that seeks damages in excess of $250,000 or
injunctive relief against, or alleges criminal misconduct by, any Credit Party.
3.14 Brokers. No broker or finder brought about the obtaining, making
or closing of the Loans, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now or heretofore conducted by it or proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed by
its application or registration numbers, if applicable, in Disclosure Schedule
3.15. Each Credit Party, to its knowledge, conducts its business and affairs
without infringement of or interference with any Intellectual Property of any
other Person. Except as set forth in Disclosure Schedule 3.15, no Credit Party
is aware of any infringement claim by any other Person with respect to any
Intellectual Property Collateral.
3.16 Full Disclosure. No information contained in this Agreement, any
of the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party to Agent or any
Lender pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances with respect to the Collateral other than Accounts.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17, as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that could not reasonably be expected to
have a Material Adverse Effect; (ii) no Credit Party has caused or suffered to
occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate, except for Releases in compliance in with
applicable Environmental Laws; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance that would
not result in Environmental Liabilities that could reasonably be expected to
have a Material Adverse Effect; (iv) the Credit Parties have obtained, and are
in compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits would not result in Environmental Liabilities that
could reasonably be expected to have a Material Adverse Effect, and
23
29
all such Environmental Permits are valid, uncontested and in good standing; (v)
no Credit Party is involved in operations or knows of any facts, circumstances
or conditions, including any Releases of Hazardous Materials, that are likely to
result in any Environmental Liabilities of such Credit Party that could
reasonably be expected to have a Material Adverse Effect, and no Credit Party
has permitted any current or former tenant or occupant of the Real Estate to
engage in any such operations; (vi) there is no Litigation arising under or
related to any Environmental Laws, Environmental Permits or Hazardous Material
that seeks damages, penalties, fines, costs or expenses in excess of $250,000 or
injunctive relief against, or that alleges criminal misconduct by, any Credit
Party; (vii) no notice has been received by any Credit Party identifying it as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous state
statutes; and (viii) the Credit Parties have provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
prepared by or provided to such Credit Party pertaining to actual or potential
Environmental Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party's affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18 Insurance. Disclosure Schedule 3.18 lists all insurance policies
of any nature maintained, as of the Closing Date, for current occurrences by
each Credit Party, as well as a summary of the terms of each such policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule 3.19 lists
all banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Closing Date, including any Disbursement
Accounts, and such Schedule correctly identifies the name and address of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number therefor.
3.20 Government Contracts. Except as set forth in Disclosure Schedule
3.20, as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state or local law.
3.21 Customer and Trade Relations. As of the Closing Date, there exists
no actual or, to the knowledge of any Credit Party, threatened termination or
cancellation of, or any material adverse modification or change in: (a) the
business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or (b) the business
relationship of any Credit Party with any supplier material to its operations.
3.22 Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries)
24
30
of all of the following agreements or documents to which any of them are
subject, each of which is listed in Disclosure Schedule 3.22: (a) supply
agreements and purchase agreements not terminable by such Credit Party within 60
days following written notice issued by such Credit Party and involving
transactions in excess of $1,000,000 per annum; (b) leases of Equipment having a
remaining term of one year or longer and requiring aggregate rental and other
payments in excess of $500,000 per annum; (c) licenses and permits held by the
Credit Parties, the absence of which could be reasonably likely to have a
Material Adverse Effect; (d) instruments and documents evidencing Indebtedness
or Guaranteed Indebtedness of such Credit Party and any Lien granted by such
Credit Party with respect thereto; and (e) instruments and agreements evidencing
the issuance of any equity securities, warrants, rights or options to purchase
equity securities of such Credit Party.
3.23 Solvency. Both before and after giving effect to: (a) the Loans to
be made or incurred on the Closing Date or such other date as Loans and Letter
of Credit Obligations requested hereunder are made or incurred; (b) the
disbursement of the proceeds of such Loans pursuant to the instructions of
Borrower; (c) the Refinancing; (d) the payment and accrual of all transaction
costs in connection with the foregoing; and (e) the payment of all but
$10,656,126 of the Parent Indebtedness, each Credit Party (excluding UT
Services) is and will be Solvent.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees
that, from and after the Closing Date and until the Termination Date, it shall
deliver to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees
that, from and after the Closing Date and until the Termination Date, it shall
deliver to Agent or to Agent and Lenders, as required, the various Collateral
Reports (including Borrowing Base Certificates in the form of Exhibit 4.1(b)) at
the times, to the Persons and in the manner set forth in Annex F.
4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) Agent and (b) so long as an Event of Default has
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants, including Deloitte & Touche, LLP, and
authorizes and at Agent's request shall instruct those accountants and advisors
to disclose and make available to Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to any Credit Party (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of any
Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof and until the
Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit Party
shall: (a) do
25
31
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights and franchises; (b) continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder; (c) at all times maintain, preserve and protect all of its assets and
properties necessary for the conduct of its business, and keep the same in good
repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and (d) transact business only in
such corporate and trade names as are set forth in Disclosure Schedule 5.1 or as
otherwise permitted under Section 6.15.
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that: (i) adequate reserves with respect
to such contest are maintained on the books of such Credit Party, in accordance
with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges
(other than payments to warehousemen or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised Borrower in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
3.4(a).
5.4 Insurance; Damage to or Destruction of Collateral; Condemnation.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described in Disclosure Schedule 3.18 as in
effect on the date hereof or otherwise in form and in amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss payable
and additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days' prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at
26
32
any time or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above, or to pay all premiums relating thereto, Agent may
at any time or times thereafter obtain and maintain such policies of insurance
and pay such premiums and take any other action with respect thereto that Agent
deems advisable. Agent shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Agent shall not be
deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including reasonable attorneys' fees, court costs and other
charges related thereto, shall be payable on demand by Borrower to Agent and
shall be additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in
any Credit Party's risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require additional forms and limits of insurance to, in
Agent's opinion, adequately protect both Agent's and Lender's interests in all
or any portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its industry.
If reasonably requested by Agent, each Credit Party shall deliver to Agent from
time to time a report of a reputable insurance broker, reasonably satisfactory
to Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance satisfactory to Agent, endorsements to (i) all "All Risk" and business
interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (ii) all general liability and other liability policies naming Agent,
on behalf of itself and Lenders, as additional insured. Each Credit Party
irrevocably makes, constitutes and appoints Agent (and all officers, employees
or agents designated by Agent), so long as any Default or Event of Default shall
have occurred and be continuing or the anticipated insurance proceeds exceed
$250,000, as such Credit Party's true and lawful agent and attorney-in-fact for
the purpose of making, settling and adjusting claims under such "All Risk"
policies of insurance, endorsing the name of such Credit Party on any check or
other item of payment for the proceeds of such "All Risk" policies of insurance
and for making all determinations and decisions with respect to such "All Risk"
policies of insurance. Agent shall have no duty to exercise any rights or powers
granted to it pursuant to the foregoing power-of-attorney. Borrower shall
promptly notify Agent of any loss, damage, or destruction to the Collateral in
the amount of $250,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Agent in the
collection or handling thereof, Agent may, at its option, (x) apply such
proceeds to the reduction of the Obligations in accordance with Section 1.3(d);
provided, that in the case of insurance proceeds pertaining to any Credit Party
other than Borrower, such insurance proceeds shall be applied first to the Loans
owing by Borrower, if any, or (y) permit or require each Credit Party to use
such money, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds could not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $250,000 in the aggregate,
Agent shall permit the applicable Credit Party to replace, restore, repair or
rebuild the property; provided, that if such Credit Party has not completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(d);
provided further, that in the case of insurance proceeds pertaining to any
Credit Party other than Borrower,
27
33
such insurance proceeds shall be applied first to the Loans owing by Borrower,
if any. All insurance proceeds that are to be made available to any Credit Party
to replace, repair, restore or rebuild the Collateral shall be applied by Agent
to reduce the outstanding principal balance of the Revolving Loan (which
application shall not result in a permanent reduction of the Commitment) and
upon such application, Agent shall establish a Reserve against the Borrowing
Base in an amount equal to the amount of such proceeds so applied. All insurance
proceeds made available to any Credit Party that is not a Borrower to replace,
repair, restore or rebuild Collateral shall be deposited in a cash collateral
account. Thereafter, such funds shall be made available to such Credit Party to
provide funds to replace, repair, restore or rebuild the Collateral as follows:
(A) Borrower shall request a Revolving Credit Advance or release from the cash
collateral account to be made to such Credit Party in the amount requested to be
released; (B) so long as the conditions set forth in Section 2.2 have been met,
Lenders shall make such Revolving Credit Advance or Agent shall release funds
from the cash collateral account; and (C) in the case of insurance proceeds
applied against the Revolving Loan, the Reserve established with respect to such
insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with Section
1.3(d); provided, that in the case of insurance proceeds pertaining to any
Credit Party other than Borrower, such insurance proceeds shall be applied first
to the Loans owing by Borrower, if any.
(d) Each Credit Party shall, immediately upon learning of the
institution of any proceeding for the condemnation or other taking of any of its
property, notify Agent of the pendency of such proceeding, and agrees that Agent
may participate in any such proceeding, and such Credit Party from time to time
will deliver to Agent all instruments reasonably requested by Agent to permit
such participation. Agent is authorized to collect the proceeds of any
condemnation claim or award and apply them, at the direction of Required
Lenders, to the reduction of the Obligations; provided, that if the amount of
any condemnation is less than $250,000, Agent shall permit such Credit Party to
replace, restore, repair or rebuild the property so long as no Default or Event
of Default shall have occurred and be continuing at the time of any requested
release of funds. If the condemned property is to be replaced, repaired,
restored or rebuilt, such replacement, repair, restoration or rebuilding shall
be done with materials and workmanship of substantially as good a quality as
existed before such condemnation or taking. The applicable Credit Party shall
commence the work of replacement, repair, restoration or rebuilding as soon as
practicable and proceed diligently with it until completion. Plans and
specifications for any such repair or restoration shall be reasonably
satisfactory to Agent and shall be submitted to Agent prior to commencement of
the work and shall be subject to the reasonable approval of Agent.
5.5 Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to United States Customs, the Federal Aviation
Administration, the Federal Maritime Commission, ERISA and labor matters and
Environmental Laws and Environmental Permits, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default), the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement,
28
34
would have been required to be set forth or described in such Disclosure
Schedule or as an exception to such representation or that is necessary to
correct any information in such Disclosure Schedule or representation that has
been rendered inaccurate thereby (and, in the case of any supplements to any
Disclosure Schedule, such Disclosure Schedule shall be appropriately marked to
show the changes made therein); provided, that (a) no such supplement to any
such Disclosure Schedule or representation shall amend, supplement or otherwise
modify any Disclosure Schedule or representation, or be or be deemed a waiver of
any Default or Event of Default resulting from the matters disclosed therein,
except as consented to by Agent and Requisite Lenders in writing, and (b) no
supplement shall be required or permitted as to representations and warranties
that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its business
and affairs without the intentional infringement of or interference with any
Intellectual Property of any other Person.
5.8 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are appropriate or necessary to comply with
Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate if the failure to so comply could reasonably be expected to have a
Material Adverse Effect; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities in excess of $250,000;
and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $250,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrower shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
29
35
5.9 Landlords' and Mortgagees' Agreements, Real Estate Purchases. Each
Credit Party shall obtain a landlord's or mortgagee's agreement, as applicable,
from the lessor of each leased location or the mortgagee of each owned locations
where the books and records of any Credit Party is located, which agreement
shall contain a waiver or subordination of all Liens or claims that the landlord
or mortgagee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to Agent; provided,
that Agent may determine the amount of and maintain a Reserve against the
Borrowing Base for so long as Agent has not received such an agreement with
respect to any such location. Each Credit Party shall timely and fully pay and
perform its material obligations under all leases and other agreements with
respect to each leased location where any Collateral is or may be located. To
the extent otherwise permitted hereunder, if any Credit Party proposes to
acquire a fee ownership interest in Real Estate after the Closing Date, it shall
first provide to Agent a mortgage or deed of trust granting Agent a first
priority Lien on such Real Estate, together with environmental audits, mortgage
title insurance commitment, survey, local counsel opinion(s), and, if required
by Agent, supplemental casualty insurance and flood insurance, and such other
documents, instruments or agreements reasonably requested by Agent, in each case
in form and substance reasonably satisfactory to Agent.
5.10 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that, without the prior written consent of Agent and
the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge or consolidate with (other than the merger or
consolidation of one Credit Party with another), or acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any Person.
Notwithstanding the generality of the foregoing, Borrower may acquire the assets
(but not the liabilities) representing the domestic customs brokerage, freight
forwarding, warehousing and distribution business of Continental Container Lines
Inc., Continental Cargo Logistics, Inc. (CA), Continental Cargo Logistics, Inc.
(NY), and Continental Freight Distributors, Inc., so long as the total cash and
non-cash consideration paid by Borrower for such assets is made solely from the
cash proceeds of a capital contribution made by Parent into Borrower in an
amount equal to or greater than the aggregate amount of such consideration.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) Borrower may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to Borrower pursuant to negotiated agreements with respect to settlement
of such Account Debtor's Accounts in the ordinary
30
36
course of business, so long as the aggregate amount of such Accounts so settled
by Borrower does not exceed $50,000; (b) each Credit Party may maintain its
existing investments in its Subsidiaries as of the Closing Date; (c) Borrower
may maintain its membership interest in the Societe Internationale de
Telecommunications Aeronautics; and (d) so long as no Default or Event of
Default has occurred and is continuing and there is no outstanding Revolving
Loan balance, Borrower may make investments, subject to Control Letters in favor
of Agent for the benefit of Lenders or otherwise subject to a perfected security
interest in favor of Agent for the benefit of Lenders, in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States of America
or any agency thereof maturing within one year from the date of acquisition
thereof, (ii) commercial paper maturing no more than one year from the date of
creation thereof and currently having the highest rating obtainable from either
Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc., (iii)
certificates of deposit maturing no more than one year from the date of creation
thereof issued by commercial banks incorporated under the laws of the United
States of America, each having combined capital, surplus and undivided profits
of not less than $300,000,000 and having a senior unsecured rating of "A" or
better by a nationally recognized rating agency (an "A Rated Bank"), (iv) time
deposits maturing no more than 30 days from the date of creation thereof with A
Rated Banks, and (v) mutual funds that invest solely in one or more of the
investments described in clauses (i) through (iv) above.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to
exist any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in clause (k) of
the definition of Permitted Encumbrances, (ii) the Loans and the other
Obligations, (iii) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, (iv) existing Indebtedness described in Disclosure
Schedule 6.3 and refinancings thereof or amendments or modifications thereof
that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit Party, Agent
or any Lender, as determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (v) unsecured Indebtedness in an aggregate
outstanding amount not to exceed $100,000, (vi) Indebtedness permitted under
Section 6.17; (vii) Indebtedness of Borrower to Parent described in Section
8.1(b)(ii); and (viii) Indebtedness consisting of intercompany loans and
advances made by Borrower to any other Credit Party that is a Guarantor or by
any such Credit Party to Borrower; provided, that: (A) Borrower shall have
executed and delivered to each such Guarantor, and each such Guarantor shall
have executed and delivered to Borrower, on the Closing Date, a demand note
(collectively, the "Intercompany Notes") to evidence any such intercompany
Indebtedness owing at any time by Borrower to such Guarantor or by such
Guarantor to Borrower, which Intercompany Notes shall be in form and substance
reasonably satisfactory to Agent and shall be pledged and delivered to Agent
pursuant to the Pledge Agreement or Security Agreement as additional collateral
security for the Obligations; (B) Borrower shall record all intercompany
transactions on its books and records in a manner reasonably satisfactory to
Agent; (C) the obligations of Borrower under any such Intercompany Notes shall
be subordinated to the Obligations of Borrower hereunder in a manner reasonably
satisfactory to Agent; (D) at the time any such intercompany loan or advance is
made by Borrower and after giving effect thereto, Borrower shall be Solvent; (E)
no Default or Event of Default would occur and be continuing after giving effect
to any such proposed
31
37
intercompany loan; (F) the aggregate amount of such intercompany loans owing to
Borrower by UT Services shall not exceed, at any time outstanding during any
Fiscal Year, the sum of $1,500,000 plus the amount of such loans outstanding as
of the end of the immediately preceding Fiscal Year; (G) the aggregate balance
of all such intercompany loans between all Credit Parties as a whole (other than
UT Services) shall not exceed $1,500,000 at any time outstanding; (H) the
aggregate balance of all such intercompany loans from any one Credit Party to
another Credit Party (in each case other than UT Services) shall not exceed
$500,000 at any time outstanding; and (I) the recipient of any such intercompany
loans shall be creditworthy as reasonably determined by Agent.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than: (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with Sections 6.8(b) or (c); (iii) Indebtedness permitted by Section 6.3(a)(iv)
upon any refinancing thereof in accordance with Section 6.3(a)(iv); and (iv)
contingent earnout payments disclosed in Disclosure Schedule 6.3 to the extent
any such payment is determined by such Credit Party's Board of Directors to be
in its best interest.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. All such
transactions existing as of the date hereof are described in Disclosure Schedule
6.4(a).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
employees in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $500,000 in the aggregate at any one time outstanding.
6.5 Capital Structure and Business. No Credit Party shall (a) make any
changes in any of its business objectives, purposes or operations that could in
any way adversely affect the repayment of the Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described in
Disclosure Schedule 3.8, including the issuance or sale of any shares of Stock,
warrants or other securities convertible into Stock or any revision of the terms
of its outstanding Stock; provided, that any Credit Party may issue or sell
shares of its Stock for cash so long as (i) the proceeds thereof are applied in
prepayment of the Obligations as required by Section 1.3(b)(iii), and (ii) no
Change of Control occurs after giving effect thereto, or (c) amend its charter
or bylaws in a manner that would adversely affect Agent or Lenders or such
Credit Party's duty or ability to repay the Obligations. No Credit Party shall
engage in any business other than the businesses currently engaged in by it or
businesses reasonably related thereto.
6.6 Guaranteed Indebtedness. Except as otherwise set forth in
Disclosure Schedule (6.6), no Credit Party shall create, incur, assume or permit
to exist any Guaranteed Indebtedness except
32
38
(a) by endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for
the benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement.
6.7 Liens. No Credit Party shall create, incur, assume or permit to
exist any Lien on or with respect to its Accounts or any of its other properties
or assets (whether now owned or hereafter acquired) except for Liens in
existence on the date hereof and summarized on Disclosure Schedule 6.7 and other
Permitted Encumbrances. In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument or take any other action that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses that
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the Stock of any of its Subsidiaries (whether in a public or a private
offering or otherwise) or any of its Accounts, other than: (a) the sale of
Inventory in the ordinary course of business; (b) the sale of Accounts under the
terms of the UT Receivables Purchase Agreement; (c) the sale, transfer,
conveyance or other disposition by a Credit Party of Equipment, Fixtures that is
obsolete or no longer used or useful in such Credit Party's business and having
a sales price not exceeding $150,000 in any single transaction or $300,000 in
the aggregate in any Fiscal Year; and (d) other Equipment and Fixtures having a
value not exceeding $150,000 in any single transaction or $300,000 in the
aggregate in any Fiscal Year. With respect to any disposition of assets or other
properties permitted pursuant to clauses (b) and (c) above, Agent agrees on
reasonable prior written notice to release its Lien on such assets or other
properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrower, at Borrower's expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrower.
6.9 ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10 Financial Covenants. Borrower shall not breach or fail to comply
with any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits, or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13 Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing
33
39
to it, except for reasonable consideration negotiated on an arm's length basis
and in the ordinary course of its business consistent with past practices.
6.14 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrower and
Guarantors to the extent permitted by Section 6.3, (b) dividends and
distributions by Subsidiaries of Borrower paid to Borrower, (c) employee loans
permitted under Section 6.4(b), (d) payments of principal and interest of
Intercompany Notes issued in accordance with Section 6.3; (e) payments to UT
Holdings by any other Credit Party consisting of the annual income tax liability
of UT Holdings that is attributable to the business of such other Credit Party;
and (f) the repayment of all but $10,656,126 of the Parent Indebtedness with the
proceeds of the initial Revolving Credit Advance.
6.15 Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall (a) change its corporate name or trade name or (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral (other than to a location in which
Agent has perfected its Lien, for the benefit of Agent and Lenders, on the
Collateral located therein, and if the books and records of any Credit Party are
located at such location, such Credit Party shall have delivered a landlord's or
mortgagee's agreement in form and substance reasonably satisfactory to Agent
with respect thereto), in each case without at least 30 days' prior written
notice to Agent (except with respect to the proposed name change disclosed by
Borrower to Lender prior to the Closing Date) and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken, and
provided that any such new location shall be in the continental United States.
Without limiting the foregoing, no Credit Party shall change its name, identity
or corporate structure in any manner that might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code except upon prior written notice to Agent and Lenders and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection of any Liens
in favor of Agent, on behalf of Lenders, in any Collateral, has been completed
or taken. No Credit Party shall change its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of Borrower to
Borrower.
6.17 No Speculative Transactions. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18 Leases; Real Estate Purchases. No Credit Party shall enter into
any operating lease for Equipment or Real Estate if the aggregate of all such
operating lease payments payable in any
34
40
year for all Credit Parties on a consolidated basis would exceed (a) $6,500,000
at any time during Borrower's Fiscal Year ending January 31, 2001, (b)
$7,500,000 at any time during Borrower's Fiscal Year ending January 31, 2002,
and (c) $8,500,000 at any time during Borrower's Fiscal Year ending January 31,
2003. No Credit Party shall purchase fee simple ownership interest in Real
Estate with an aggregate purchase price in excess of $250,000.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided, that the provisions of Section
11, the payment obligations under Sections 1.14 and 1.15, and the indemnities
contained in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten days following Agent's demand for such reimbursement or payment of
expenses.
(b) (i) Except as provided in clause (ii) below, any Credit
Party fails or neglects to perform, keep or observe any of the provisions of
Sections 1.4, 1.7, 5.4(a) or 6, or any of the provisions set forth in Annexes C
or G, respectively; or
(ii) Any Credit Party breaches or fails to comply with
any Financial Covenant (other than with respect to maximum Capital Expenditures)
and Parent has not (A) concurrently with the delivery of the Compliance
Certificate evidencing such breach or failure, delivered a letter to Agent
indicating that, within 15 days of such letter, Parent will make a cash capital
contribution in, or a loan subordinated to the Obligations in a manner
reasonably satisfactory
35
41
to Agent to, Borrower, in each case in an amount that would have prevented such
breach or failure had Borrower had such cash at the time of the measurement of
the applicable Financial Covenant, or (B) timely made such cash capital
contribution or loan.
(c) Borrower shall fails or neglects to perform, keep or
observe any of the provisions of Section 4 or any provisions set forth in
Annexes E or F, respectively, and the same shall remain unremedied for three
days or more.
(d) Any Credit Party fails or neglects to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for 20 days or more.
(e) A default or breach occurs under any other agreement,
document or instrument to which any Credit Party or Parent is a party that is
not cured within any applicable grace period therefor, and such default or
breach (i) involves the failure to make any payment when due in respect of any
Indebtedness or Guaranteed Indebtedness (other than the Obligations) of any
Credit Party or Parent in excess of $500,000 in the aggregate (including (A)
undrawn committed or available amounts and (B) amounts owing to all creditors
under any combined or syndicated credit arrangements), or (ii) causes, or
permits any holder of such Indebtedness or Guaranteed Indebtedness or a trustee
to cause, Indebtedness or Guaranteed Indebtedness or a portion thereof in excess
of $500,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment, or cash collateral in respect
thereof to be demanded, in each case regardless of whether such default is
waived, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect as of the date of any such
certificate, or any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate (other than
a Borrowing Base Certificate) made or delivered to Agent or any Lender by any
Credit Party is untrue or incorrect in any material respect as of the date when
made or deemed made.
(g) Assets of any Credit Party with a fair market value of
$250,000 or more are attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
or Parent seeking a decree or order in respect of such Credit Party or Parent
(i) under the Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or Parent or for any substantial part of any such Credit Party's or
Parent's assets, or (iii) ordering the winding-up or liquidation of the affairs
of such Credit Party or Parent, and such case or proceeding shall remain
undismissed or unstayed for 60 days or more or a decree or order granting the
relief sought in such case or proceeding shall be entered by a court of
competent jurisdiction over such case or proceeding.
(i) Any Credit Party or Parent (i) files a petition seeking
relief under the
36
42
Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or Parent or for any substantial part of any such Credit
Party's or Parent's assets, (iii) makes an assignment for the benefit of
creditors, (iv) takes any action in furtherance of any of the foregoing, or (v)
admits in writing its inability to, or is generally unable to, pay its debts as
such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $250,000 in the aggregate at any time are outstanding against one or
more Credit Party and the same are not, within 30 days after the entry thereof,
have been discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay
except to the extent such judgment or judgments are fully covered by insurance
as to which a solvent and unaffiliated insurance company has acknowledged
coverage in writing.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party challenges the enforceability of any Loan Document or asserts in
writing, or engages in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents ceases to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any default or breach by Borrower occurs and is continuing
under the Cargo Agency and Authorized Intermediary Agreement between Borrower
and The Cargo Network Services Corporation (as the same may be in effect from
time to time), or such agreement shall be terminated for any reason.
8.2 Remedies.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the Revolving Loan facility with respect to
additional Advances and/or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Default or Event of Default has occurred and is continuing, Agent may (and at
the written request of Requisite Lenders shall), without notice except as
otherwise expressly provided herein, increase the rate of interest applicable to
the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice: (i) terminate the Revolving Loan facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations, (ii) declare
all or any portion of the Obligations, including all or any portion of any Loan,
to be
37
43
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower and each other Credit Party, or (iii) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or in equity, including all
remedies provided under the Code; provided, that upon the occurrence of an Event
of Default specified in Sections 8.1(h)or (i), the Revolving Loan facility shall
be immediately terminated and all of the Obligations, including the Revolving
Loan, shall become immediately due and payable without declaration, notice or
demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard;
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security that might be required by any court prior to allowing Agent
to exercise any of its remedies; and (c) the benefit of all valuation,
appraisal, marshalling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may
make as assignment to a Qualified Assignee of, or sell participations in, at any
time or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement (an "Assignment Agreement" substantially in
the form attached hereto as Exhibit 9.1(a) and otherwise in form and substance
reasonably satisfactory to, and acknowledged by, Agent; (ii) be conditioned on
such assignee Lender representing to the assigning Lender and Agent that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $5,000,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $5,000,000; and
(iv) include a payment by the assigning Lender to Agent of an assignment fee of
$3,500. In the case of an assignment by a Lender under this Section 9.1, the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Borrower
hereby acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be a
"Lender." In all instances, each Lender's liability to make Loans hereunder
shall be several and not joint and shall be limited to such Lender's Pro Rata
Share of the applicable Commitment. In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such Lender
shall so notify Borrower and Borrower shall, upon the
38
44
request of Agent or such Lender, execute new Notes, if any, in exchange for the
Notes, if any, being assigned. Notwithstanding the foregoing provisions of this
Section 9.1(a), any Lender may at any time pledge the Obligations held by it and
such Lender's rights under this Agreement and the other Loan Documents to a
Federal Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor; provided, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender's obligations hereunder or under any other Loan
Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.12,
1.14, 1.15 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender." Except as set forth in the
preceding sentence neither Borrower nor any other Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist
any Lender permitted to sell assignments or participations under this Section
9.1 as reasonably required to enable the assigning or selling Lender to effect
any such assignment or participation, including the execution and delivery of
any and all agreements, notes and other documents and instruments as shall be
requested and the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by it
and all other information provided by it and included in such materials, except
that any Projections delivered by Borrower shall only be certified by Borrower
as having been prepared by Borrower in compliance with the representations
contained in Section 3.4(b).
(e) Any Lender may furnish any information in the possession
of such Lender from time to time to assignees and participants (including
prospective assignees and participants); provided, that such Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in Section 11.8.
39
45
(f) So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.15(a),
increased costs under Section 1.15(b), an inability to fund LIBOR Loans under
Section 1.15(c), or withholding taxes in accordance with Section 1.14(a).
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender"), may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing by the Granting Lender to Agent and
Borrower, the option to provide to Borrower all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrower pursuant
to this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrower and Agent and assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by Borrowers and Agent) providing liquidity or credit support to or for the
account of such SPC to support the funding or maintenance of Loans, and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 9.1(g)
may not be amended without the prior written consent of each Granting Lender,
all or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or waiver
of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder.
40
46
9.2 Appointment of Agent.
(a) GE Capital is hereby appointed to act on behalf of all
Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agent and Lenders
and no Credit Party nor any other Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, Agent shall act solely
as an agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
Credit Party or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Agent shall be mechanical and administrative in nature
and Agent shall not have, or be deemed to have, by reason of this Agreement, any
other Loan Document or otherwise a fiduciary relationship in respect of any
Lender. Except as expressly set forth in this Agreement and the other Loan
Documents, Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to any Credit Party or any of
their respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
(b) If Agent shall request instructions from Requisite
Lenders, Supermajority Lenders or all affected Lenders with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Loan Document, then Agent shall be entitled to refrain from such act or
taking such action unless and until Agent shall have received instructions from
Requisite Lenders, Supermajority Lenders, or all affected Lenders, as the case
may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (i) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (ii) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (iii) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, except for damages caused by
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, Agent: (a) may treat the payee of any Note as the
holder thereof until Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to Agent; (b)
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for
41
47
any statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of
Borrower hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
wilful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the
42
48
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not less
than 30 days' prior written notice thereof to Lenders and Borrower. Upon any
such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender if
a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing within 30 days after the date
such notice of resignation was given by the resigning Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above. Any successor Agent appointed by
Requisite Lenders hereunder shall be subject to the approval of Borrower, such
approval not to be unreasonably withheld or delayed; provided, that such
approval shall not be required if a Default or an Event of Default has occurred
and is continuing. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as Agent under this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
and subject to the provisions of Section 9.9(f), each Lender is hereby
authorized at any time or from time to time, without notice to any Credit Party
or to any other Person, any such notice being hereby expressly waived, to offset
and to appropriate and to apply any and all balances held by it at any of its
offices for the account of Borrower or any other Credit Party (regardless of
whether such balances are then due to Borrower or any other Credit Party) and
any other properties or assets at any time held or owing by that Lender or that
holder to or for the credit or for the account of Borrower or any other Credit
Party against and on account of any of the Obligations that are not paid when
due. Any Lender exercising a right of setoff or otherwise receiving any payment
on account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance with
their respective Pro Rata Shares (other than offset rights exercised by any
Lender with respect to Section 1.12, 1.14, or 1.15). Each Lender's obligation
under this Section 9.8 shall be in addition
43
49
to and not in limitation of its obligations to purchase a participation in an
amount equal to its Pro Rata Share of the Swing Line Loans under Section 1.1.
Each Credit Party agrees, to the fullest extent permitted by law, that (a) any
Lender may exercise its right to offset with respect to amounts in excess of its
Pro Rata Share of the Obligations and may sell participations in such amounts so
offset to other Lenders and holders, and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the setoff amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations by
that Lender shall be rescinded and the purchase price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Lenders shall refund or participate in the Swing
Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(b). If the
Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Lenders promptly after receipt of a
Notice of Revolving Advance and in any event prior to 2:00 p.m. (New York time)
on the date such Notice of Revolving Advance is received, by telecopy, telephone
or other similar form of transmission. Each Lender shall make the amount of such
Lender's Pro Rata Share of such Revolving Credit Advance available to Agent in
same day funds by wire transfer to Agent's account as set forth in Annex H not
later than 4:00 p.m. (New York time) on the requested funding date, in the case
of an Index Rate Loan, and not later than 1:00 p.m. (New York time) on the
requested funding date, in the case of a LIBOR Loan. After receipt of such wire
transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to Borrower. All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind.
(ii) On the second Business Day of each calendar week
or more frequently at Agent's election (each, a "Settlement Date"), Agent shall
advise each Lender by telephone or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that such Lender has funded all
payments or Advances required to be made by it and purchased all participations
required to be purchased by it under this Agreement and the other Loan Documents
as of such Settlement Date, Agent shall pay to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid by Borrower since the previous
Settlement Date for the benefit of that Lender on the Loans held by it. To the
extent that any Lender (a "Non-Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrower. Such
payments shall be made by wire transfer to such Lender's account (as specified
by such Lender in Annex H or the applicable Assignment Agreement) not later than
11:00 a.m. (California time) on the next Business Day following each Settlement
Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume
that each Lender
44
50
will make its Pro Rata Share of each Revolving Credit Advance available to Agent
on each funding date. If such Pro Rata Share is not, in fact, paid to Agent by
such Lender when due, Agent will be entitled to recover such amount on demand
from such Lender without setoff, counterclaim or deduction of any kind. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon Agent's
demand, Agent shall promptly notify Borrower and Borrower shall immediately
repay such amount to Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder. To the extent that Agent advances funds to Borrower on behalf of any
Lender and is not reimbursed therefor on the same Business Day as such Advance
is made, Agent shall be entitled to retain for its account all interest accrued
on such Advance until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person
without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender
to make any Revolving Credit Advance or any payment required by it hereunder, or
to purchase any participation in any Swing Line Loan to be made or purchased by
it on the date specified therefor shall not relieve any other Lender (each such
other Lender, an "Other Lender") of its obligations to make such Advance or
purchase such participation on such date, but neither any Other Lender nor Agent
shall be responsible for the failure of any Non-Funding Lender to make an
Advance, or to purchase a participation required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" (or be included in the calculation of "Requisite Lenders"
or "Supermajority Lenders" hereunder) for any voting or consent rights under or
with respect to any Loan Document. At Borrower Representative's request, Agent
or a Person reasonably acceptable to Agent shall have the right with Agent's
consent and in Agent's sole discretion (but shall have no obligation) to
purchase from any Non-Funding Lender, and each Non-Funding Lender agrees that it
shall, at Agent's request, sell and assign to Agent or such Person, all of the
Commitments of such Non-Funding Lender for an amount equal to the principal
balance of all Loans held by such Non-Funding Lender and all accrued interest
and fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide
45
51
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to, any Credit Party, with notice of any Event of Default
of which Agent has actually become aware and with notice of any action taken by
Agent following any Event of Default; provided, that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such failure
is attributable to Agent's gross negligence or willful misconduct. Lenders
acknowledge that Borrower is required to provide Financial Statements and
Collateral Reports to Lenders in accordance with Annexes E and F hereto and
agree that Agent shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent and Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, Agent, Lenders and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and Lenders shall be void. The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of each
Credit Party, Agent and Lenders with respect to the transactions contemplated
hereby and no Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 11.2. Any letter of interest, proposal or commitment letter
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Agent and Borrower, and by Requisite Lenders,
Supermajority Lenders or all affected Lenders, as applicable. Except as set
forth in clauses
46
52
(b) and (c) below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the written consent of
Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of the Borrowing Base or
that makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts set forth in Section 1.6 shall be effective unless the same
shall be in writing and signed by Agent, Supermajority Lenders and Borrower. No
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that waives compliance with the conditions precedent
set forth in Section 2.2 to the making of any Loan or the incurrence of any
Letter of Credit Obligations shall be effective unless the same shall be in
writing and signed by Agent, Requisite Lenders and Borrower. Notwithstanding
anything contained in this Agreement to the contrary, no waiver or consent with
respect to any Default or any Event of Default shall be effective for purposes
of the conditions precedent to the making of Loans or the incurrence of Letter
of Credit Obligations set forth in Section 2.2 unless the same shall be in
writing and signed by Agent, Requisite Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Sections 1.3(b)(ii) and
(b)(iii)) or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender; (v) release any Guaranty or, except
as otherwise permitted herein or in the other Loan Documents, release, or permit
any Credit Party to sell or otherwise dispose of any Collateral with a value
exceeding $1,000,000 in the aggregate (which action shall be deemed to directly
affect all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 11.2 or the definitions of the terms "Requisite Lenders" or
"Supermajority Lenders" insofar as such definitions affect the substance of this
Section 11.2. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent or L/C Issuer under this Agreement or
any other Loan Document shall be effective unless in writing and signed by Agent
or L/C Issuer, as the case may be, in addition to Lenders required hereinabove
to take such action. Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
No amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on any Credit Party in any case shall entitle such Credit
Party or any other Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of the
Notes.
(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
47
53
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as a "Non-Consenting Lender"),
(ii) requiring the consent of Supermajority Lenders,
the consent of Requisite Lenders is obtained, but the consent of Supermajority
Lenders is not obtained, or
(iii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by such Non-Consenting Lenders and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrower termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrower shall reimburse (i) Agent for all
reasonable fees, costs and expenses (including the reasonable fees and expenses
of all of its counsel, advisors, consultants and auditors) and (ii) Agent (and,
with respect to clauses (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers),
incurred in connection with the negotiation and preparation of the Loan
Documents and incurred connection with:
(a) the forwarding to Borrower or any other Person on behalf
of Borrower by Agent of the proceeds of any Loan (including a wire transfer fee
of $25 per wire transfer);
(b) any amendment, modification or waiver of, consent with
respect to, or termination of, any of the Loan Documents or advice in connection
with the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other Person,
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be
48
54
executed or delivered in connection herewith or therewith, including any
litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against Borrower or
any other Person that may be obligated to Agent by virtue of the Loan Documents,
including any such litigation, contest, dispute, suit, proceeding or action
arising in connection with any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; provided, that in the case of
reimbursement of counsel for Lenders other than Agent, such reimbursement shall
be limited to one counsel for all such Lenders; and further provided, that no
Person shall be entitled to reimbursement under this clause (c) in respect of
any litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person's gross negligence or willful
misconduct;
(d) any attempt to enforce any remedies of Agent or any Lender
against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents,
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default; provided, that in the case of reimbursement of counsel for Lenders
other than Agent, such reimbursement shall be limited to one counsel for all
such Lenders;
(e) any workout or restructuring of the Loans during the
pendency of one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrower to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or
49
55
any Lender, unless such waiver or suspension is by an instrument in writing
signed by an officer of or other authorized employee of Agent and the applicable
required Lenders and directed to Borrower specifying such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 Severability. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
or any other Loan Document shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement
conflicts with any provision in any of the other Loan Documents, the provision
contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintain the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit Parties
and designated as confidential for a period of two years following receipt
thereof, except that Agent and each Lender may disclose such information: (a) to
Persons employed or engaged by Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any bona fide
assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 11.8 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a)
above); (c) as required or requested by any Governmental Authority or reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena
or legal or administrative order or process; (d) as, on the advice of Agent's or
such Lender's counsel, is required by law; (e) in connection with the exercise
of any right or remedy under the Loan Documents or in connection with any
Litigation to which Agent or such Lender is a party; or (f) that ceases to be
confidential through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK
COUNTY, CITY OF NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE
50
56
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX I AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE
UNITED STATES MAIL, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) one Business Day after deposit with a reputable overnight courier
with all charges prepaid; or (d) when delivered, if hand-delivered by messenger,
all of which shall be addressed to the party to be notified and sent to the
address or facsimile number indicated in Annex I or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower or Agent) designated in Annex I to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement
51
57
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party executing
this Agreement agrees that neither it nor its Affiliates will in the future
issue any press releases or other public disclosure (other than the filing of
this Agreement with the Securities and Exchange Commission) using the name of GE
Capital or its affiliates or referring to this Agreement, the other Loan
Documents without at least two Business Days' prior notice to GE Capital and
without the prior written consent of GE Capital unless (and only to the extent
that) such Credit Party or Affiliate is required to do so under law and then, in
any event, such Credit Party or Affiliate will consult with GE Capital before
issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by this
Agreement. Agent or such Lender shall provide a draft of any such tombstone or
similar advertising material to each Credit Party for review and comment prior
to the publication thereof. Agent reserves the right to provide to industry
trade organizations information necessary and customary for inclusion in league
table measurements with Borrower's consent, which shall not be unreasonably
withheld or delayed.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Borrower for liquidation or reorganization, should Borrower become insolvent or
make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Borrower's
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
52
58
11.16 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
[REMAINDER OF PAGE LEFT BLANK]
53
59
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
"BORROWER"
UNION-TRANSPORT CORPORATION
By: /s/ THURSO XXXXXXXX
--------------------------
Name: Thurso Xxxxxxxx
------------------------
Title: VP-Finance
-----------------------
"AGENT" and "LENDER"
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------
Xxxxxx X. Xxxxxxxxx
Duly Authorized Signatory
54
60
The following Persons are signatories to this Agreement in
their capacity as Credit Parties and not as Borrowers.
"CREDIT PARTIES"
UNION-TRANSPORT (U.S.) UNION-TRANSPORT LOGISTICS INC.
HOLDINGS, INC.
By: /s/ Thurso Xxxxxxxx By: /s/ Thurso Xxxxxxxx
---------------------------- ----------------------------
Name: Thurso Xxxxxxxx Name: Thurso Xxxxxxxx
-------------------------- --------------------------
Title: VP - Finance Title: VP - Finance
------------------------- -------------------------
UNION-TRANSPORT BROKERAGE CORP. VANGUARD CARGO SYSTEMS, INC.
By: /s/ Thurso Xxxxxxxx By: /s/ Thurso Xxxxxxxx
---------------------------- ----------------------------
Name: Thurso Xxxxxxxx Name: Thurso Xxxxxxxx
-------------------------- --------------------------
Title: VP - Finance Title: VP - Finance
------------------------- -------------------------
UT SERVICES, INC.
By: /s/ Thurso Xxxxxxxx
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP - Finance
-------------------------
55
61
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references in the following definitions to Sections, Exhibits,
Schedules or Annexes shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any other
Person under, with respect to, or on account of, an Account.
"Accounting Changes" has the meaning assigned to it in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Person, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments),
whether arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of such Person's rights in,
to and under all purchase orders or receipts for goods or services, (c) all of
such Person's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all monies
due or to become due to such Person under all purchase orders and contracts for
the sale of goods or the performance of services or both by such Person or in
connection with any other transaction (whether or not yet earned by performance
on the part of such Person), including the right to receive the proceeds of said
purchase orders and contracts, (e) all health care insurance receivables, and
(f) all collateral security and guaranties of any kind given by any other Person
with respect to any of the foregoing.
"Advance" means any Revolving Credit Advance or Swing Line Advance, as
the context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners, and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, that the term "Affiliate" shall specifically exclude Agent
and each Lender.
"Agent" means GE Capital, in its capacity as Agent for Lenders, or its
successor appointed pursuant to Section 9.7.
A-1
62
"Agreement" means the Credit Agreement by and among Borrower, the other
Credit Parties party thereto, GE Capital, as Agent and a Lender, and the other
Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning assigned to it in the recitals to the
Agreement.
"Applicable L/C Margin" means 2%.
"Applicable Margins" means, collectively, the Applicable L/C Margin,
the Applicable Unused Line Fee Margin, the Applicable Revolver Index Margin, and
the Applicable Revolver LIBOR Margin.
"Applicable Percentage" has the meaning assigned to it in Section
1.8(c).
"Applicable Revolver Index Margin" means (i) at all times prior to the
Syndication Date, 2.75%, and (b) at all time on and after the Syndication Date,
0.50%.
"Applicable Revolver LIBOR Margin" means 2.75%.
"Applicable Unused Line Fee Margin" means 0.40%.
"Assignment Agreement" has the meaning assigned to it in Section
9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq.
"Blocked Accounts" has the meaning assigned to it in Annex C.
"Borrower" has the meaning assigned to it in the preamble to the
Agreement.
"Borrowing Availability" means as of any date of determination, the
lesser of (a) the Maximum Amount and (b) the Borrowing Base, in each case less
the sum of the aggregate Revolving Loan and Swing Line Loan then outstanding,;
provided, that an Overadvance in accordance with Section 1.1(a)(iii) may cause
the Revolving Loan and the Swing Line Loan to exceed the Borrowing Base by the
amount of such permitted Overadvance.
"Borrowing Base" means, as of any date of determination by Agent, from
time to time, an amount equal at such time to 85% of the book value of
Borrower's Eligible Accounts, less any Reserves established by Agent at such
time.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrower in the form attached to the Agreement as
Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which
A-2
63
banks are required or permitted to be closed in the State of New York and in
reference to LIBOR Loans shall mean any such day that is also a LIBOR Business
Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning assigned to it in Annex B.
"Cash Equivalents" has the meaning assigned to it in Annex B.
"Cash Management System" has the meaning assigned to it in Section 1.7.
"Change of Control" means any event, transaction or occurrence as a
result of which (a) Parent ceases to own and control, directly or indirectly,
all of the economic and voting rights associated with ownership of at least 100%
of all classes of the outstanding capital Stock of UT Holdings on a fully
diluted basis, or (b) any Credit Party ceases to own and control all of the
economic and voting rights associated with all of the outstanding capital Stock
of any of its Subsidiaries.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Person, (d) any Person's
ownership or use of any properties or other assets, or (e) any other aspect of
any Person's business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Person, wherever located.
"Closing Date" means August 15, 2000.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Agent's or
any Lender's Lien on any Collateral is governed by the Uniform Commercial Code
as enacted and in effect in a jurisdiction other than the State of New York, the
term "Code" shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely
A-3
64
for purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.
"Collateral" means the property covered by the Security Agreement and
the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, the Guaranties, the Patent, Trademark and Copyright Security
Agreement and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex F.
"Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at Bankers Trust Company in New York, New
York, ABA No. 021 001 033, or such other account as may be specified in writing
by Agent as the "Collection Account."
"Commitment" means (a) as to any Lender, the aggregate commitment of
such Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth in Annex J or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders, the aggregate commitment of
all Lenders to make Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Twenty-Nine Million Dollars
($29,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
"Commitment Termination Date" means the earliest of (a) August 15,
2003, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans, and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
"Compliance Certificate" has the meaning assigned to it in Annex E.
"Contracts" means all contracts, undertakings, or agreements (other
than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which such Person may now or hereafter have any right, title or interest,
including any agreement relating to the terms of payment or the terms of
performance of any Account.
"Control Letter" means a letter agreement between Agent and (a) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (b) a securities intermediary with respect to
securities, whether certificated or uncertificated,
A-4
65
securities entitlements and other financial assets held in a securities account
in the name of any Credit Party, (c) a futures commission merchant or clearing
house, as applicable, with respect to commodity accounts and commodity contracts
held by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant, as applicable, disclaims any
security interest in the applicable financial assets, acknowledges the Lien of
Agent, on behalf of itself and Lenders, on such financial assets, and agrees to
follow the instructions or entitlement orders of Agent without further consent
by the affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Person under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyrights" means all of the following now owned or existing or
hereafter adopted or acquired by any Person: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or any territory thereof, or any other country or any
political subdivision thereof; and (b) all reissues, extensions or renewals
thereof.
"Credit Parties" means Borrower, UT Holdings, UT Brokerage, UT
Logistics, UT Services and UT Vanguard.
"Credit Party Guaranty" means the guaranty of even date herewith
executed by each Credit Party (other than of Borrower) in favor of Agent, on
behalf of itself and Lenders, as the same may be amended, supplemented, restated
or otherwise modified from time to time.
"Debt Service" means, with respect to any Person for any fiscal period,
an amount equal to the sum of (a) Interest Expense plus (b) scheduled
amortization of outstanding Indebtedness (including any Capital Leases) plus (c)
cash earn-out payments made with respect to corporate acquisitions, in each case
during such period, but excluding, with respect to Borrower, that portion of any
acquisition debt incurred by Borrower that is paid by Borrower with the cash
proceeds of a permitted capital contribution made by Parent.
"Debt Service Coverage Ratio" means, with respect to any Person for any
period, the ratio of (a) EBITDA less cash taxes paid less the amount of Capital
Expenditures not financed by third-parties, to (b) Debt Service, in each case
during such period.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning assigned to it in Section 1.5(d).
"Deposit Accounts" means any "deposit accounts," as such term is
defined in the Code, now owned or hereafter acquired by any Person, wherever
located.
"Disbursement Account" has the meaning assigned to it in Annex C.
A-5
66
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documents" means any "documents," as such term is defined in the Code,
now owned or hereafter acquired by any Person, wherever located.
"Dollars" or "$" means lawful currency of the United States of America.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (A) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (B) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (C) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (D) any restoration (other than for restorations
relating to cash collections on Accounts that have been specifically reserved
against for non-payment in a prior period) to income of any contingency reserve,
except to the extent that provision for such reserve was made out of income
accrued during such period; (E) any write-up of any asset; (F) any net gain from
the collection of the proceeds of life insurance policies; (G) any net gain
arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of such Person; (H) in the case of a successor to
such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; (I) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary; and (J) the amount of
all fees, costs and expenses incurred by Agent in connection with the
syndication of the Loans (other than in connection with an increase to the
Commitment or a restructure of the Obligations) and reimbursed by Borrower in
accordance with Section 11.3.
A-6
67
"Eligible Accounts" has the meaning assigned to it in Section 1.6.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the Code,
now owned or hereafter acquired by any Person, wherever located, including all
such Person's machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures, together with
all additions and accessions thereto, replacements therefor, all parts therefor,
all substitutes for any of the foregoing, fuel therefor, and all manuals,
drawings, instructions, warranties and rights with respect thereto, and all
products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto.
A-7
68
"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a "substantial employer," as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; (i) the
loss of a Qualified Plan's qualification or tax exempt status; or (j) the
termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning assigned to it in Section 8.1.
"Fair Labor Standards Act" means the provisions of the Fair Labor
Standards Act, 29 U.S.C. Sections 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex
G.
"Financial Statements" means the consolidated and consolidating income
statements,
A-8
69
statements of cash flows and balance sheets of Borrower delivered in accordance
with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrower, ending on April 30, July 31, October 31 and January 31 of each year.
"Fiscal Year" means any of the annual accounting periods of Borrower
ending on January 31, of each year.
"Fixtures" means all "fixtures," as such term is defined in the Code,
now owned or hereafter acquired by any Person, wherever located.
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness of such Person for borrowed money evidenced by notes, bonds,
debentures or similar evidences of Indebtedness that by its terms matures more
than one year from, or is directly or indirectly renewable or extendible at such
Person's option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year from the
date of creation thereof, and specifically including Capital Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrower, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied, as such term is further defined in
Annex G.
"GE Capital" means General Electric Capital Corporation, a New York
corporation.
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Person, including
all right, title and interest that such Person may now or hereafter have in or
under any Contracts, all payment intangibles, Licenses, Copyrights, Trademarks,
Patents, websites, domain names, and all applications therefor and reissues,
extensions or renewals thereof, interests in partnerships, joint ventures and
other business associations, permits, inventions (whether or not patented or
patentable), knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, Goodwill
(including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated and
certificated securities, choses in action, deposit, checking and other bank
accounts, rights to receive tax refunds and other payments, rights to receive
dividends, distributions, cash, instruments and other property in respect of or
in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Person or any computer
bureau or service company from time to time acting for such Person.
A-9
70
"Goods" means any "goods" as such term is defined in the Code, now
owned or hereafter acquired by any Person, wherever located.
"Goodwill" means all goodwill, trade secrets, proprietary or
confidential information, technical information, procedures, formulae, quality
control standards, designs, operating and training manuals, customer lists, and
other General Intangibles now or hereafter owned or acquired by any Person.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business),
or (e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, the Parent Guaranty, the Credit Party
Guaranty, and any other guaranty executed by any Guarantor in favor of Agent and
Lenders in respect of the Obligations.
"Guarantors" means Parent, each Credit Party other than Borrower, and
each other Person, if any, that executes a guaranty or other similar agreement
in favor of Agent, for itself and the benefit of Lenders, in connection with the
transactions contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
A-10
71
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than six months unless being
contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning assigned to it in Section
1.12.
"Index Rate" means:
(a) at all times prior to the Syndication Date, the latest rate for
30-day dealer placed commercial paper (which for purposes hereof shall mean high
grade unsecured notes sold through dealers by major corporations in multiples of
$1,000) that normally is published in the "Money Rates" section of The Wall
Street Journal (or if such rate ceases to be so published, as quoted from such
other generally available and recognizable source as Lender may select).; and
(b) at all times on and after the Syndication Date, for any day, a
floating rate equal to the higher of (i) the rate publicly quoted from time to
time by The Wall Street Journal as the "base rate on corporate loans posted by
at least 75% of the nation's 30 largest banks" at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum.
"Index Rate Loan" means a Loan or any portion thereof bearing interest
by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Person, wherever located, including
all certificated securities, all certificates of deposit, and all notes and
other evidences of indebtedness, other than instruments that constitute, or are
a part of a group of writings that constitute, Chattel Paper.
A-11
72
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks and the Goodwill associated with any of the foregoing.
"Intellectual Property Collateral" means all of the right, title and
interest of any Credit Party, whether presently existing or hereafter arising or
acquired, in, to and under the following:
(a) each Patent owned and Patent application filed by such Person;
(b) each Patent License to which such Person is a party (or the
assignee of a party);
(c) each Trademark owned and Trademark application filed by such
Person;
(d) each Trademark License to which such Person is a party (or the
assignee of a party);
(e) each Copyright owned and Copyright application filed by such
Person;
(f) each Copyright License to which such Person is a party;
(g) the Goodwill associated with each Trademark and Trademark
application, and each of such Person's Trademarks licensed under any Trademark
License; and
(h) all Proceeds of the foregoing, including (i) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to any Person from
time to time with respect to any of the foregoing, (ii) any and all payments (in
any form whatsoever) made or due and payable to any Person from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the foregoing by any Governmental Authority (or
any Person acting under color of Governmental Authority), (iii) any claim of any
Person against third parties for (A) past, present or future infringement of any
Patent or Patent License, (B) past, present or future infringement of any
Copyright, Copyright License, (C) past, present or future infringement or
dilution of any Trademark or Trademark License, or (D) injury to the Goodwill
associated with any Trademark or Trademark License, (iv) any recoveries by any
Person against third parties with respect to any litigation or dispute
concerning any of the foregoing, and (v) any and all other amounts from time to
time paid or payable under or in connection with any of the foregoing, upon
disposition or otherwise.
"Intercompany Notes" has the meaning assigned to it in Section 6.3.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
A-12
73
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that
in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest that has then accrued under the Agreement.
"Inventory" means all "inventory," as such term is defined in the Code,
now owned or hereafter acquired by any Person, wherever located, including
inventory, merchandise, goods and other personal property that are held by or on
behalf of such Person for sale or lease or are furnished or are to be furnished
under a contract of service, or that constitute raw materials, work in process,
finished goods, returned goods, or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed in such Person's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including other supplies and embedded software.
"Investment Property" means all "investment property," as such term is
defined in the Code, now owned or hereafter acquired by any Person, wherever
located, including (a) all securities, whether certificated or uncertificated,
including stocks, bonds, interests in limited liability companies, partnership
interests, treasuries, certificates of deposit, and mutual fund shares, (b) all
securities entitlements of such Person, including the rights of such Person to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to such account, (c) all
securities accounts of such Person, (d) all commodity contracts held by such
Person, and (e) all commodity accounts held by such Person.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning assigned to it in Annex B.
"L/C Sublimit" has the meaning assigned to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement and, if any such Lender shall decide to assign all or any
portion of the Obligations, any assignee of such Lender.
"Letter of Credit Fee" has the meaning assigned to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by Agent or another L/C Issuer or the purchase of
a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such
A-13
74
time or at any time thereafter by Agent or Lenders thereupon or pursuant
thereto.
"Letter of Credit Rights" means any "letter of credit rights," as such
term is defined in the Code, now owned or hereafter acquired by any Person,
including any right to payment under any letter of credit.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrower by any L/C Issuer, and bankers' acceptances
issued by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"LIBOR Business Day" means a Business Day on which banks in the City of
London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding
LIBOR Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR Period shall
end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end two LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a payment
or prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be no more
than five separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined
by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on the second full LIBOR Business Day next preceding the first day
of such LIBOR Period (unless such date is not a
A-14
75
Business Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication)
of the rates (expressed as a decimal fraction) of reserve requirements in effect
on the day that is two LIBOR Business Days prior to the beginning of such LIBOR
Period (including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Federal Reserve Board) that are required to be maintained by
a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrower.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Person.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning assigned to it in Section 3.13.
"Loan Account" has the meaning assigned to it in Section 1.11.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, the Master Documentary Agreement, and
all other agreements, instruments, documents and certificates identified in the
Schedule of Documents executed and delivered to, or in favor of, Agent or any
Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
such Agreement or Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"Loans" means the Revolving Loan and the Swing Line Loan.
"Lock Boxes" has the meaning assigned to it in Annex C.
"Margin Stock" has the meaning assigned to it in Section 3.10.
A-15
76
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Borrower or the Credit Parties considered as a whole, (b) Borrower's ability to
pay any of the Loans or any of the other Obligations in accordance with the
terms of the Agreement, (c) the Collateral or Agent's Liens, on behalf of itself
and Lenders, on the Collateral or the priority of such Liens, or (d) Agent's or
any Lender's rights and remedies under the Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, any event or
occurrence adverse to one or more Credit Parties that results or could
reasonably be expected to result in costs or liabilities in excess of the lesser
of (x) $500,000 and (y) 10% of the lesser of the Maximum Amount and the
Borrowing Base as of any date of determination shall be deemed to constitute a
Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Commitment of all Lenders as of that date.
"Maximum Lawful Rate" has the meaning assigned to it in Section 1.5(f).
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making,
is obligated to make, or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"Net Worth" means, with respect to any Person as of any date of
determination, (a) the book value of the assets of such Person, minus (b)
reserves applicable thereto, minus (c) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"Non-Funding Lender" has the meaning assigned to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes and the Swing Line
Note.
"Notice of Conversion/Continuation" has the meaning assigned to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning assigned to it in
Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
A-16
77
"Overadvance" has the meaning assigned to it in Section 1.1(a)(iii).
"Parent" means UTi Worldwide, Inc., a British Virgin Islands
corporation.
"Parent Guaranty" means the guaranty of even date herewith executed by
Parent in favor of Agent and Lenders, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Parent Indebtedness" means the Indebtedness owing by Borrower to UT
Holdings consisting, immediately prior to the making of the initial Revolving
Credit Advance, of intercompany loans in an aggregate amount equal to
$12,300,000.
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Person granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which any Person now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"Patent, Trademark and Copyright Security Agreement" means the Patent,
Trademark and Copyright Security Agreement made in favor of Agent, on behalf of
itself and Lenders, by each applicable Credit Party.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $250,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto; (i) Liens existing on the Closing Date and listed in Disclosure
Schedule 6.7 securing the
A-17
78
Indebtedness described in Disclosure Schedule 6.3 and permitted refinancings,
extensions and renewals thereof, including extensions or renewals of any such
Liens, provided that the principal amount of the Indebtedness so secured is not
increased and the Lien does not attach to any other property; (j) presently
existing or hereafter created Liens in favor of Agent, on behalf of Lenders; and
(k) Liens created after the Closing Date, whether by conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness, with respect to Equipment and Fixtures acquired by
any Credit Party in the ordinary course of business, involving the incurrence of
an aggregate amount of purchase money Indebtedness and Capital Lease Obligations
outstanding at any time of not more than, during any Fiscal Year, the amount of
permitted Capital Expenditures and purchase money Indebtedness for such Fiscal
Year as set forth in paragraph (a) of Annex G (provided, in each case, that such
Liens attach only to the assets subject to such purchase money debt and such
Indebtedness is incurred within 20 days following such purchase and does not
exceed 100% of the purchase price of the subject assets).
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan" means, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to, or has maintained,
contributed to or had an obligation to contribute to at any time within the past
seven years on behalf of participants who are or were employed by any Credit
Party or any ERISA Affiliate.
"Pledge Agreement" means the Pledge Agreement of even date herewith
executed by each Credit Party in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of held by such Credit Party and all Intercompany
Notes owing to or held by such Credit Party, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Prior Lender" collectively means The Bank of New York and Nedcor Bank
Limited.
"Prior Lender Obligations" means all of each Credit Party's obligations
(a) to The Bank of New York arising under the $8,275,000 line of credit extended
to Borrower and the $4,000,000 line of credit extended to UT Holdings, and (b)
to Nedcor Bank Limited arising under the Guarantee and Indemnity dated as of
July 5, 1996, including in each case all other agreements, documents and
instruments executed by the Credit Parties in connection therewith.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Person from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Person from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting under color of
governmental authority), (c) any claim of any Person against third parties (i)
for past, present or future infringement of any Patent or Patent License, or
(ii) for past, present or future infringement or dilution of any Copyright,
Copyright License, Trademark or Trademark License, or for injury to the Goodwill
associated with any
A-18
79
Trademark or Trademark License, (d) any recoveries by any Person against third
parties with respect to any litigation or dispute concerning any of the
Collateral, (e) dividends, interest, distributions and Instruments with respect
to Investment Property or pledged Stock, and (f) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral,
upon disposition or otherwise.
"Projections" means Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a Subsidiary-by-
Subsidiary or division-by-division basis, if applicable, and otherwise
consistent with the historical Financial Statements of Borrower, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means, with respect to all matters relating to any
Lender, the percentage obtained by dividing the Commitment of such Lender, by
the aggregate Commitments of all Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided, that no
Person determined by Agent to be acting in the capacity of a vulture fund or
distressed debt purchaser shall be a Qualified Assignee, and no Person (other
than a Person that is already a Lender) holding Stock issued by any Credit Party
shall be a Qualified Assignee.
"Real Estate" has the meaning assigned to it in Section 3.6.
"Refinancing" means the repayment in full by Borrower of the Prior
Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning assigned to it in Section
1.1(b)(iii).
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
A-19
80
"Requisite Lenders" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of all of the Loans.
"Reserves" means reserves established pursuant to Section 5.4(c) and
such other reserves against Eligible Accounts or Borrowing Availability that
Agent may, in its reasonable credit judgment, establish from time to time.
Without limiting the generality of the foregoing, Reserves established to ensure
the payment of accrued Interest Expenses or Indebtedness shall be deemed to be a
reasonable exercise of Agent's credit judgment.
"Restricted Payment" means, with respect to any Credit Party: (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire Stock of such Credit Party now or hereafter outstanding; (d) any payment
of a claim for the rescission of the purchase or sale of, or for material
damages arising from the purchase or sale of, any shares of such Credit Party's
Stock or of a claim for reimbursement, indemnification or contribution arising
out of or related to any such claim for damages or rescission; (e) any payment,
loan, contribution, or other transfer of funds or other property to any
Stockholder of such Credit Party other than payment of compensation in the
ordinary course of business to Stockholders who are employees of such Credit
Party; and (f) any payment of management fees (or other fees of a similar
nature) by such Credit Party to any Stockholder of such Credit Party or its
Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that provides
for continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" has the meaning assigned to it in Section
1.1(a)(i).
"Revolving Loan" means, at any time, the sum of (a) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (b) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan includes the outstanding balance of Letter of Credit
Obligations.
"Revolving Note" has the meaning assigned to it in Section 1.1(a)(ii).
"Schedule of Documents" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Securities Act" means the provisions of the Securities Act of 1933, 15
U.S.C. Sections 77a et seq.
A-20
81
"Securities Exchange Act" means the provisions of the Securities
Exchange Act of 1934, 15 U.S.C. Sections 78a et seq.
"Security Agreement" means the Security Agreement of even date herewith
entered into by and among Agent, on behalf of itself and Lenders, and each
Credit Party that is a signatory thereto.
"Solvent" means, with respect to any Person on a particular date, that
on such date: (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person or one or more Subsidiaries of such Person shall
have an interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50% or of which any such Person is a general
partner or may exercise the powers of a general partner. Unless the context
otherwise requires, each reference to a Subsidiary shall be a reference to a
Subsidiary of a Borrower.
"Supermajority Lenders" means Lenders having (a) 80% or more of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, 80%
or more of the
A-21
82
aggregate outstanding amount of the Revolving Loan (with the Swing Line Loan
being attributed to the Lender making such Loan) and Letter of Credit
Obligations.
"Supporting Obligations" means any "supporting obligations," as such
term is defined in the Code, now owned or hereafter acquired by any Person.
"Swing Line Advance" has the meaning assigned to it in Section
1.1(b)(i).
"Swing Line Availability" has the meaning assigned to it in Section
1.1(b)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Advances as set forth in
Annex J, which commitment constitutes a subfacility of the Commitment of the
Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means at any time, the aggregate amount of Swing Line
Advances outstanding to Borrower.
"Swing Line Note" has the meaning assigned to it in Section 1.1(b)(ii).
"Syndication Date" means the date, if any, that the primary syndication
of the Revolving Loan is completed, as determined by Agent.
"Tangible Net Worth" means, with respect to any Person at any date, the
Net Worth of such Person at such date, excluding, however, from the
determination of the total assets at such date, (a) all goodwill, capitalized
organizational expenses, capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other intangible items, (b) all unamortized debt
discount and expense, (c) treasury Stock, and (d) any write-up in the book value
of any asset resulting from a revaluation thereof.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business, or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged, (c) all Letter of
Credit Obligations have been cash collateralized, cancelled or backed by
stand-by letters of credit in accordance with Annex B, and (d) Borrower shall
not have any further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan)
that is covered by Title IV of ERISA and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to, or
has maintained, contributed to or had an obligation to contribute to at any time
within the last seven years, on behalf of participants who are or were employed
by any of them.
A-22
83
"Trademark License" means rights under any written agreement now owned
or hereafter acquired by any Person granting any right to use any Trademark.
"Trademarks" means all of the following now owned or hereafter
existing, adopted or acquired by any Person: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Unfunded Pension Liability" shall means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five years following a
transaction that might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"UT Holdings" means Union-Transport (U.S.) Holdings, Inc., a Delaware
corporation.
"UT Brokerage" means Union-Transport Brokerage Corp., a California
corporation.
"UT Logistics" means Union-Transport Logistics, Inc., a Delaware
corporation.
"UT Receivables Purchase Agreement" means that certain Receivables
Purchase Agreement of even date herewith between Borrower, UT Brokerage, UT
Logistics and UT Vanguard, in form and substance acceptable to Agent, pursuant
to which UT Brokerage, UT Logistics and UT Vanguard shall assign, sell and
transfer all of their respective Accounts to Borrower, and pursuant to which
Borrower shall service, administer and collect such Accounts.
"UT Services" means UT Services, Inc., a California corporation.
"UT Vanguard" means Vanguard Cargo Systems, Inc., a New York
corporation.
"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or any other Loan Document shall be as set forth in Annex G. All other
undefined terms contained in any of the Loan Documents shall, unless the context
indicates otherwise, have the meanings provided for by the Code as in effect in
the State of New York to the extent the same are used or defined therein. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
section,
A-23
84
subsection or clause refer to such section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
X-00
00
XXXXX X (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
included Section 1.2 thereof, Agent and Lenders agree to incur, from time to
time prior to the Commitment Termination Date, upon the request of Borrower and
for Borrower's account, Letter of Credit Obligations by causing Letters of
Credit to be issued by GE Capital or a Subsidiary thereof or a bank or other
legally authorized Person selected by or acceptable to Agent in its sole
discretion (each, an "L/C Issuer") for Borrower's account and guaranteed by
Agent; provided, that if the L/C Issuer is a Lender, then such Letters of Credit
shall not be guaranteed by Agent but rather each Lender shall, subject to the
terms and conditions hereinafter set forth, purchase (or be deemed to have
purchased) risk participations in all such Letters of Credit issued with the
written consent of Agent, as more fully described in paragraph (b)(ii) below.
The aggregate amount of all such Letter of Credit Obligations shall not at any
time exceed the lesser of (i) $500,000 (the "L/C Sublimit"), and (ii) the
Borrowing Base, in each case less the sum of the aggregate Revolving Credit
Advances and Swing Line Loan then outstanding. No such Letter of Credit shall
have an expiry date that is more than one year following the date of issuance
thereof, unless otherwise determined by Agent, in its sole discretion, and
neither Agent nor Lenders shall be under any obligation to incur Letter of
Credit Obligations in respect of, or purchase risk participations in, any Letter
of Credit having an expiry date that is later than the Commitment Termination
Date.
(b) Advances Automatic; Participations.
(i) In the event that Agent or any Lender shall make any
payment on or pursuant to any Letter of Credit Obligation, such payment shall
then be deemed automatically to constitute a Revolving Credit Advance under
Section 1.1(a) regardless of whether a Default or Event of Default has occurred
and is continuing and notwithstanding Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Lender to make available to Agent for Agent's own account its Pro Rata
Share of any such Revolving Credit Advance or payment by Agent under or in
respect of a Letter of Credit shall not relieve any other Lender of its
obligation hereunder to make available to Agent its Pro Rata Share thereof, but
no Lender shall be responsible for the failure of any other Lender to make
available such other Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default described in Sections 8.1(h) or (i) or otherwise or if it
shall be illegal or unlawful for any Lender to be deemed to have assumed a
ratable share of the reimbursement obligations owed to an L/C Issuer, or if the
L/C Issuer is a Lender, then (A) immediately and without further action
whatsoever, each Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation equal to such Lender's Pro Rata Share (based on the
Commitments) of the Letter of Credit Obligations in respect of all Letters of
B-1
86
Credit then outstanding and (B) thereafter, immediately upon issuance of any
Letter of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Lender's Pro Rata Share (based on
the Commitments) of the Letter of Credit Obligations with respect to such Letter
of Credit on the date of such issuance. Each Lender shall fund its participation
in all payments or disbursements made under the Letters of Credit in the same
manner as provided in the Agreement with respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrower is required to provide cash collateral for any
Letter of Credit Obligations pursuant to the Agreement prior to the Commitment
Termination Date, Borrower will pay to Agent for the ratable benefit of itself
and Lenders cash or cash equivalents acceptable to Agent ("Cash Equivalents") in
an amount equal to 105% of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding. Such funds or Cash Equivalents
shall be held by Agent in a cash collateral account (the "Cash Collateral
Account") maintained at a bank or financial institution acceptable to Agent. The
Cash Collateral Account shall be in the name of Borrower and shall be pledged
to, and subject to the control of, Agent, for the benefit of Agent and Lenders,
in a manner satisfactory to Agent. Borrower hereby pledges and grants to Agent,
on behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then
due and payable, shall for any reason be outstanding on the Commitment
Termination Date, Borrower shall either (A) provide cash collateral therefor in
the manner described above, (B) cause all such Letters of Credit to be canceled
and returned, or (C) deliver a stand-by letter (or letters) of credit in
guarantee of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus 30 additional days)
as, and in an amount equal to 105% of the aggregate maximum amount then
available to be drawn under, the Letters of Credit to which such outstanding
Letter of Credit Obligations relate, and shall be issued by a Person, and shall
be subject to such terms and conditions, as are be satisfactory to Agent in its
sole discretion.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order as
Agent may elect, as shall be or shall become due and payable by Borrower to
Lenders with respect to such Letter of Credit Obligations of Borrower and, upon
the satisfaction in full of all Letter of Credit Obligations of Borrower, to any
other Obligations then due and payable.
(iv) Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Agent or Lenders in respect thereof, any funds
B-2
87
remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations, any remaining
amount shall be paid to Borrower or as otherwise required by law. Interest
earned on deposits in the Cash Collateral Account shall be for the account of
Agent.
(d) Fees and Expenses. Borrower agrees to pay (i) to Agent for the
benefit of Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (A) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (B) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
Fee (the "Letter of Credit Fee") in an amount equal to the Applicable L/C Margin
from time to time in effect multiplied by the maximum amount available from time
to time to be drawn under the applicable Letter of Credit, which Letter of
Credit Fee shall be paid to Agent for itself and the ratable benefit of the
Lenders in arrears, on the first day of each month and on the Termination Date,
and (ii) to any L/C Issuer, on demand, such fees (including all per annum fees),
charges and expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
shall give Agent at least two Business Days' prior written notice requesting the
incurrence of any Letter of Credit Obligation. The notice shall be accompanied
by the form of the Letter of Credit (which shall be acceptable to the L/C
Issuer) and a completed Application for Standby Letter of Credit or Application
and Agreement for Documentary Letter of Credit in form and substance
satisfactory to Agent. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrower and approvals by Agent and
the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrower,
Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to reimburse Agent
and Lenders for payments made with respect to any Letter of Credit Obligation
shall be absolute, unconditional and irrevocable, without necessity of
presentment, demand, protest or other formalities, and the obligations of each
Lender to make payments to Agent with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of Borrower and Lenders shall be
paid strictly in accordance with the terms hereof under all circumstances,
including the following:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other
right that Borrower or any of its Affiliates or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such transferee may be acting), Agent, any Lender, or
any other Person, whether in connection with the Agreement, the Letter of
Credit, the transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between Borrower or any of its
Affiliates and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under
B-3
88
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Agent (except as otherwise expressly provided
in paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit or such
guaranty;
(v) any other circumstance or event whatsoever, that is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in
the Agreement, Borrower hereby agrees to pay and to protect, indemnify, and save
harmless Agent and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) that Agent or any
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent or any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority, in each case other than
to the extent solely as a result of the gross negligence or willful misconduct
of Agent or such Lender (as finally determined by a court of competent
jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by, beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law, neither
Agent nor any Lender shall be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided, that in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the demand
for payment under such Letter of Credit or guaranty thereof complies on its face
with any applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (D) errors,
B-4
89
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they may be in
cipher; (E) errors in interpretation of technical terms; (F) any loss or delay
in the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) any consequences arising from causes beyond
the control of Agent or any Lender. None of the above shall affect, impair, or
prevent the vesting of any of Agent's or any Lender's rights or powers hereunder
or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrower in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between Borrower and such L/C Issuer,
including an Application and Agreement For Documentary Letter of Credit, a
Master Documentary Agreement and a Master Standby Agreement entered into with
Agent.
B-5
