Exhibit 10.4
LOAN AND SECURITY AGREEMENT
DATED AS OF OCTOBER 31, 2006
among
CS ACQUISITION CORP.
XXXXXXX INDUSTRIES, INC.
XXXXXXX BUS CORPORATION
WHEELED COACH INDUSTRIES, INC.
CAPACITY OF TEXAS, INC.
MID BUS, INC.
and
MOBILE PRODUCTS, INC.
as Borrowers,
The GUARANTORS named herein,
and
ORIX FINANCE CORP.,
as Agent and as a Lender, and
The Financial Institution(s) Listed
on the Signature Pages Hereof,
as Lenders
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS 1
1.1. Certain Defined Terms.................................................1
1.2. UCC Defined Terms....................................................17
1.3. Accounting Terms.....................................................17
1.4. Other Definitional Provisions........................................18
SECTION 2 LOANS AND COLLATERAL 18
2.1. Loans................................................................18
(A) [Intentionally Omitted]........................................18
(B) [Intentionally Omitted]........................................18
(C) Term Loan......................................................18
(D) [Intentionally Omitted]........................................18
(E) Notes..........................................................18
(F) [Intentionally Omitted]........................................18
(G) [Intentionally Omitted]........................................18
(H) [Intentionally Omitted]........................................18
2.2. Interest.............................................................19
(A) Rate of Interest...............................................19
(B) Computation and Payment of Interest............................19
(C) Interest Laws..................................................19
(D) Conversion or Continuation.....................................20
2.3. Fees.................................................................21
(A) Arrangement Fee................................................21
(B) Prepayment Fees................................................21
(C) [Intentionally Omitted]........................................21
(D) [Intentionally Omitted]........................................21
(E) [Intentionally Omitted]........................................21
(F) Other Fees and Expenses........................................21
(G) [Intentionally Omitted]........................................21
2.4. Payments and Prepayments.............................................21
(A) Manner and Time of Payment.....................................21
(B) Mandatory Prepayments..........................................22
(1) [Intentionally Omitted]........................................22
(2) Prepayments from Proceeds of Asset Dispositions................22
(3) [Intentionally Omitted]........................................22
(4) Prepayments from Issuance of Securities........................22
(5) Prepayments from Tax Refunds. .................................22
(6) Prepayments from Payments Received from the
Disbursing Agent...............................................23
(C) Voluntary Prepayments and Repayments...........................23
(D) Payments on Business Days......................................23
(E) Application of Prepayment Proceeds.............................23
2.5. Term of this Agreement...............................................23
2.6. Statements...........................................................23
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2.7. Grant of Security Interest...........................................23
(A) Grant of Liens in the Collateral...............................23
(B) Loan Parties Remain Liable.....................................24
2.8. Yield Protection.....................................................24
(A) Capital Adequacy and Other Adjustments.........................24
(B) Increased LIBOR Funding Costs..................................25
2.9. Taxes................................................................25
(A) No Deductions..................................................25
(B) Changes in Tax Laws............................................25
(C) Foreign Lenders................................................26
(D) Mitigation.....................................................26
2.10. Required Termination and Prepayment..................................27
2.11. Optional Prepayment/Replacement of Lenders...........................27
(A) Replacement of an Affected Lender..............................27
(B) Prepayment of an Affected Lender...............................27
2.12. Compensation.........................................................27
2.13. Booking of LIBOR Loans...............................................28
2.14. Assumptions Concerning Funding of LIBOR Loans........................28
2.15. Endorsement; Insurance Claims........................................28
SECTION 3 CONDITIONS TO LOANS 28
3.1. Closing Date.........................................................28
(A) Closing Deliveries.............................................28
(B) Security Interests.............................................29
(C) Closing Date Availability......................................29
(D) Representations and Warranties.................................29
(E) Fees...........................................................29
(F) No Default.....................................................29
(G) Performance of Agreements......................................29
(H) No Prohibition.................................................29
(I) No Litigation..................................................29
(J) Delivery of Merger Documents...................................29
(K) First Lien Debt................................................30
(L) Equity Contribution............................................30
(M) Collateral Audit...............................................30
(N) Management Meetings............................................30
(O) Environmental Audit and Assessment.............................31
(P) Insurance......................................................31
(Q) Financial Information..........................................31
(R) Material Adverse Change........................................31
(S) Federal and Missouri State Law Compliance......................31
(T) Solvency.......................................................31
(U) Management Agreement...........................................31
(V) Structure of Loan Parties......................................31
(W) Federal Compliance.............................................31
(X) Intercreditor Agreements.......................................31
(Y) Repayment of Existing Indebtedness.............................31
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(Z) Trust Agreement................................................32
(AA) Warranty Plans.................................................32
3.2. [Intentionally Omitted]..............................................32
SECTION 4 REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS 32
4.1. Organization, Powers, Capitalization.................................32
(A) Organization and Powers........................................32
(B) Capitalization.................................................32
4.2. Authorization of Borrowing, No Conflict..............................33
4.3. Financial Condition..................................................33
4.4. Indebtedness and Liabilities.........................................33
4.5. Collateral Warranties and Covenants..................................34
(A) Accounts Warranties and Covenants..............................34
(B) Inventory Warranties and Covenants.............................34
(C) Equipment Warranties and Covenants.............................34
(D) Chattel Paper Warranties and Covenants.........................35
(E) Instruments Warranties and Covenants...........................35
(F) Investment Property Warranties and Covenants...................35
(G) Letters of Credit Warranties and Covenants.....................35
(H) General Intangibles Warranties and Covenants...................36
(I) Intellectual Property Warranties and Covenants.................36
(J) Commercial Tort Claims Warranties and Covenants................36
(K) Deposit Accounts; Bank Accounts Warranties and Covenants.......37
(L) Bailees........................................................37
(M) Collateral Description; Use of Collateral......................37
(N) Collateral Filing Requirements; Collateral Records.............37
(O) Federal Claims.................................................37
(P) Agent Authorized...............................................38
(Q) Invoices.......................................................38
4.6. Names and Locations..................................................38
4.7. Title to Properties; Liens...........................................38
4.8. Litigation; Adverse Facts............................................40
4.9. Payment of Taxes.....................................................40
4.10. Performance of Agreements............................................40
4.11. Employee Benefit Plans...............................................41
4.12. Broker's Fees........................................................42
4.13. Environmental Compliance.............................................42
4.14. Solvency.............................................................42
4.15. Disclosure...........................................................42
4.16. Insurance............................................................42
4.17. Compliance with Laws; Government Authorizations; Consents............43
4.18. Employee Matters.....................................................43
4.19. Governmental Regulation..............................................44
4.20. Access to Accountants and Management.................................44
4.21. Inspection...........................................................44
4.22. [Intentionally Omitted]..............................................44
4.23. Payment of Taxes by Agent............................................44
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4.24. Amendment of Schedule................................................44
SECTION 5 REPORTING AND OTHER AFFIRMATIVE COVENANTS 45
5.1. Financial Statements and Other Reports...............................45
5.2. Maintenance of Properties............................................45
5.3. Further Assurances...................................................45
5.4. Mortgages; Title Insurance; Surveys..................................45
(A) Title Insurance................................................45
(B) Additional Mortgaged Property..................................45
(C) Surveys........................................................46
(D) Additional Real Property Deliveries............................46
5.5. Use of Proceeds and Margin Security..................................46
5.6. Maintenance of Properties............................................46
5.7. [Intentionally Omitted]..............................................46
5.8. 46
5.9. Additional Collateral................................................47
SECTION 6 FINANCIAL COVENANTS 47
SECTION 7 NEGATIVE COVENANTS 47
7.1. Indebtedness and Liabilities.........................................47
7.2. Guaranties...........................................................48
7.3. Transfers, Liens and Related Matters.................................48
(A) Transfers......................................................48
(B) Liens..........................................................48
(C) No Negative Pledges............................................48
(D) No Restrictions on Subsidiary Distributions to Loan Parties....49
7.4. Investments and Loans................................................49
7.5. Restricted Payments..................................................49
7.6. Restriction on Fundamental Changes...................................50
7.7. Changes Relating to First Lien Debt..................................50
7.8. Transactions with Affiliates.........................................50
7.9. Conduct of Business..................................................50
7.10. Tax Consolidations...................................................50
7.11. Subsidiaries.........................................................51
7.12. Fiscal Year; Tax Designation.........................................51
7.13. Press Release; Public Offering Materials.............................51
7.14. [Intentionally Omitted]..............................................51
7.15. IRS Form 8821........................................................51
SECTION 8 DEFAULT, RIGHTS AND REMEDIES 51
8.1. Event of Default.....................................................51
(A) Payment........................................................51
(B) Default in Other Agreements....................................51
(C) Breach of Certain Provisions...................................51
(D) Breach of Warranty.............................................51
(E) Other Defaults Under Loan Documents............................52
(F) Change in Control..............................................52
(G) Involuntary Bankruptcy; Appointment of Receiver, etc...........52
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(H) Voluntary Bankruptcy; Appointment of Receiver, etc.............52
(I) Liens..........................................................53
(J) Judgment, Attachments and Litigation...........................53
(K) Dissolution....................................................53
(L) Solvency.......................................................53
(M) Injunction.....................................................53
(N) Invalidity of Loan Documents...................................53
(O) Failure of Security............................................53
(P) Damage, Strike, Casualty.......................................53
(Q) Licenses and Permits...........................................54
(R) Forfeiture.....................................................54
(S) Merger.........................................................54
(T) [AIP Management Agreement/Shareholder's Agreement..............54
(U) Intercreditor Agreement........................................54
8.2. [Intentionally Omitted]..............................................54
8.3. Acceleration.........................................................54
8.4. Remedies.............................................................54
8.5. Appointment of Attorney-in-Fact......................................55
8.6. Limitation on Duty of Agent and Lenders with Respect to Collateral...55
8.7. Application of Proceeds..............................................56
8.8. License of Intellectual Property.....................................56
8.9. Waivers; Non-Exclusive Remedies......................................56
SECTION 9 AGENT 57
9.1. Agent................................................................57
(A) Appointment....................................................57
(B) Nature of Duties...............................................57
(C) Rights, Exculpation, Etc.......................................57
(D) Reliance.......................................................58
(E) Indemnification................................................58
(F) ORIX Individually..............................................59
(G) Successor Agent................................................59
(1) Resignation..............................................59
(2) Appointment of Successor.................................59
(3) Successor Agent..........................................59
(H) Collateral Matters.............................................59
(1) Release of Collateral....................................59
(2) Confirmation of Authority; Execution of Releases.........60
(3) Absence of Duty..........................................60
(I) Agency for Perfection..........................................60
(J) Exercise of Remedies...........................................61
9.2. Notice of Default....................................................61
9.3. Action by Agent......................................................61
9.4. Amendments, Waivers and Consents.....................................61
(A) Percentage of Lenders Required.................................61
(B) Specific Purpose or Intent.....................................62
(C) Failure to Give Consent; Replacement of Non-Consenting Lender..62
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9.5. Assignments..........................................................63
(A) Assignments....................................................63
(B) [Intentionally Omitted]........................................63
(C) No Relief of Obligations; Cooperation;
Ability to Make LIBOR Loans....................................63
(D) Security Interests; Assignment to Affiliates...................63
(E) Recording of Assignments.......................................64
9.6. Set Off and Sharing of Payments......................................64
9.7. [Intentionally Omitted]..............................................64
9.8. Settlements, Payments and Information................................64
(A) Fee Payments...................................................65
(1) [Intentionally Omitted]..................................65
(2) [Intentionally Omitted]..................................65
(3) Settlement Definitions...................................65
(4) Settlement Payments......................................65
(B) Term Loan Principal Payments...................................66
(C) Return of Payments.............................................66
(1) Recovery after Non-Receipt of Expected Payment...........66
(2) Recovery of Returned Payment.............................66
9.9. [Intentionally Omitted]..............................................66
SECTION 10 BORROWING AGENCY 66
10.1. Borrowing Agency Provisions..........................................66
(A) Designation of Borrowing Agent.................................66
(B) Indemnifications...............................................66
(C) Obligations Absolute...........................................67
(D) Waivers........................................................67
10.2. Waiver of Subrogation................................................68
10.3. Interdependent Companies.............................................68
SECTION 11 GUARANTY 68
11.1. Unconditional Guaranty...............................................68
11.2. Taxes................................................................69
11.3. Waivers of Notice, Demand, etc.......................................69
11.4. No Invalidity, Irregularity, etc.....................................69
11.5. Independent Liability................................................69
11.6. Indemnity............................................................70
11.7. Liability Absolute...................................................70
11.8. Action by Agent Without Notice.......................................71
11.9. Application of Proceeds..............................................71
11.10. Continuing Effectiveness.............................................71
(A) Reinstatement..................................................71
(B) No Marshalling.................................................72
(C) Priority of Claims.............................................72
(D) Invalidated Payments...........................................72
(E) Assignment and Waiver..........................................72
(F) Payments to Guarantors.........................................72
11.11. Enforcement..........................................................73
11.12. Statute of Limitations...............................................73
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11.13. Interest.............................................................73
11.14. Currency Conversion..................................................73
11.15. Acknowledgement......................................................74
11.16. Continuing Effectiveness.............................................74
11.17. [Intentionally Omitted]..............................................74
SECTION 12 MISCELLANEOUS 74
12.1. Expenses and Attorneys' Fees.........................................74
12.2. Indemnity............................................................75
12.3. Notices..............................................................75
12.4. Survival of Representations and Warranties and Certain Agreements....76
12.5. Indulgence Not Waiver................................................77
12.6. Marshaling; Payments Set Aside.......................................77
12.7. Entire Agreement.....................................................77
12.8. Severability.........................................................77
12.9. Lenders' Obligations Several; Independent Nature of Lenders' Rights..77
12.10. Headings.............................................................77
12.11. APPLICABLE LAW.......................................................78
12.12. Successors and Assigns...............................................78
12.13. No Fiduciary Relationship; No Duty; Limitation of Liabilities........78
(A) No Fiduciary Relationship......................................78
(B) No Duty........................................................78
(C) Limitation of Liabilities......................................78
12.14. CONSENT TO JURISDICTION..............................................78
12.15. WAIVER OF JURY TRIAL.................................................79
12.16. Construction.........................................................79
12.17. Counterparts; Effectiveness..........................................79
12.18. Confidentiality......................................................80
12.19. Publication..........................................................80
12.20. Special Provisions Relating to Xxxxxxx and its Subsidiaries..........80
12.21. Intercreditor Agreement .............................................81
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is dated as of October 31, 2006 and
entered into among CS ACQUISITION CORP., a Missouri corporation ("CS
Acquisition"), XXXXXXX INDUSTRIES, INC., a Missouri corporation ("Xxxxxxx"),
XXXXXXX BUS CORPORATION, a Kansas corporation ("Bus"), WHEELED COACH INDUSTRIES,
INC., a Florida corporation ("WCI"), CAPACITY OF TEXAS, INC., a Texas
corporation ("Capacity"), MID BUS, INC., an Ohio corporation ("Mid Bus"), MOBILE
PRODUCTS, INC., a Kansas corporation ("Mobile Products", and together with CS
Acquisition, Xxxxxxx, Bus, WCI, Capacity, and Mid Bus, each a "Borrower" and
collectively "Borrowers"), the Guarantors signatory hereto, the financial
institution(s) listed on the signature pages hereof and their respective
successors and assigns (each individually a "Lender" and collectively "Lenders")
and ORIX FINANCE CORP., a Delaware corporation (in its individual capacity,
"ORIX"), for itself as a Lender and as Agent.
WHEREAS, Borrowers desire that Lenders extend a credit facility to
finance a portion of the Merger Consideration for the merger of CS Acquisition
with and into Xxxxxxx, with Xxxxxxx being the surviving corporation of such
merger (the "Merger"), to refinance existing indebtedness of Borrowers and to
provide working capital financing and to provide funds for other general
corporate purposes; and
WHEREAS, to secure each Loan Party's obligations under the Loan
Documents, Loan Parties are granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of Loan Parties' real and
personal property; and
WHEREAS, each entity listed on the signature pages hereto as a
"Guarantor" (each a "Guarantor" and collectively, the "Guarantors") is willing
to guaranty all (or part) of the Obligations of Borrowers to Agent and Lenders
under the Loan Documents and to grant to Agent, for the benefit of Agent and
Lenders, a security interest in all real and personal property of such Guarantor
to secure such guaranty;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Guarantors, Agent and
Lenders agree as follows:
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS
1.1. CERTAIN DEFINED TERMS. The capitalized terms not otherwise defined
in this Agreement shall have the meanings set forth below:
"Additional Mortgaged Property" means all real property owned or leased
by any Loan Party in which, after the Closing Date, Agent requires a mortgage to
secure the Obligations.
"Affected Lender" has the meaning assigned to that term in subsection
2.11.
"Affiliate" means any Person (other than Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
any Loan Party; (b) directly or indirectly owning or holding five percent (5%)
or more of any Equity Interest in any Loan Party; (c) five percent (5%) or more
of whose stock or other Equity Interest having ordinary voting power for the
election of directors or the power to direct or cause the direction of
management, is directly or indirectly owned or held by any Loan Party; or (d)
which has a senior officer who is also a senior officer of any Loan Party. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by" and "under common control with") means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
Equity Interests, or by contract or otherwise.
"Agent" means ORIX in its capacity as agent for the Lenders under the
Loan Documents and any successor in such capacity appointed pursuant to
subsection 9.1(G).
"Agent's Account" means the following Deposit Account of Agent:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania
ABA No. 000-000-000
Account Name ORIX Finance Corp.
Account No. 008-0215
Reference: Xxxxxxx Industries, Inc.
"Agreement" means this Loan and Security Agreement as it may be
amended, restated, supplemented or otherwise modified from time to time.
"AIP" means AIP IV LLC, a Delaware limited liability company.
"AIP/CHC" means AIP/CHC Holdings, LLC, a Delaware limited liability
company.
"AIP Management Agreement" has the meaning assigned to that term in
subsection 3(U).
"Applicable Margin" for each type of Loan shall mean the applicable
percentage specified below:
TYPE OF LOAN APPLICABLE MARGIN APPLICABLE MARGIN FOR
FOR BASE RATE LOANS LIBOR RATE LOANS
------------ ----------------- ---------------------
Term Loan and any 4.25% 6.25%
other Obligations
"Asset Disposition" means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, of any or all of
the assets of any Loan Party other than (i) sales of Inventory in the ordinary
course of business and collections of Accounts arising out of the sale of
Inventory in the ordinary course of business and (ii) the Insurance
Monetization.
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"Assignment and Acceptance Agreement" shall mean an Assignment and
Acceptance Agreement substantially in the form of Exhibit A.
"Base Rate" means a variable rate of interest per annum equal to the
higher of (a) the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor publication of the Federal Reserve System reporting the Bank Prime
Loan rate or its equivalent, or (b) the Federal Funds Effective Rate plus fifty
(50) basis points. The statistical release generally sets forth a Bank Prime
Loan rate for each Business Day. The applicable Bank Prime Loan rate for any
date not set forth shall be the rate set forth for the last preceding date. In
the event the Board of Governors of the Federal Reserve System ceases to publish
a Bank Prime Loan rate or its equivalent, the term "Base Rate" shall mean a
variable rate of interest per annum equal to the highest of the "prime rate",
"reference rate", "base rate", or other similar rate announced from time to time
by any of the three largest banks (based on combined capital and surplus)
headquartered in New York, New York (with the understanding that any such rate
may merely be a reference rate and may not necessarily represent the lowest or
best rate actually charged to any customer by any such bank).
"Base Rate Loans" means the Term Loans during any periods that the Term
Loans bear interest at rates determined by reference to the Base Rate.
"BNS" means BNS Holding, Inc., a Delaware corporation.
"Borrower" and "Borrowers" have the meaning assigned to such terms in
the introductory paragraph of this Agreement, and after the effectiveness of the
Merger shall include Xxxxxxx as survivor of the Merger.
"Borrowing Agent" means CS Acquisition, and after the effectiveness of
the Merger shall mean Xxxxxxx, as survivor of the Merger.
"Borrowing Base Certificate" means a certificate and schedule duly
executed by an officer of Borrowing Agent appropriately completed and in
substantially the form of Exhibit B.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York or Michigan or
is a day on which banking institutions located in any such state are closed, or
for the purposes of LIBOR Loans only, a London Banking Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures for, or contracts for expenditures with respect to any fixed assets
or improvements, or for replacements, substitutions or additions thereto, that,
in accordance with GAAP, either would be required to be capitalized on the
balance sheet of such Person, or would be classified and accounted for as
capital expenditures on a statement of cash flows of such Person.
"Capital Lease" means any lease of any property (whether real, personal
or mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
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"Cash Interest Expense" means, without duplication, for any period, for
Loan Parties: interest expenses deducted in the determination of net income
(excluding (a) the amortization of fees and costs with respect to the
transactions contemplated by this Agreement which have been capitalized as
transaction costs in accordance with the provisions of subsection 1.3; and (b)
interest paid in kind).
"Certificate of Exemption" has the meaning assigned to that term in
subsection 2.9(C).
"Charges" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other Governmental Authority,
domestic or foreign (including, without limitation, the PBGC or any
environmental agency or superfund), upon the Collateral, the Loan Parties or any
of their Affiliates.
"Closing Date" means October 31, 2006.
"Collateral" has the meaning assigned to that term in subsection
2.7(A).
"Xxxxxxx" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"Commitment" or "Commitments" means the Term Loan Commitment or Term
Loan Commitments.
"Compliance Certificate" means a certificate duly executed by the chief
executive officer or chief financial officer of Borrowing Agent appropriately
completed and in substantially the form of Exhibit C.
"Control" means "control" as defined in the UCC with respect to a
particular item of Collateral.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by each Loan Party to Agent, as the same may be amended
and in effect from time to time.
"Copyrights" means, collectively, all of the following (a) all
copyrights, rights and interests in copyrights, works protectable by copyright,
copyright registrations and copyright applications, including those listed in
the schedules to any Copyright Security Agreement; (b) all renewals of any of
the foregoing; (c) all income, royalties, damages and payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing, including damages or payments for past, present or future
infringements of any of the foregoing; (d) the right to xxx for past, present
and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
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"CS Acquisition" has the meaning assigned to that term in the
introductory paragraph to this Agreement.
"Daily Interest Amount" has the meaning assigned to that term in
subsection 9.8(A)(3).
"Daily Interest Rate" has the meaning assigned to that term in
subsection 9.8(A)(3).
"Daily Loan Balance" has the meaning assigned to that term in
subsection 9.8(A)(3).
"Default" means a condition, act or event that, after notice or lapse
of time or both, would constitute an Event of Default if that condition, act or
event were not cured or removed within any applicable grace or cure period.
"Default Rate" has the meaning assigned to that term in subsection
2.2(A).
"Disbursing Agent" means Mellon Investor Services LLC, a New Jersey
limited liability company.
"Disbursing Agent Agreement" means that certain Disbursing Agent
Agreement dated as of October 18, 2006 between Xxxxxxx and the Disbursing Agent.
"EBITDA" means, for any period, without duplication, the total of the
following for Loan Parties on a consolidated basis, each calculated for such
period: (a) net income determined in accordance with GAAP; plus, to the extent
deducted in the calculation of net income, (b) the sum of (i) income and
franchise taxes paid or accrued [or any payments made under the Tax Sharing
Agreement]; (ii) interest expenses, net of interest income, paid or accrued;
(iii) amortization and depreciation, (iv) Pro-Forma Adjustments, (v) Management
Fees and Expenses, (vi) non-cash stock-based compensation, (vii) non-cash
purchase accounting charges, and (viii) other non-cash charges (excluding
accruals for cash expenses made in the ordinary course of business); LESS, to
the extent included in the calculation of net income, (c) the sum of (i) the
income of any Person (other than a Loan Party) in which a Loan Party has an
ownership interest except to the extent such income is received by a Loan Party
in a cash distribution during such period; (ii) gains or losses from sales or
other dispositions of assets (other than Inventory in the normal course of
business); and (iii) extraordinary or non-recurring gains, net of extraordinary
or non-recurring "cash" losses to the extent such non-recurring "cash" losses do
not exceed the extraordinary or non-recurring gains.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA (a) which is maintained for former or current
employees of any Loan Party or any ERISA Affiliate or has at any time within the
preceding 6 years been maintained for former or current employees of any Loan
Party or any current or former ERISA Affiliate or (b) with respect to which any
Loan Party or ERISA Affiliate contributes or may have any obligation to
contribute or any other liability.
"Environmental Claims" means claims, liabilities, monetary obligations,
damages, punitive damages, fines, penalties, costs, expenses, investigations,
litigation, administrative proceedings, judgments or orders relating to
Hazardous Materials.
- 5 -
"Environmental Laws" means any present or future federal, state or
local law, rule, regulation or order relating to pollution, waste, disposal or
the protection of human health or safety, plant life or animal life, natural
resources or the environment.
"Equity Contribution" means, on or prior to the Closing Date, the
contribution of new cash equity to Holdings and subsequent contribution by
Holdings to CS Acquisition of not less than $32,500,000 pursuant to the Equity
Documentation, consisting of: (a) not less than $29,700,000 from BNS (such
amounts to be provided to BNS by Persons and on terms and conditions reasonably
satisfactory to Agent), and (b) not less than $2,800,000 from AIP, in each case
on terms and conditions reasonably satisfactory to Agent.
"Equity Documentation" means the documentation governing the Equity
Contribution.
"Equity Interests" of any Person shall mean any and all shares, rights
to purchase, options, warrants, general, limited or limited liability
partnership interests, member interests, participation or other equivalents of
or interest in (regardless of how designated) equity of such Person, whether
voting or nonvoting, including common stock, preferred stock, convertible
securities or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Exchange Act).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means any Person who
is a member of a group which is under common control with any Loan Party, who
together with any Loan Party is treated as a single employer within the meaning
of Section 414(b) and (c) of the IRC.
"Event of Default" has the meaning assigned to that term in subsection
8.1.
"Excess Interest" has the meaning assigned to that term in subsection
2.2(C).
"Fairness Opinion" means the opinion issued by Xxxxxx X. Xxxx Advisors
LLC to the Special Committee of the Board of Directors of Xxxxxxx, dated
September 26, 2006.
"Federal Funds Effective Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
immediately following Business Day by the Board of Governors of the Federal
Reserve System as the Federal Funds Rate or Federal Reserve Statistical Release
H.15(519) entitled "Selected Interest Rates" or any successor publication of the
Federal Reserve System reporting the Federal Funds Effective Rate or its
equivalent or, if such rate is not published for any Business Day, the average
of the quotations for the day of the requested Loan received by Agent from three
Federal funds brokers of recognized standing selected by Agent.
"First Lien Agent" means GMAC Commercial Finance, LLC, a Delaware
limited liability company, and its permitted successors and assigns.
- 6 -
"First Lien Lenders" has the meaning provided in the definition of
"First Lien Loan Agreement".
"First Lien Loan Agreement" means that certain Loan and Security
Agreement dated as of the date hereof by and among Loan Parties, First Lien
Agent and the other lenders a party thereto (the "First Lien Lenders"), as
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under the Intercreditor Agreement.
"First Lien Debt" means all Indebtedness of Borrowers under the First
Lien Loan Documents.
"First Lien Loan Documents" means the First Lien Loan Agreement and all
related documents, instruments, certificates and agreements.
"Fiscal Year" means each twelve (12) month period ending on the last
day of October in each year.
"Fiscal Year 2006 Tax Refunds" means any tax refunds received by any
Loan Party that are related to the Fiscal Year of the Loan Parties ended October
31, 2006.
"Fixed Charge Coverage" means, for any period, Operating Cash Flow
divided by Fixed Charges.
"Fixed Charges" means, for any period, and each calculated for Loan
Parties on a consolidated basis for such period (without duplication): (a) Cash
Interest Expense; plus (b) scheduled payments of principal with respect to all
Indebtedness; plus (c) any provision for (to the extent it is greater than zero)
income or franchise taxes included in the determination of net income,
[including any payments under the Tax Sharing Agreement, but] excluding any
provision for deferred taxes; plus (d) payment of deferred taxes accrued in any
prior period; plus (e) Restricted Junior Payments (including, without
limitation, any Management Fees and Expenses, but excluding any payments made
pursuant to subsection 7.5(h)) made in cash to the extent included in the
calculation of EBITDA. Notwithstanding the foregoing, "Fixed Charges" shall not
include any payments of Merger Consideration or any fees and expenses relating
to the closing of the Transaction.
"Foreign Lender" has the meaning assigned to that term in subsection
2.9(C).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.
"Governmental Authorities" means any federal, state or municipal court
or other governmental department, commission, board, bureau, agency or
instrumentality, governmental or quasi-governmental, domestic or foreign.
- 7 -
"Guarantors" has the meaning assigned to that term in the Recitals
section of this Agreement, and shall include any other Person who may hereafter
guarantee payment or performance of the whole or any part of the Obligations.
"Hazardous Material" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
Environmental Laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity, or
toxicity; (b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; and (d) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls.
"Holdings" means Xxxxxxx I Holding Corp., a Delaware corporation.
"Indebtedness", as applied to any Person, means without duplication:
(a) all indebtedness for borrowed money; (b) obligations under leases which in
accordance with GAAP constitute Capital Leases; (c) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money; (d) any obligation owed for all or any part of
the deferred purchase price of property or services if the purchase price is due
more than six (6) months from the date the obligation is incurred or is
evidenced by a note or similar written instrument; (e) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is non-recourse to the credit of that Person; (f) obligations in respect of
Letters of Credit or similar instruments; (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; (h) "earnouts" and similar payment obligations and (i) any
advances under any factoring arrangement.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 12.2.
"Indemnitees" has the meaning assigned to that term in subsection 12.2.
"Insufficiency" means, at any time with respect to any Employee Benefit
Plan, the amount, if any, of such Employee Benefit Plan's unfunded benefit
liabilities within the meaning of Section 4001(a)(18) of ERISA.
"Insurance Monetization" means the receipt by the Loan Parties of
approximately $500,000 as a result of the surrender of certain life insurance
policies as to which Xxxxxxx is the beneficiary.
"Intangible Assets" means all intangible assets (determined in
conformity with GAAP) including, without limitation, goodwill, Intellectual
Property, Software, licenses, organizational costs, deferred amounts, covenants
not to compete, unearned income and restricted funds.
- 8 -
"Intellectual Property" means, collectively, all: Copyrights, Patents
and Trademarks.
"Intercreditor Agreement" means that certain Subordination and
Intercreditor Agreement dated as of the Closing Date between Agent and First
Lien Agent.
"Interest Period" means, in connection with the LIBOR Loan, an interest
period which Borrowing Agent shall elect to be applicable to the LIBOR Loan,
which Interest Period shall be either a one (1), two (2), three (3), or six (6)
month period; provided that:
(1) the initial Interest Period for the LIBOR Loan shall
commence on the Closing Date;
(2) in the case of successive Interest Periods, each
successive Interest Period shall commence on the day on which the immediately
preceding Interest Period expires;
(3) if an Interest Period expiration date is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day;
provided that if any Interest Period expiration date is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the immediately preceding Business Day;
(4) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
part (5) below, end on the last Business Day of a calendar month; and
(5) no Interest Period shall extend beyond the Termination
Date.
"Interest Rate" has the meaning assigned to that term in subsection
2.2(A).
"Interest Ratio" has the meaning assigned to that term in subsection
9.8(A)(3).
"Interest Settlement Date" has the meaning assigned to that term in
subsection 9.8(A)(4).
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute and all rules and regulations promulgated
thereunder.
"IRS" means the United States of America Internal Revenue Service.
"Issuing Lender" has the meaning assigned to that term in subsection
2.1(G)(2)
"Lender" or "Lenders" has the meaning assigned to that term in the
Recitals section of this Agreement.
"Letter of Non-Exemption" has the meaning assigned to that term in
subsection 2.9(C).
"Liabilities" shall have the meaning given that term in accordance with
GAAP and shall include, without limitation, Indebtedness.
- 9 -
"LIBOR" means, for each Interest Period, a rate per annum equal to:
(1) offered rate for deposits in U.S. dollars in an amount
comparable to the amount of the applicable Loan in the London interbank market
for the relevant Interest Period which is published by the British Bankers'
Association and currently appears on the Telerate Page 3750 as of 11:00 a.m.
(London time) on the day which is two (2) Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, that if such a rate ceases to be available to Agent on that or any
other source from the British Bankers' Association, LIBOR shall be equal to a
rate per annum equal to the average rate (rounded upwards, if necessary, to the
nearest 1/100 of 1%) at which Agent determines that U.S. dollars in an amount
comparable to the amount of the applicable Loans are being offered to prime
banks at approximately 11:00 a.m. (London time) on the day which is two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period for settlement in immediately available funds
by leading banks in the London interbank market selected by Agent; divided by
(2) a number equal to one (1.0) minus the maximum reserve
percentages (expressed as a decimal fraction) (including, without limitation,
basic, supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System 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 such Board) which are required to be maintained
by any Lender by the Board of Governors of the Federal Reserve System; such rate
to be rounded upward to the next whole multiple of one-sixteenth of one percent
(.0625%). LIBOR shall be adjusted automatically on and as of the effective date
of any change in any such reserve percentage.
"LIBOR Loans" means the Term Loans during any periods that the Term
Loans bear interest at rates determined by reference to LIBOR.
"Lien" means any lien (statutory or otherwise), mortgage, deed of
trust, pledge, security interest, charge or encumbrance of any kind, whether
voluntary or involuntary (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"Loan" or "Loans" means the advance under the Term Loan Commitment.
"Loan Documents" means this Agreement, the Pledge Agreements, the
Mortgages, the Notes, the Intercreditor Agreement and all other documents,
instruments and agreements executed by or on behalf of any Loan Party and
delivered concurrently herewith or at any time hereafter to or for Agent or any
Lender in connection with the Loans, and any other transactions contemplated by
this Agreement, all as amended, restated, supplemented or modified from time to
time.
"Loan Party" means each of the Borrowers, each of the Guarantors and
each Subsidiary of any Loan Party which is or becomes a party to any Loan
Document.
"Loan Parties' Accountants" means McGladrey and Xxxxxx, LLP, which
selection shall not be modified during the term of this Agreement without
Agent's prior written consent.
- 10 -
"Loan Year" means each period of twelve (12) consecutive months
commencing on the Closing Date and on each anniversary thereof.
"London Banking Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London Interbank market.
"Management Equity Contribution" means the contribution following the
Closing Date of up to $500,000 to the capital of Holdings (and subsequent
contribution by Holdings to Xxxxxxx) by members of management of the Loan
Parties.
"Management Fees and Expenses" means the management fees and expenses
permitted to be paid to AIP and BNS pursuant to subsection 7.5(b) and (c).
"Material Adverse Effect" means a material adverse effect upon (a) the
business, operations, prospects, properties, assets or condition (financial or
otherwise) of any Borrower, or the Loan Parties taken as a whole, (b) the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party or of Agent or any Lender to enforce or collect any of the
Obligations or (c) a material impairment of the enforceability or priority of
the Agent's Liens with respect to the Collateral.
"Maximum Rate" has the meaning assigned to that term in subsection
2.2(C).
"Merger" shall have the meaning set forth in the recitals to this
Agreement.
"Merger Consideration" shall mean cash paid by CS Acquisition to the
shareholders of Xxxxxxx as consideration for the Merger in an amount equal to
$12.50 per common share of Xxxxxxx.
"Merger Documents" means, collectively, the (i) Agreement and Plan of
Merger dated as of September 26, 2006 among Xxxxxxx, XX Acquisition and Steel
Partners II, L.P., (ii) the Fairness Opinion, (iii) the Disbursing Agent
Agreement and (iii) all articles of merger and certificates, related thereto.
"Mortgage" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Loan Party to Agent, on behalf
of Agent and Lenders, with respect to Mortgaged Property or Additional Mortgaged
Property, all in form and substance reasonably satisfactory to Agent.
"Mortgage Policies" has the meaning assigned to that term in subsection
5.4(A).
"Mortgaged Property" means the real property owned by any Loan Party as
described on Schedule 5.4.
"Multiemployer Plan" means any plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA) to which any Loan Party or
any ERISA Affiliate contributes or accrues an obligation to contribute or with
respect to which any of them have any liability, or has within the past six
years had any obligation or liability to make contributions.
- 11 -
"Multiple Employer Plan" shall mean an Employee Benefit Plan which has
two or more contributing sponsors (including any Loan Party or any ERISA
Affiliate) at least two of whom are not under common control, as such a plan is
described in Section 4064 of ERISA.
"Note" or "Notes" means the Term Notes.
"Notice of Borrowing" means a notice duly executed by an authorized
representative of Borrowing Agent appropriately completed and in the form of
Exhibit D.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Agent or to any Lender
under the Loan Documents (whether incurred before or after the Termination Date)
including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable including, without
limitation, all interest, fees, cost and expenses accrued or incurred after the
filing of any petition under any bankruptcy or insolvency law (regardless of
whether allowed or allowable in whole or in part as a claim therein).
"Operating Cash Flow" means, for any period, (a) EBITDA; less (b)
Capital Expenditures net of amounts financed by third parties, including Capital
Leases.
"ORIX" has the meaning assigned to that term in the introductory
paragraph of this Agreement.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by each Loan Party to Agent, as the same may be amended
and in effect from time to time.
"Patents" means collectively all of the following: (a) all patents and
patent applications including, without limitation, those listed on any schedule
to any Patent Security Agreement and the inventions and improvements described
and claimed therein, and patentable inventions; (b) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing; (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages and payments for past, present
and future infringements of any of the foregoing; (d) the right to xxx for past,
present and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
"PBGC" shall mean the Pension Benefits Guaranty Corporation
established pursuant to Title IV of ERISA, or any successor agency or other
Governmental Authority succeeding to the functions thereof.
"Pension Benefit Plan" shall mean at any time any employee benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the IRC and either (i) is maintained by a Loan Party or any
current or former ERISA Affiliate; or (ii) has at any time within the preceding
five years been maintained by a Loan Party or any entity which was at such time
- 12 -
an ERISA Affiliate or former ERISA Affiliate for employees of any Loan Party or
of any entity which was at such time an ERISA Affiliate or former ERISA
Affiliate.
"Permitted Encumbrances" means the following types of Liens: (a) Liens
(other than Liens relating to Environmental Claims or ERISA) for taxes,
assessments or other governmental charges or levies not yet due and payable; (b)
statutory Liens of landlords, carriers, warehousemen, mechanics, vendors,
materialmen and other similar liens imposed by law, which are incurred in the
ordinary course of business for sums not more than thirty (30) days delinquent;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); (d) zoning
restrictions, easements, licenses, reservations, provisions, covenants, waivers,
rights-of-way, restrictions, minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, Liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through or
under a landlord, ground lessor or owner of the leased property, with or without
consent of the lessee) and other similar charges or encumbrances with respect to
real property not interfering in any material respect with the ordinary conduct
of the business of any Loan Party and which do not secure obligations for
payment of money; (e) Liens for purchase money obligations, provided that (i)
the purchase of the asset subject to any such Lien is permitted under
subparagraph D of the Financial Covenant Rider, (ii) the Indebtedness secured by
any such Lien is permitted under subsection 7.1, and (iii) such Lien encumbers
only the asset so purchased; (f) Liens in favor of Agent, on behalf of itself
and Lenders, (g) Liens set forth on Schedule 7.3(B); (h) precautionary financing
statements filed in connection with operating leases; (i) Liens in favor of
First Lien Agent, on behalf of itself and First Lien Lenders, so long as such
Liens are in compliance with the Intercreditor Agreement; and (j) the Liens and
encumbrances listed on Schedule B of the loan policies issued for the benefit of
Agent and delivered in connection with this Transaction (the "Title
Encumbrances").
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date by and among each Loan Party party thereto and Agent, as amended,
restated, supplemented or otherwise modified from time to time.
"Pro Forma" means the unedited balance sheet of Loan Parties on a
consolidated basis as of the Closing Date after giving effect to the
Transaction. The Pro Forma is attached hereto as Schedule 4.4.
"Pro Forma Adjustments" means: (i) $479,000 for the quarter ended Xxxxx
00, 0000, (xx) $507,000 for the quarter ended July 31, 2006, (iii) $472,000, as
well as all severance and transaction expenses relating to the merger of CS
Acquisition into Xxxxxxx which are included in the calculation of net income for
- 13 -
the quarter ended October 31, 2006 and (iv) for future periods, to the extent
included in the calculation of net income, the sum of (1) severance and
transaction expenses relating to the merger of CS Acquisition into Xxxxxxx and
(2) expenditures (including but not limited to retention, severance, relocation,
moving and other project costs) incurred by Borrower prior to October 31, 2008
associated with the consolidation of Borrower's facilities and implementation of
Borrower's operating plan, in an aggregate amount not in excess of $3,000,000,
provided that (x) the Borrower has determined the need for such expenditures in
its reasonable judgment, and (y) such expenditures shall be reasonably
acceptable to the First Lien Agent.
"Pro Rata Share" means the percentage obtained by dividing (i) the
Total Term Loan Commitment of a Lender by (ii) the Total Term Loan Commitments
of all Lenders, as such percentage may be adjusted by assignments permitted
pursuant to subsection 9.5; provided, however, if any Term Loan Commitment is
terminated pursuant to the terms hereof, then "Pro Rata Share" means (x) the
aggregate amount of a Lender's outstanding Term Loans by (y) the aggregate
amount of all outstanding Term Loans.
"Projections" means the Loan Parties' forecasted consolidated and
consolidating: (a) balance sheets, (b) profit and loss statements, (c) cash flow
statements, (d) capitalization statements and (e) Revolving Loan availability,
all prepared on a division by division and Subsidiary by Subsidiary basis
consistent with Loan Parties' historical financial statements and based upon
good faith estimates and assumptions by Loan Parties believed to be reasonable
at the time made, together with appropriate supporting details and a statement
of underlying assumptions.
"Register" has the meaning assigned to that term in subsection 9.5(E).
"Related Fund" has the meaning assigned to that term in subsection
9.5(D).
"Replacement Lender" has the meaning assigned to that term in
subsection 2.11(A).
"Reportable Event" shall mean a reportable event described in Section
4043(c) of ERISA or the regulations promulgated thereunder other than an event
for which the requirement to provide notice to the PBGC has been waived.
"Requisite Lenders" means (a) if the number of Lenders is two (2) or
less, all of the Lenders, and (b) if the number of Lenders is three or more,
Lenders holding or being responsible for more than fifty percent (50%) of the
sum of the outstanding Loans.
"Responsible Officer" means any senior vice president, executive vice
president, president, chief financial officer or chief accounting officer of any
Loan Party.
"Restricted Junior Payment" means: (a) any dividend or other
distribution, direct or indirect, on account of any Equity Interests of any Loan
Party now or hereafter outstanding, except a dividend payable solely with shares
of the class of stock on which such dividend is declared; (b) any payment of
Merger Consideration after the Closing Date or payment in connection with or
relating to the extinguishment, cancellation or repurchase of any Equity
Interests of Xxxxxxx that existed prior to the Merger; (c) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
- 14 -
conversion, exchange, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests of any Loan Party now or hereafter outstanding, or the issuance of a
notice of an intention to do any of the foregoing; (d) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any Equity Interests of any Loan Party now or
hereafter outstanding; (e) any director fee paid to any member of the board of
directors of any Loan Party who is also an employee of any Loan Party; (f) any
payment by any Loan Party of any management, consulting or similar fees to any
Affiliate, whether pursuant to a management agreement or otherwise; (g) any
payment with respect to principal, interest, fees or other amounts of the First
Lien Debt, other than as expressly permitted under the terms of the First Lien
Loan Agreement as in effect on the Closing Date and the Intercreditor Agreement;
and (h) any prepayment of any other Indebtedness not otherwise expressly
permitted above.
"Securities Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Settlement Date" has the meaning assigned to that term in subsection
9.8(A)(2).
"Shareholder's Agreement" means that certain Shareholder's Agreement
dated as of October 31, 2006 by and among Holdings, AIP/CH, BNS and certain
other shareholders of Holdings.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of Equity Interest (or equivalent ownership or
controlling interest) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other subsidiaries of that Person or a combination thereof.
"Tax Liabilities" has the meaning assigned to that term in subsection
2.9(A).
"Tax Sharing Agreement" means that certain Tax Sharing Agreement dated
as of October 31, 2006 among BNS, Holdings and the direct and indirect
Subsidiaries of Holdings (without giving effect to any amendment or modification
thereto without the prior written consent of Agent).
"Term Loan" means the unpaid balance of the term loan made pursuant to
subsection 2.1(C).
"Term Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make its Pro Rata share of the Term Loan in the maximum aggregate
amount set forth on the signature page of this Agreement opposite such Lender's
signature or in the most recent Assignment and Acceptance Agreements, if any,
executed by such Lender and (b) as to all Lenders, the aggregate commitment of
all Lenders to make the Term Loan.
"Term Note" means each promissory note of Borrowers in form and
substance acceptable to Agent, issued to evidence the Term Loan Commitment.
- 15 -
"Termination Date" has the meaning assigned to that term in subsection
2.5.
"Termination Event" shall mean (i) a Reportable Event with respect to
any Employee Benefit Plan (other than a Multiemployer Plan); (ii) the withdrawal
of any Loan Party or ERISA Affiliate from any Employee Benefit Plan (other than
a Multiemployer Plan) during a plan year in which such entity was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; (iii) the providing of
notice of intent to terminate any Employee Benefit Plan (other than a
Multiemployer Plan) in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate any Employee
Benefit Plan or Multiemployer Plan; (v) any event or condition which would
reasonably be expected to (a) constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Employee
Benefit Plan (other than a Multiemployer Plan), (b) result in the termination of
a Multiemployer Plan pursuant to Section 4041A of ERISA or (c) result in the
imposition of any Lien on the assets of any Loan Party or ERISA Affiliate,
including by operation of Section 4069 of ERISA; (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA of any Loan
Party or any ERISA Affiliate from a Multiemployer Plan; or (vii) the payment by
any Loan Party or ERISA Affiliate of any withdrawal liability to a
Multi-Employer Plan which would have a Material Adverse Effect.
"Title Encumbrances" has the meaning assigned to that term in
sub-clause (j) of the definition of "Permitted Encumbrances".
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by each Loan Party to Agent, as the same may be amended
and in effect from time to time.
"Trademarks" means collectively all of the following: (a) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, all registrations and recordings thereof, and all applications in
connection therewith including, without limitation, those listed on any schedule
to any Trademark Security Agreement; (b) all renewals thereof; (c) all income,
royalties, damages and payments now or hereafter due and/or payable under any of
the foregoing or with respect to any of the foregoing including damages and
payments for past, present and future infringements of any of the foregoing; (d)
the right to xxx for past, present and future infringements of any of the
foregoing; (e) all rights corresponding to any of the foregoing throughout the
world; and (f) all goodwill associated with and symbolized by any of the
foregoing.
"Transaction" means the transactions contemplated by the Equity
Documents, the Merger Documents, the Loan Documents, the First Lien Loan
Documents and the financial accommodations and Loans contemplated herein.
"Trust Agreement" means, collectively, the Trust Agreement, dated on or
about the Closing Date, among Borrowers, First Lien Agent, and the named
Trustee, in form and substance satisfactory to Agent, providing for the holding
by such trustee on behalf of the Lenders of title documents relating to chassis
constituting Collateral and periodic reporting relating thereto.
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"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided, however, to the extent the law of any other
state or other jurisdiction applies to the attachment, perfection, priority or
enforcement of any Lien granted to Agent in any of the Collateral, "UCC" means
the Uniform Commercial Code as in effect in such other state or jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection,
priority or enforcement of a Lien in such Collateral. To the extent this
Agreement defines the term "Collateral" by reference to terms used in the UCC,
each of such terms shall have the broadest meaning given to such terms under the
UCC as in effect in any state or other jurisdiction.
"Undrawn Availability" means an amount equal to the Maximum Revolving
Loan Amount less the Revolving Loan.
1.2. UCC DEFINED TERMS. The following terms used in this Agreement
shall have the respective meanings provided for in the UCC: "Accounts", "Account
Debtor", "Buyer in Ordinary Course of Business", "Chattel Paper", "Commercial
Tort Claim", "Deposit Account", "Documents", "Electronic Chattel Paper",
"Equipment", "Farm Products", "Fixtures", "General Intangibles", "Goods",
"Instruments", "Inventory", "Investment Property", "Letter of Credit",
"Letter-of-Credit Rights", "Licensee in Ordinary Course of Business", "Payment
Intangibles", "Proceeds", "Record", "Software", "Supporting Obligations" and
"Tangible Chattel Paper".
1.3. ACCOUNTING TERMS. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Agent or any Lender pursuant to subsection 5.1 shall be prepared in
accordance with GAAP (as in effect at the time of such preparation) on a
consistent basis. In the event any "Accounting Changes" (as defined below) shall
occur and such changes affect financial covenants, standards or terms in this
Agreement, then Loan Parties and Agent agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
financial condition of Loan Parties shall be the same after such Accounting
Changes as if such Accounting Changes had not been made, and until such time as
such an amendment shall have been executed and delivered by Loan Parties and
Requisite Lenders, (A) all financial covenants, standards and terms in this
Agreement shall be calculated and/or construed as if such Accounting Changes had
not been made, and (B) Loan Parties shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered hereunder that
show the differences between the financial statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting Changes). "Accounting Changes"
means: (a) changes in accounting principles required by GAAP and implemented by
Loan Parties; (b) changes in accounting principles recommended by Loan Parties'
Accountants; and (c) changes in carrying value of Loan Parties' assets,
liabilities or equity accounts resulting from (i) the application of purchase
accounting principles (A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the
Transaction, PROVIDED that the application of purchase accounting principles
shall not constitute an Accounting Change to the extent such application and the
changes in the carrying value of Loan Parties' assets, liabilities or equity
accounts cause thereby are reflected in the Pro Forma and/or the Projections
delivered on or before the Closing Date or (ii) any other adjustments that, in
each case, were applicable to, but not included in, the Pro Forma. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including, but not limited to, capitalization of costs and expenses or payment
- 17 -
of pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDA in such
period.
1.4. OTHER DEFINITIONAL PROVISIONS. References to "Sections",
"subsections", "Riders", "Exhibits", "Schedules" and "Addenda" shall be to
Sections, subsections, Riders, Exhibits, Schedules and Addenda, respectively, of
this Agreement unless otherwise specifically provided. Any of the terms defined
in subsection 1.1 or otherwise in this Agreement may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference. In this Agreement, words importing any gender include the other
genders; the words "including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; the term "or" has, except where
otherwise indicated, the inclusive meaning represented by the phrase "and/or";
references to agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other modifications thereto, but
only to the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns 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 same and any successor statutes and regulations.
SECTION 2 LOANS AND COLLATERAL
2.1. LOANS.
(A) [INTENTIONALLY OMITTED].
(B) [INTENTIONALLY OMITTED].
(C) TERM LOAN. Each Lender, severally, agrees to lend to CS
Acquisition, on the Closing Date, its Pro Rata Share of the Term Loan Commitment
which is in the aggregate amount of $45,000,000. The Term Loan shall be funded
in one drawing. Amounts borrowed under this subsection 2.1(C) and repaid may not
be reborrowed. The aggregate outstanding principal balance of the Term Loan
shall be due and payable in full in immediately available funds on the
Termination Date.
(D) [INTENTIONALLY OMITTED].
(E) NOTES. Borrowers shall execute and deliver to each Lender
with appropriate insertions Notes to evidence such Lender's Commitments. In the
event of an assignment under subsection 9.5, Borrowers shall, upon surrender of
the assigning Lender's Notes, issue new Notes to reflect the interest held by
the assigning Lender and its assignee.
(F) [INTENTIONALLY OMITTED].
(G) [INTENTIONALLY OMITTED].
(H) [INTENTIONALLY OMITTED].
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2.2. INTEREST.
(A) RATE OF INTEREST. The Loans and all other Obligations
shall bear interest from the date such Loans are made or such other Obligations
become due to the date paid at a rate per annum equal to (1) in the case of Base
Rate Loans and Obligations for which no interest rate basis is specified, the
Base Rate PLUS the Applicable Margin and (2) in the case of LIBOR Loans, LIBOR
PLUS the Applicable Margin (collectively the "Interest Rate"). Such designation
by Borrowing Agent may be changed from time to time pursuant to subsection
2.2(D). If on any day the Loan is outstanding and notice has not been delivered
to Agent in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest or if LIBOR has been specified and no LIBOR
quote is available, then for that day all Loans shall bear interest determined
by reference to the Base Rate.
After the occurrence and during the continuance of an Event of
Default (1) the Loans and all other Obligations shall, at the election of Agent
or Requisite Lenders, bear interest at a rate per annum equal to two percent
(2%) PLUS the applicable Interest Rate (the "Default Rate"), (2) LIBOR Loans
shall automatically convert to Base Rate Loans at the end of any applicable
Interest Period and (3) the Loans may not be converted to LIBOR Loans.
(B) COMPUTATION AND PAYMENT OF INTEREST. Interest on the Loans
and all other Obligations shall be computed on the daily principal balance on
the basis of a three hundred sixty (360) day year for the actual number of days
elapsed. In computing interest on the Loans, the date of funding of the Loans or
the first day of an Interest Period applicable to the Loans or, with respect to
the Base Rate Loans being converted from LIBOR Loans, the date of conversion of
the LIBOR Loans to Base Rate Loans, shall be included; and the date of payment
of the Loans or the expiration date of an Interest Period applicable to the
Loans, or with respect to Base Rate Loans being converted to LIBOR Loans, the
date of conversion of the Base Rate Loans to LIBOR Loans, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one (1)
day's interest shall be paid on the Loan. Interest on the Loans and all other
Obligations shall be payable to Agent for the benefit of Lenders monthly in
arrears on the first day of each month, on the date of any prepayment of Loans,
and at maturity, whether by acceleration or otherwise.
(C) INTEREST LAWS. Notwithstanding any provision to the
contrary contained in this Agreement or any other Loan Document, no Borrower
shall be required to pay, and neither Agent nor any Lender shall be permitted to
collect, any amount of interest in excess of the maximum amount of interest
permitted by applicable law ("Excess Interest"). If any Excess Interest is
provided for or determined by a court of competent jurisdiction to have been
provided for in this Agreement or in any other Loan Document, then in such
event: (1) the provisions of this subsection shall govern and control; (2)
neither any Borrower nor any other Loan Party shall be obligated to pay any
Excess Interest; (3) any Excess Interest that Agent or any Lender may have
received hereunder shall be, at such Lender's option, (a) applied as a credit
against the outstanding principal balance of the Obligations or accrued and
unpaid interest (not to exceed the maximum amount permitted by law), (b)
refunded to the payor thereof, or (c) any combination of the foregoing; (4) the
interest rate(s) provided for herein shall be automatically reduced to the
maximum lawful rate allowed from time to time under applicable law (the "Maximum
Rate"), and this Agreement and the other Loan Documents shall be deemed to have
been and shall be, reformed and modified to reflect such reduction; and (5)
- 19 -
neither any Borrower nor any other Loan Party shall have any action against
Agent or any Lender for any damages arising out of the payment or collection of
any Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable rate
becomes less than the Maximum Rate, the rate of interest payable on such
Obligations shall remain at the Maximum Rate until each Lender shall have
received the amount of interest which such Lender would have received during
such period on such Obligations had the rate of interest not been limited to the
Maximum Rate during such period.
(D) CONVERSION OR CONTINUATION. Subject to the other
provisions of this Agreement, including, without limitation, satisfying the
conditions set forth in Section 3, Borrowing Agent shall have the option to (1)
convert at any time all outstanding Loans from Base Rate Loans to LIBOR Loans or
(2) upon the expiration of any Interest Period applicable to LIBOR Loans, to (a)
continue all of the LIBOR Loans or (b) convert all of the LIBOR Loans to Base
Rate Loans. The succeeding Interest Period(s) of the continued or converted
Loans shall commence on the last day of the Interest Period of the Loans to be
continued or converted; provided that the Loans may not be continued as, or be
converted into, LIBOR Loans, when any Event of Default or Default has occurred
and is continuing. Any such conversion or continuation of the Term Loans shall
be of the entire outstanding principal amount under all Term Loans so that at
all times either (i) all Term Loans are LIBOR Loans or (ii) all Term Loans are
Base Rate Loans.
Borrowing Agent shall deliver a Notice of Borrowing with
respect to any such conversion/continuation to Agent no later than 1:00 p.m.
(New York City time) at least three (3) Business Days in advance of the proposed
conversion/continuation date. The Notice of Borrowing with respect to such
conversion/continuation shall certify: (1) the proposed conversion/continuation
date (which shall be a Business Day); (2) the nature of the proposed
conversion/continuation; (3) in the case of conversion to, or a continuation of,
LIBOR Loans, the requested Interest Period; (4) that no Default or Event of
Default has occurred and is continuing or would result from the proposed
conversion/continuation; and (5) that all conditions to make Loans as set forth
in Section 3 have been satisfied.
In lieu of delivering a Notice of Borrowing with respect to
any such conversion/continuation, Borrowing Agent may give Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2(D) (in such telephonic notice Borrowing Agent shall certify to
the items set forth above with respect to the Notice of Borrowing); provided
that such telephonic notice shall be promptly confirmed in writing by delivery
of a Notice of Borrowing (in form and substance described herein) with respect
to such conversion/continuation to Agent on or before the proposed
conversion/continuation date. Once given, Borrowers shall be bound by such
telephonic notice. Upon the expiration of an Interest Period for LIBOR Loans, in
the absence of a new Notice of Borrowing or a telephonic notice submitted to
Agent not less than three (3) Business Days prior to the end of such Interest
Period, all LIBOR Loans shall be automatically converted to Base Rate Loans.
Neither Agent nor any Lender shall incur any liability to any
Borrower or any other Loan Party in acting upon any telephonic notice or a
Notice of Borrowing referred to above that Agent believes in good faith to have
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been given by an officer or other person authorized to act on behalf of
Borrowers or for otherwise acting in good faith under this subsection 2.2(D).
2.3. FEES.
(A) ARRANGEMENT FEE. On the Closing Date, Borrowers shall pay
to ORIX, for its own account, an Arrangement Fee in the amount of [INTENTIONALLY
OMITTED] (representing [INTENTIONALLY OMITTED] of the aggregate Term Loan
Commitment).
(B) PREPAYMENT FEES. If Borrowers pay after acceleration or
prepay all or any portion of the Term Loans or terminate the Term Loan
Commitments, whether voluntarily or involuntarily and whether before or after
acceleration of the Obligations, Borrowers 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 (as defined below) multiplied by the principal amount of the Term
Loans paid after acceleration or prepaid; provided that, if Borrowers are
required to prepay the Term Loan as a result of a mandatory prepayment required
pursuant to subsection 2.4(B)(3) of the Loan Agreement, Borrowers shall not be
obligated to pay such prepayment fee with respect to such mandatory prepayment.
As used herein, the term "Applicable Percentage" shall mean (x) three percent
(3.0%) in the case of a prepayment or termination prior to the first anniversary
date of the Closing Date, (y) two percent (2.0%) in the case of a prepayment or
termination from and after the first anniversary of the Closing Date and prior
to the second anniversary of the Closing Date and (z) one percent (1.0%)
thereafter. The Loan 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 prepayment
of the Term Loan or termination of the Term Loan Commitment.
(C) [INTENTIONALLY OMITTED].
(D) [INTENTIONALLY OMITTED].
(E) [INTENTIONALLY OMITTED].
(F) OTHER FEES AND EXPENSES. Borrowers shall pay to Agent, for
its own account, all charges for returned items and all other bank charges
incurred by Agent, as well as Agent's standard wire transfer charges for each
wire transfer made under this Agreement.
(G) [INTENTIONALLY OMITTED].
2.4. PAYMENTS AND PREPAYMENTS.
(A) MANNER AND TIME OF PAYMENT. Any amounts due hereunder or
under any of the other Loan Documents, such amount shall be immediately due and
payable with interest thereon accruing from the applicable due date. All
payments made by Borrowers with respect to the Obligations shall be made without
deduction, defense, setoff or counterclaim. All payments to Agent hereunder
shall, unless otherwise directed by Agent, be made to Agent's Account or in
accordance with subsection 4.22. All payments remitted to Agent's Account shall
be credited to the Obligations on the same Business Day as such payments are
received by Agent in immediately available funds; provided, however, payments
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received by Agent after 2:00 P.M.. (EST) shall be deemed received on the next
Business Day. Borrowing Agent shall notify Agent by Noon (EST) if Borrowers
intend to make any voluntary payment or repayment of the Obligations to the
Agent's Account.
(B) MANDATORY PREPAYMENTS.
(1) [INTENTIONALLY OMITTED].
(2) PREPAYMENTS FROM PROCEEDS OF ASSET DISPOSITIONS.
Promptly, but in no event later than seven (7) Business Days after receipt by
any Loan Party of proceeds of any Asset Dispositions (including, without
limitation, any insurance proceeds), which proceeds exceed $250,000 in the
aggregate (it being understood that if the proceeds exceed $250,000, the entire
amount and not just the portion above $250,000 shall be subject to this
subsection 2.4(B)(2)), and to the extent not prohibited pursuant to subsection
2.4(E) of the First Lien Loan Agreement, Borrowers shall prepay the Obligations
in an amount equal to the net proceeds (i.e., gross proceeds less the reasonable
costs of such sales or other dispositions and less any Indebtedness for borrowed
money secured by a Lien described in clause (e) of the definition of Permitted
Encumbrances) from such Asset Dispositions. All such prepayments shall be
applied to the Loans in accordance with subsection 2.4(E); PROVIDED, HOWEVER, if
Borrowers reasonably expect the proceeds of any Asset Disposition to be
reinvested within one hundred eighty (180) days to repair or replace such assets
with assets of a similar class, Borrowers may, so long as no Default or Event of
Default shall have occurred and be continuing, use such proceeds only for such
repair or replacement. If Borrowers fail to reinvest such proceeds for such
purpose within one hundred eighty (180) days, Borrowers shall repay the Loans
with such proceeds in the manner set forth in subsection 2.4(E).
(3) PREPAYMENTS TO FIRST LIEN LENDERS FROM EXCESS CASH
FLOW. If Borrowers are required to make prepayments from Excess Cash Flow (as
defined in the First Lien Loan Agreement) under the First Lien Loan Agreement,
the proceeds of such payments shall be applied to the Loans in accordance with
subsection 2.4(E) to the extent not prohibited pursuant to subsection 2.4(E) of
the First Lien Loan Agreement.
(4) PREPAYMENTS FROM ISSUANCE OF SECURITIES. Promptly, but
in no event later than seven (7) Business Days after receipt by any Loan Party
of the proceeds of the issuance of equity securities (other than proceeds of the
issuance of equity securities received on or before the Closing Date), and to
the extent not prohibited pursuant to subsection 2.4(E) of the First Lien Loan
Agreement, Borrowers shall prepay the Loans in an amount equal to such proceeds,
net of underwriting discounts and commissions and other reasonable costs
associated therewith. All such prepayments shall be applied to the Loans in
accordance with subsection 2.4(E).
(5) PREPAYMENTS FROM TAX REFUNDS. Immediately upon the
receipt by any Loan Party of the proceeds of any tax refunds, and to the extent
not prohibited pursuant to subsection 2.4(E) of the First Lien Loan Agreement,
Borrowers shall prepay the Loans in an amount equal to such proceeds. All such
prepayments shall be applied to the Loans in accordance with subsection 2.4(E).
- 22 -
(6) PREPAYMENTS FROM PAYMENTS RECEIVED FROM THE DISBURSING
AGENT. Immediately upon the receipt by any Loan Party of any cash proceeds
received from the Disbursing Agent under the Disbursing Agent Agreement, and to
the extent not prohibited pursuant to subsection 2.4(E) of the First Lien Loan
Agreement, Borrowers shall prepay the Loans in an amount equal to such proceeds.
All such prepayments shall be applied to the Loans in accordance with subsection
2.4(E).
(C) VOLUNTARY PREPAYMENTS AND REPAYMENTS. Borrowers may, at
any time upon not less than three (3) Business Days prior notice to Agent,
prepay the Loans. Any prepayment of the Obligations permitted in this subsection
2.4(C) shall be subject to the payment of all fees set forth in subsection 2.3
and the payment of any amounts owing pursuant to subsection 2.12 resulting from
such prepayment.
(D) PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest or fees due
hereunder.
(E) APPLICATION OF PREPAYMENT PROCEEDS. With respect to the
prepayments described in subsections 2.4(B)(2), 2.4(B)(4) and 2.4(B)(5), such
prepayments shall be applied in payment of the Obligations as Agent shall
determine in its sole discretion.
2.5. TERM OF THIS AGREEMENT. This Agreement shall be effective until
the earlier of (a) October 31, 2011 and (b) the acceleration of all Obligations
pursuant to subsection 8.3 (the "Termination Date"). The Commitments shall
terminate (unless earlier terminated pursuant to the terms hereunder) upon the
Termination Date and all Obligations shall become immediately due and payable
without notice or demand. Notwithstanding any termination, until all Obligations
have been fully paid and satisfied, Agent, on behalf of itself and Lenders,
shall be entitled to retain security interests in and liens upon all Collateral,
and even after payment of all Obligations hereunder, each Borrower's obligation
to indemnify Agent and each Lender in accordance with the terms hereof shall
continue.
2.6. STATEMENTS. Agent shall render a monthly statement of account to
Borrowing Agent within twenty (20) days after the end of each month. Such
statement of account shall constitute an account stated unless Borrowing Agent
makes written objection thereto within thirty (30) days from the date such
statement is mailed to Borrowing Agent. Agent shall record in its books and
records, including computer records, (a) all Loans, interest charges and
payments thereof, (b) the charging and payment of all fees, costs and expenses
and (c) all other debits and credits pursuant to this Agreement. The balance in
the loan accounts shall constitute presumptive evidence, absent manifest error,
of the accuracy of the information contained therein; provided, however, that
any failure by Agent to so record shall not limit or affect any Loan Party's
obligation to pay.
2.7. GRANT OF SECURITY INTEREST.
(A) GRANT OF LIENS IN THE COLLATERAL. To secure the payment
and performance of the Obligations, including all renewals, extensions,
restructurings and refinancings of any or all of the Obligations, each Loan
- 23 -
Party hereby grants to Agent, for the benefit of Agent and Lenders, a continuing
security interest in, lien and mortgage in and to, right of setoff against and
collateral assignment of all of such Loan Parties' personal and real property
and all rights to such personal and real property, in each case, whether now
owned or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral") including,
without limitation, all: (1) Accounts; (2) Chattel Paper; (3) Commercial Tort
Claims, including those specified on Schedule 2.7(A); (4) Deposit Accounts and
cash and other monies and property of any Loan Party in the possession or under
the control of Agent, or any Lender; (5) Documents (including, without
limitation, all manufacturers' certificates or statements of origin); (6)
Equipment; (7) Fixtures; (8) General Intangibles (including Intellectual
Property); (9) Goods; (10) Instruments; (11) Inventory; (12) Investment
Property; (13) Letter-of-Credit Rights and Supporting Obligations; (14) other
personal property whether or not subject to the UCC; and (15) Mortgaged
Property; together with all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the property described
above or are otherwise necessary or helpful in the collection thereof or
realization thereon; and Proceeds and products of all or any of the property
described above.
(B) LOAN PARTIES REMAIN LIABLE. Anything herein to the
contrary notwithstanding: (a) each Loan Party shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement or the other Loan Documents had not been executed;
(b) the exercise by Agent of any of the rights under this Agreement or the other
Loan Documents shall not release any Loan Party from any of their respective
duties or obligations to the parties under the contracts and agreements included
in the Collateral; (c) neither Agent nor any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement or the other Loan Documents, nor shall Agent nor any
Lender be obligated to perform any of the obligations or duties of any Loan
Party thereunder or to take any action to collect or enforce any claim for
payment assigned under this Agreement or the other Loan Documents; and (d)
neither Agent nor any Lender shall have any liability in contract or tort for
any Loan Party's acts or omissions.
2.8. YIELD PROTECTION.
(A) CAPITAL ADEQUACY AND OTHER ADJUSTMENTS. In the event 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 capital adequacy, reserve requirements or similar requirements
or compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrowers shall within fifteen (15) days after
notice and demand from such Lender (together with the certificate referred to in
the next sentence and with a copy to Agent) pay to Agent, for the account of
such Lender, additional amounts sufficient to compensate such Lender for such
- 24 -
reduction. A certificate as to the amount of such cost and showing the basis of
the computation of such cost submitted by such Lender to Borrowing Agent shall,
absent manifest error, be final, conclusive and binding for all purposes.
(B) INCREASED LIBOR FUNDING COSTS. If, after the date hereof,
the introduction of, change in or interpretation of any law, rule, regulation,
treaty or directive would impose or increase reserve requirements (other than as
taken into account in the definition of LIBOR) or otherwise increase the cost to
any Lender of making or maintaining a LIBOR Loan, then Borrowers shall from time
to time within fifteen (15) days after notice and demand from such affected
Lenders (together with the certificate referred to in the next sentence and with
a copy to Agent) pay to Agent, for the account of such affected Lenders,
additional amounts sufficient to compensate such Lenders for such increased
cost. A certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such affected Lenders to Borrowing Agent
and Agent shall, absent manifest error, be final, conclusive and binding for all
purposes.
2.9. TAXES.
(A) NO DEDUCTIONS. Any and all payments or reimbursements made
hereunder shall be made free and clear of and without deduction for any and all
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto (all such taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto referred to herein as "Tax
Liabilities"; excluding, however, taxes imposed on the net income of any Lender
or Agent by the jurisdiction under the laws of which Agent or such Lender is
organized or doing business or any political subdivision thereof and taxes
imposed on its net income by the jurisdiction of Agent's or such Lender's
applicable lending office or any political subdivision). If any Loan Party shall
be required by law to deduct any such Tax Liabilities from or in respect of any
sum payable hereunder to Agent or any Lender, then the sum payable hereunder
shall be increased as may be necessary so that, after making all required
deductions, Agent or such Lender receives an amount equal to the sum it would
have received had no such deductions been made.
(B) CHANGES IN TAX LAWS. In the event that, subsequent to the
Closing Date, (1) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (2) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (3) compliance by a Lender with any request or directive (whether or
not having the force of law) from any Governmental Authority, agency or
instrumentality:
(a) does or shall subject Agent or any
Lender to any tax of any kind whatsoever with respect to this Agreement, the
other Loan Documents or any Loans made hereunder, or change the basis of
taxation of payments to Agent or such Lender of principal, fees, interest or any
other amount payable hereunder (except for net income taxes, or franchise taxes
imposed in lieu of net income taxes, imposed generally by federal, state or
local taxing authorities with respect to interest or commitment or other fees
payable hereunder or changes in the rate of tax on the overall net income of
Agent or such Lender); or
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(b) does or shall impose on Agent or any
Lender any other condition or increased cost in connection with the transactions
contemplated hereby or participations herein; and the result of any of the
foregoing is to increase the cost to Agent or such Lender of making or
continuing any Loan hereunder, as the case may be, or to reduce any amount
receivable hereunder;
then, in any such case, Borrowers shall promptly pay to Agent or such Lender,
upon its notice and demand, any additional amounts necessary to compensate Agent
or such Lender, on an after-tax basis, for such additional cost or reduced
amount receivable, as determined by Agent or such Lender with respect to this
Agreement or the other Loan Documents. If Agent or any Lender becomes entitled
to claim any additional amounts pursuant to this subsection, it shall promptly
notify Borrowing Agent of the event by reason of which Agent or such Lender has
become so entitled (with any such Lender concurrently notifying Agent). A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent or any Lender to Borrowing Agent shall, absent
manifest error, be final, conclusive and binding for all purposes.
(C) FOREIGN LENDERS. 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 are exempt from United States withholding tax or
are subject to United States withholding tax at a reduced rate under an
applicable statute or tax treaty shall provide to Borrowing Agent and Agent (1)
a properly completed and executed Internal Revenue Service Form W-8BEN or Form
W-8ECI or other applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States of America certifying as to such
Foreign Lender's entitlement to such exemption or reduced rate of withholding
with respect to payments to be made to such Foreign Lender under this Agreement,
(a "Certificate of Exemption"), or (2) a letter from any such Foreign Lender
stating that it is not entitled to any such exemption or reduced rate of
withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender under this
Agreement and within fifteen (15) days after a reasonable written request of
Borrowing Agent or Agent from time to time thereafter, each Foreign Lender that
becomes a Lender under this Agreement shall provide a Certificate of Exemption
or a Letter of Non-Exemption to Borrowing Agent and Agent.
If a Foreign Lender is entitled to an exemption with
respect to payments to be made to such Foreign Lender under this Agreement (or
to a reduced rate of withholding) and does not provide a Certificate of
Exemption to Borrowing Agent and Agent within the time periods set forth in the
preceding paragraph, Loan Parties shall withhold taxes from payments to such
Foreign Lender at the applicable statutory rates and no Loan Party shall be
required to pay any additional amounts as a result of such withholding;
provided, however, that all such withholding shall cease upon delivery by such
Foreign Lender of a Certificate of Exemption to Borrowing Agent and Agent.
(D) MITIGATION. If any Borrower is required to pay additional
amounts to any Lender or the Agent pursuant to SUBSECTION (A) OR (B) of this
Section, then such Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions) to change the jurisdiction of its lending office so
as to eliminate any such additional payment by such Borrower which may
thereafter accrue, if such change in the judgment of such Lender is not
otherwise materially disadvantageous to such Lender.
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2.10. REQUIRED TERMINATION AND PREPAYMENT. If on any date any Lender
shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
LIBOR Loans has become unlawful or impossible by compliance by such Lender in
good faith with any law, governmental rule, regulation or order (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Lender shall promptly give notice
(by telephone confirmed in writing) to Borrowing Agent and Agent of that
determination. Subject to prior prepayment of LIBOR Loans as contemplated by
subsection 2.12, the obligation of such Lender to make or maintain its LIBOR
Loans during any such period shall be terminated at the earlier of the
termination of the Interest Period then in effect or when required by law and
Borrowers shall no later than the termination of the Interest Period in effect
at the time any such determination pursuant to this subsection 2.10 is made or,
earlier when required by law, repay or prepay all LIBOR Loans together with all
interest accrued thereon or convert all LIBOR Loans to Base Rate Loans.
2.11. OPTIONAL PREPAYMENT/REPLACEMENT OF LENDERS. Within fifteen (15)
days after receipt by Borrowing Agent of: (a) written notice and demand from any
Lender for payment of additional costs as provided in subsection 2.8 or
subsection 2.9, or (b) written notice of any Lender's inability to make LIBOR
Loans as provided in subsection 2.10, (any such Lender demanding such payment or
having such inability being referred to herein as an "Affected Lender"),
Borrowing Agent may, at its option notify Agent and such Affected Lender of its
intention to take one of the actions set forth herein in subparagraphs (A) or
(B) below.
(A) REPLACEMENT OF AN AFFECTED LENDER. Borrowers may obtain,
at Borrowers' expense, a replacement Lender ("Replacement Lender") for an
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
Agent. In the event Borrowers obtain a Replacement Lender that will purchase all
outstanding Obligations owed to such Affected Lender and assume its Commitments
hereunder within ninety (90) days following notice of Borrowers' intention to do
so, the Affected Lender shall sell and assign its Loans and Commitments to such
Replacement Lender in accordance with the provisions of subsection 9.5;
provided, however, Borrowers have (1) reimbursed such Affected Lender for any
administrative fee payable by such Affected Lender to Agent pursuant to
subsection 9.5 and, (2) in any case where such replacement occurs as the result
of a demand for payment of certain costs pursuant to subsection 2.8 or
subsection 2.9, paid all increased costs for which such Affected Lender is
entitled to under subsection 2.8 or subsection 2.9 through the date of such sale
and assignment; or
(B) PREPAYMENT OF AN AFFECTED LENDER. Borrowers may prepay in
full all outstanding Obligations owed to an Affected Lender and terminate such
Affected Lender's Commitments. Borrowers shall, within ninety (90) days
following notice of their intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender, including such Affected Lender's
increased costs for which it is entitled to reimbursement under this Agreement
through the date of such prepayment and terminate such Affected Lender's
Commitments.
2.12. COMPENSATION. Borrowers shall promptly compensate Agent for the
benefit of Lenders (Agent's calculation of such amounts shall, absent manifest
error, be conclusive and binding upon all parties hereto), for any losses,
expenses and liabilities including, without limitation, any loss (including
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interest paid) sustained by such Lender in connection with the re-employment of
funds: (a) if for any reason (other than a default by any Lender) a borrowing of
any LIBOR Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request of borrowing by Borrowing Agent; (b) if any
prepayment of LIBOR Loans occurs on a date that is not the last day of the
applicable Interest Period (regardless of the source of such prepayment and
whether voluntary, by acceleration or otherwise); (c) if any prepayment of LIBOR
Loans is not made on any date specified in a notice of prepayment given by
Borrowers; or (d) as a consequence of any other default by Borrowers to repay
their LIBOR Loans when required by the terms of this Agreement.
2.13. BOOKING OF LIBOR LOANS. Each Lender may make, carry or transfer
LIBOR Loans at, to, or for the account of, any of its branch offices or the
office of an affiliate of such Lender.
2.14. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS. Calculation of all
amounts payable to each Lender under subsection 2.12 shall be made as though
each Lender had actually funded its relevant LIBOR Loan through the purchase of
a LIBOR deposit bearing interest at LIBOR in an amount equal to the amount of
that LIBOR Loan and having maturity comparable to the relevant Interest Period
and through the transfer of such LIBOR deposit from an offshore office to a
domestic office in the United States of America; provided, however, 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
subsection 2.12.
2.15. ENDORSEMENT; INSURANCE CLAIMS. Each Borrower hereby constitutes
and appoints Agent and all Persons designated by Agent for that purpose as such
Borrower's true and lawful attorney-in-fact, with power in the place and stead
of such Borrower and in the name of such Borrower (a) to endorse such Borrower's
name to any of the items of payment or proceeds described in subsection 4.22
below and all proceeds of Collateral that come into Agent's possession or under
Agent's control, including without limitation, with respect to any drafts,
Instruments, Documents and Chattel Paper, and (b) after the occurrence and
during the continuance of an Event of Default to obtain, adjust and settle
insurance claims, which are required to be paid to Agent. Each Borrower hereby
ratifies and approves all acts of Agent made or taken pursuant to this
subsection 2.15. Both the appointment of Agent as each Borrower's attorney and
Agent's rights and powers are coupled with an interest and are irrevocable, so
long as any of the Commitments hereunder shall be in effect and until
indefeasible payment in full, in cash, of all Obligations.
SECTION 3 CONDITIONS TO LOANS
3.1. CLOSING DATE.3.2. The obligations of Agent and each Lender to make
Loans on the Closing Date are subject to satisfaction of all of the terms and
conditions set forth below and the accuracy of all the representations and
warranties of Borrowers and the other Loan Parties set forth herein and in the
other Loan Documents:
(A) CLOSING DELIVERIES. Agent shall have received, in form and
substance reasonably satisfactory to Agent, all documents, instruments and
information identified on the transaction checklist attached hereto as Schedule
3.1(A) and all other agreements, notes, certificates, orders, authorizations,
financing statements, mortgages and other documents which Agent may at any time
reasonably request.
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(B) SECURITY INTERESTS. Agent shall have received satisfactory
evidence that all security interests and liens granted to Agent for the benefit
of Agent and Lenders pursuant to this Agreement or the other Loan Documents have
been duly perfected and constitute first priority liens on the Collateral,
subject only to Permitted Encumbrances.
(C) CLOSING DATE AVAILABILITY. After giving effect to the
consummation of the transactions contemplated hereunder on the Closing Date and
the payment by Borrowers of all costs, fees and expenses relating thereto,
Undrawn Availability under the First Lien Loan Agreement plus the Borrowers cash
on hand shall not be less than $10,000,000.
(D) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in the Loan Documents shall be true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into account any
amendments to the Schedules or Exhibits as a result of any disclosures made by
Loan Parties to Agent after the Closing Date and approved by Agent.
(E) FEES. Borrowers shall have paid all fees due to Agent or
any Lender and payable on the Closing Date.
(F) NO DEFAULT. No event shall have occurred and be continuing
or would result from funding the Loan that would constitute an Event of Default
or a Default.
(G) PERFORMANCE OF AGREEMENTS. Each Loan Party shall have
performed in all material respects all agreements and satisfied all conditions
which any Loan Document provides shall be performed by it on or before the
Closing Date.
(H) NO PROHIBITION. No order, judgment or decree of any court,
arbitrator or Governmental Authority shall purport to enjoin or restrain Agent
or any Lender from making any Loans.
(I) NO LITIGATION. There shall not be pending or, to the
knowledge of any Loan Party, threatened, any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation or arbitration by,
against or affecting any Loan Party or any of its Subsidiaries or any property
of any Loan Party or any of its Subsidiaries that has not been disclosed to
Agent by Loan Parties in writing, and there shall have occurred no development
in any such action, charge, claim, demand, suit, proceeding, petition,
governmental investigation or arbitration that, in the reasonable opinion of
Agent, would reasonably be expected to have a Material Adverse Effect.
(J) DELIVERY OF MERGER DOCUMENTS. Agent has received or will
receive on the Closing Date, complete copies of all Merger Documents (including
all exhibits, schedules and disclosure letters referred to therein or delivered
pursuant thereto, if any) and all amendments thereto, waivers relating thereto
and other side letters or agreements affecting the terms thereof. Each of the
foregoing shall be in form and substance reasonably satisfactory to Agent and
none of such documents and agreements shall have been amended or supplemented,
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nor shall any of the provisions thereof have been waived, except pursuant to a
written agreement or instrument which has heretofore been delivered to, and
approved in writing by, Agent. Each of the conditions precedent to the
consummation of the Merger as set forth in the Merger Documents (excluding
receipt of the Merger Consideration) shall have been satisfied in all material
respects to the reasonable satisfaction of the Agent, and not waived, except
with the consent of the Agent, and the Certificate of Merger shall have been
filed with, and pre-cleared by, the Secretary of State of Missouri. Shareholders
holding at least 66-2/3% of the Equity Interests of Xxxxxxx (on a fully diluted
basis) shall have voted in favor of the Merger and not elected to exercise any
appraisal or similar rights.
(K) FIRST LIEN DEBT. Agent has received or will receive on the
Closing Date complete copies of the First Lien Loan Documents (including all
exhibits, schedules and disclosure letters referred to therein or delivered
pursuant thereto, if any) and all amendments thereto, waivers relating thereto
and other side letters or agreements affecting the terms thereof. All of the
foregoing shall be in form and substance reasonably satisfactory to Agent and
none of such documents and agreements shall have been amended or supplemented,
nor shall have any of the provisions thereof been waived, except pursuant to a
written agreement or instrument which as heretofore been delivered to, and
approved in writing by, Agent. The transactions contemplated by the First Lien
Loan Documents shall have been consummated in accordance with the terms thereof
including and First Lien Agent shall have entered into the Intercreditor
Agreement with Agent.
(L) EQUITY CONTRIBUTION. Agent has received or will receive on
the Closing Date complete copies of the Equity Documents (including all
exhibits, schedules and disclosure letters referred to therein or delivered
pursuant thereto, if any) and all amendments thereto, waivers relating thereto
and other side letters or agreements affecting the terms thereof. All of the
foregoing shall be in form and substance reasonably satisfactory to Agent and
none of such documents and agreements shall have been amended or supplemented,
nor shall have any of the provisions thereof been waived, except pursuant to a
written agreement or instrument which as heretofore been delivered to, and
approved in writing by, Agent. The transactions contemplated by the Equity
Documents shall have been consummated in accordance with the terms thereof
including, without limitation, the receipt by CS Acquisition of gross cash
proceeds of not less than $32,500,000 and CS Acquisition shall have utilized the
full amount of such gross cash proceeds to make payments owing in connection
with the Transaction prior to the utilization by CS Acquisition of any proceeds
of Loans for such purpose.
(M) COLLATERAL AUDIT. Agent shall have received a collateral
audit conducted by it or its representatives of Loan Parties' business,
operations, financial condition, assets and systems with results satisfactory to
Agent.
(N) MANAGEMENT MEETINGS. Agent or its representatives shall
have had the opportunity to meet with Loan Parties' management to discuss their
business, its business plan, any issues raised by the collateral audit or
appraisals, or other matters that may arise in connection with Agent's due
diligence efforts.
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(O) ENVIRONMENTAL AUDIT AND ASSESSMENT. Agent shall have
received an environmental audit report in scope and substance satisfactory to
Agent prepared by an environmental engineering firm acceptable to Agent. Agent,
in its sole discretion, shall be satisfied that there are no existing
environmental liabilities that may have a Material Adverse Effect on the
prospects of any Loan Party.
(P) INSURANCE. Agent shall have received certificates of
insurance, insurance policies or binders for insurance with respect to each Loan
Party in types and amounts, under terms and conditions satisfactory to Agent
with appropriate endorsements naming Agent as loss payee and/or additional
insured, as appropriate.
(Q) FINANCIAL INFORMATION. Agent and each Lender shall have
received an updated business plan and financial and other information, as it
shall reasonably require with respect to each Loan Party, the foregoing to be in
form and substance satisfactory to Agent.
(R) MATERIAL ADVERSE CHANGE. Since October 31, 2005, there
shall have been no material adverse change in the business, operations, assets,
properties, liabilities, profits, prospects or financial position of the Loan
Parties taken as a whole as determined by the Agent in its sole discretion.
(S) FEDERAL AND MISSOURI STATE LAW COMPLIANCE. The Merger
Documents and the transactions contemplated thereby shall comply with all
applicable contract and securities laws (including, without limitation, federal
and Missouri state securities and corporate laws and regulations).
(T) SOLVENCY. Each Loan Party shall have demonstrated to Agent
that after giving effect to the Transactions, such Loan Party is solvent, able
to meet its obligations as they mature and has sufficient capital to enable it
to operate its business.
(U) MANAGEMENT AGREEMENT. Xxxxxxx shall have entered into
management services agreements with (x) AIP (the "AIP Management Agreement") and
(y) BNS, which agreements shall be in form and substance satisfactory to Agent
in its sole discretion.
(V) STRUCTURE OF LOAN PARTIES. Each Loan Party's tax
assumptions, capital, organization, ownership and legal structure shall be
satisfactory to Agent and not impair the ability of Agent to enforce its claim
against the Collateral and all Collateral, except as otherwise expressly
provided in this Agreement, must be freely pledgeable as security for the
Obligations.
(W) FEDERAL COMPLIANCE. No Loan Party is sanctioned or has
received notice that it is under investigation under any Federal regulation
governing foreign asset control, or any other comparable statute or regulation.
(X) INTERCREDITOR AGREEMENTS. Agent shall have entered into an
intercreditor agreement with any holder of a Lien in any chassis that is
Collateral, establishing the priority of the Lien in such Collateral to the
satisfaction of Agent and Lenders.
(Y) REPAYMENT OF EXISTING INDEBTEDNESS. All Indebtedness of
any Loan Party not expressly permitted hereunder shall have been terminated or
contemporaneously paid in full (other than the Indebtedness set forth on
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Schedule 3.1(Y), which shall be defeased in a manner satisfactory to Agent) and
any Liens on the assets of any Loan Party securing such Indebtedness shall have
been terminated. Agent shall have received evidence, in form and substance
reasonably satisfactory thereto, with respect to all Indebtedness set forth on
Schedule 3.1(Y) that the Loan Parties have (i) directed the trustee under the
relevant Indebtedness to deliver an "irrevocable notice of redemption" to each
holder of such Indebtedness in accordance with the terms of the documents
governing such Indebtedness, stating that such Indebtedness will be redeemed no
later than the 30th day following the Closing Date, (y) effected a covenant
defeasance and (z) irrevocably deposited cash with the trustee under such
Indebtedness sufficient to effect the redemption of all such Indebtedness
(including any accrued and unpaid interest through the applicable redemption
date) in accordance with the terms thereof.
(Z) TRUST AGREEMENT. Agent shall have received the Trust
Agreement, duly executed and delivered by the parties thereto.
(AA) WARRANTY PLANS. Xxxxxxx shall have provided Agent a
copies of its standard warranty plans, which plans shall be in form and
substance reasonably satisfactory to Agent.
3.2. [INTENTIONALLY OMITTED].
SECTION 4 REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
To induce Agent and each Lender to enter into the Loan Documents and to
make the Loans, each Loan Party represents, warrants and covenants to Agent and
each Lender that the following statements are and will be true, correct and
complete on the Closing Date after giving effect to Transaction and, unless
specifically limited, shall remain so for so long as any of the Commitments
hereunder shall be in effect and until indefeasible payment in full, in cash, of
all Obligations:
4.1. ORGANIZATION, POWERS, CAPITALIZATION.
(A) ORGANIZATION AND POWERS. Each of the Loan Parties is an
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and qualified to do business in all states and
other jurisdictions where such qualification is required except where failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect. Each of the Loan Parties has all requisite power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted and to enter into each Loan Document. The name of
(within the meaning of Section 9-503 of the UCC) and jurisdiction of
organization of each Loan Party is set forth on Schedule 4.1(A). The chief
executive office of each Loan Party is located at the address indicated on
Schedule 4.1(A). Each Loan Party's organizational identification numbers, if
any, are identified on Schedule 4.1(A).
(B) CAPITALIZATION. The authorized capital stock of each of
the Loan Parties and its respective Subsidiaries is as set forth on Schedule
4.1(B), including all preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the purchase or
acquisition from any Loan Party of any shares of capital stock or other
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securities or equity interests of any such entity. All issued and outstanding
shares of capital stock or other equity interests of each of the Loan Parties
are duly authorized and validly issued, fully paid, nonassessable, free and
clear of all Liens other than those (x) in favor of Agent for the benefit of
Agent and Lenders and (y) in favor of First Lien Agent, for the benefit of First
Lien Agent and the First Lien Lenders, so long as such Liens are in compliance
with the Intercreditor Agreement, and such shares were issued in compliance with
all applicable state and federal laws concerning the issuance of securities.
Each Loan Party will promptly notify Agent of any change in its ownership or
organizational structure.
4.2. AUTHORIZATION OF BORROWING, NO CONFLICT. Each Loan Party has the
power and authority to incur the Obligations and to grant security interests in
the Collateral. On the Closing Date, the execution, delivery and performance of
the Loan Documents by each Loan Party signatory thereto will have been duly
authorized by all necessary corporate and shareholder action. The execution,
delivery and performance by each Loan Party of each Loan Document to which it is
a party and the consummation of the transactions contemplated by the Loan
Documents by each Loan Party do not contravene any applicable law, the corporate
charter or bylaws or other organizational documents of any Loan Party or any
material agreement or order by which any Loan Party or any Loan Party's property
is bound and will not (x) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of any Loan Party,
other than Permitted Encumbrances, or (y) require any approval of the interest
holders of any Loan Party or any approval or consent of any Person under any
material contractual obligation of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect. The
Loan Documents are the legally valid and binding obligations of the applicable
Loan Parties respectively, each enforceable against the Loan Parties, as
applicable, in accordance with their respective terms.
4.3. FINANCIAL CONDITION. All financial statements concerning Loan
Parties furnished by or on behalf of Loan Parties to Agent or any Lender
pursuant to this Agreement have been prepared in accordance with GAAP
consistently applied throughout the periods involved (except as disclosed
therein) and present fairly the financial condition of the Loan Parties covered
thereby as at the dates thereof and the results of their operations for the
periods then ended. The Pro Forma was prepared by Loan Parties based on the
unaudited balance sheet of Xxxxxxx dated September 30, 2006 as if the
Transaction had been consummated. The Projections delivered by Loan Parties will
be prepared in light of the past operations of the business of Loan Parties, and
such Projections will represent the good faith estimate of Loan Parties and
their senior management, as of the date such Projections are delivered
concerning the most probable course of their business as of the date such
Projections are delivered. The Loan Parties shall not be required to update the
Projections following their delivery, other than any requirement set forth in
the Reporting Rider to deliver Projections for a subsequent period.
4.4. INDEBTEDNESS AND LIABILITIES. As of the Closing Date, no Loan
Party has (a) any Indebtedness except as reflected on the Pro Forma; or (b) any
Liabilities other than as reflected on the Pro Forma or as incurred in the
ordinary course of business following the date of the Pro Forma. Borrowing Agent
shall promptly deliver copies of all notices given or received by any Loan Party
or any of their Affiliates with respect to noncompliance with any term or
condition related to the First Lien Debt or other Indebtedness, and shall
promptly notify Agent of any potential or actual Event of Default with respect
to the First Lien Debt or other Indebtedness.
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4.5. COLLATERAL WARRANTIES AND COVENANTS.
(A) ACCOUNTS WARRANTIES AND COVENANTS. Except as otherwise
disclosed to Agent in writing, as to each of Loan Party's existing Accounts and
each of its hereafter arising Accounts that: at the time of its creation, such
Account is a valid, bona fide obligation, representing an undisputed
indebtedness incurred by the Account Debtor (and any other Person obligated on
such Account) for property actually sold and delivered or for services
completely rendered; there are no defenses, setoffs, offsets, claims, or
counterclaims, genuine or otherwise, against such Account except as otherwise
included in a Loan Party's reserves and disclosed in writing to Agent on the
accounts receivable schedules delivered by Loan Parties to Agent; such Account
does not represent a sale to a Subsidiary or an Affiliate, or a consignment,
sale or return or a xxxx and hold transaction; the amount represented by Loan
Parties to Agent as owing by each Account Debtor (and by each of the other
Persons obligated on such Account) is, or will be, the correct amount actually
and unconditionally owing, to the knowledge of any Loan Party no agreement
exists permitting any other deduction or discount other than agreements set
forth on Schedule 4.5(A); the applicable Loan Party is the lawful owner of such
Account and has the right to assign the same to Agent, for the benefit of Agent
and Lenders (other than to the extent assignment of such Account may be limited
by the Federal Assignment of Claims Act of 1940 as amended (31 U.S.C. Section
3727 et seq.) or any applicable statute or municipal ordinance of similar
purpose and effect); such Account is free of all Liens, other than those in
favor of (x) Agent, on behalf of itself and Lenders and (y) First Lien Agent, on
behalf of itself and the First Lien Lenders, so long as such Liens are in
compliance with the Intercreditor Agreement, and such Account constitutes, the
legally valid and binding obligation of the applicable Account Debtor (and any
other Person obligated on such Account) and is due and payable in accordance
with its terms.
(B) INVENTORY WARRANTIES AND COVENANTS. Except as otherwise
disclosed to Agent in writing, all of each Loan Party's Inventory is of good and
merchantable quality, free from any defects that would reasonably be expected to
have a Material Adverse Effect, such Inventory is not subject to any licensing,
patent, trademark, trade name or copyright agreement with any Person that
restricts such Loan Party's ability to manufacture and/or sell the Inventory.
The completion and manufacturing process of such Inventory by a Person other
than a Loan Party would be permitted under any contract to which a Loan Party is
a party or to which the Inventory is subject. None of any Loan Party's Inventory
has been or will be produced in violation of the Fair Labor Standards Act and
subject to the so-called "hot goods" provisions contained in Title 29 U.S.C. 215
or in violation of any other law. All inventory and products owned by Persons
other than a Loan Party and located on any premises owned, leased or controlled
by a Loan Party, shall be separately and conspicuously identified as such and
shall be segregated from such Loan Party's own Inventory located at such
premises.
(C) EQUIPMENT WARRANTIES AND COVENANTS. Each Loan Party has
maintained and shall cause all of its Equipment to be maintained and preserved
in good working order, ordinary wear and tear excepted, and all necessary
replacements of and repairs thereto shall be made so that the value and
operating efficiency of the Equipment shall be maintained and preserved. None of
any Loan Party's Equipment is covered by any certificate of title and the
applicable Loan Party shall promptly notify Agent to the extent such Loan Party
obtains any Equipment covered by any certificate of title. Upon request of
Agent, each Loan Party shall promptly deliver to Agent or to First Lien Agent,
as bailee for Agent, any and all certificates of title, applications for title
or similar evidence of ownership of all of its Equipment and shall cause Agent
to be named as lienholder on any such certificate of title or other evidence of
ownership. Each Loan Party shall promptly inform Agent of any additions to or
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deletions from the Equipment and no Loan Party shall permit any such items to
become Fixtures to real estate other than real estate subject to mortgages or
deeds of trust in favor of Agent, for the benefit of itself and Lenders.
(D) CHATTEL PAPER WARRANTIES AND COVENANTS. As of the Closing
Date, no Loan Party holds any Chattel Paper and does not anticipate holding any
Chattel Paper in the ordinary course of their business. To the extent any Loan
Party holds or obtains any Chattel Paper, the applicable Loan Party will
promptly (i) deliver to Agent or to First Lien Agent, as bailee for Agent, all
Tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Agent and (ii) provide Agent or First Lien Agent, as bailee for
Agent, with Control of all Electronic Chattel Paper, by having Agent identified
as the assignee of the Records(s) pertaining to the single authoritative copy
thereof and otherwise complying with the applicable elements of Control set
forth in the UCC. Borrowing Agent will also deliver to Agent all security
agreements securing any Chattel Paper and execute UCC financing statement
amendments assigning to Agent any UCC financing statements filed by any Loan
Party in connection with such security agreements. Each Loan Party will xxxx
conspicuously all Chattel Paper with a legend, in form and substance reasonably
satisfactory to Agent, indicating that such Chattel Paper is subject to the Lien
of Agent.
(E) INSTRUMENTS WARRANTIES AND COVENANTS. Each Loan Party will
deliver to Agent or to First Lien Agent, as bailee for Agent, all Instruments it
holds or obtains duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to
Agent. Each Loan Party will also deliver to Agent all security agreements
securing any Instruments and execute UCC financing statement amendments
assigning to Agent any UCC financing statements filed by each Loan Party in
connection with such security agreements.
(F) INVESTMENT PROPERTY WARRANTIES AND COVENANTS. Each Loan
Party will take any and all actions necessary (or required or requested by
Agent), from time to time, to (i) cause Agent or First Lien Agent, as bailee for
Agent, to obtain exclusive Control of any Investment Property owned by each Loan
Party in a manner reasonably acceptable to Agent and (ii) obtain from any
issuers of such Investment Property and such other Persons, for the benefit of
Agent, written confirmation of Agent's Control over such Investment Property
upon terms and conditions reasonably acceptable to Agent
(G) LETTERS OF CREDIT WARRANTIES AND COVENANTS. If requested
by Agent, each Loan Party will deliver to Agent or to First Lien Agent, as
bailee for Agent, all Letters of Credit under which a Loan Party is the
beneficiary or is otherwise entitled to receive proceeds duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to Agent. Each Loan Party will also
deliver to Agent all security agreements securing any such Letters of Credit and
execute UCC financing statement amendments assigning to Agent any UCC financing
statements filed by any Loan Party in connection with such security agreements.
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Each Loan Party will take any and all actions necessary (or required or
requested by Agent), from time to time, to cause Agent or First Lien Agent, as
bailee for Agent, to obtain exclusive Control of any Letter-of-Credit Rights
owned by any Loan Party in a manner acceptable to Agent.
(H) GENERAL INTANGIBLES WARRANTIES AND COVENANTS. Each Loan
Party shall use its best efforts to obtain any consents, waivers or agreements
necessary to enable Agent to exercise remedies hereunder and under the other
Loan Documents with respect to any of any Loan Party's rights under any General
Intangibles, including each Loan Party's rights as a licensee of custom designed
computer software.
(I) INTELLECTUAL PROPERTY WARRANTIES AND COVENANTS. Each Loan
Party owns, is licensed to use or otherwise has the right to use, all
Intellectual Property used in or necessary for the conduct of its business as
currently conducted, and all such Intellectual Property is identified on
Schedule 4.5(I). Except as set forth on Schedule 4.5(I), there are no
restrictions on any Loan Party's right to create a Lien in such Intellectual
Property nor in Agent's right to perfect and enforce such Lien. Each Loan Party
shall concurrently herewith deliver to Agent each Copyright Security Agreement,
Patent Security Agreement and Trademark Security Agreement and all other
documents, instruments and other items as may be necessary for Agent to file
such agreements with the U.S. Copyright Office and the U.S. Patent and Trademark
Office. The Copyrights, Patents and Trademarks listed on the respective
schedules to each of the Copyright Security Agreement, Patent Security Agreement
and Trademark Security Agreement constitute all of the Patents, Trademarks and
government registered Copyrights owned by any Loan Party. If, before the
Obligations are indefeasibly paid in full, in cash, any Loan Party acquires or
becomes entitled to any new or additional Patents, Trademarks or federally
registered Copyrights, or rights thereto, such Loan Party shall give to Agent
prompt written notice thereof, and shall amend the schedules to the respective
security agreements or enter into new or additional security agreements to
include any such new Patents, Trademarks or government registered Copyrights.
Each Loan Party shall: (a) prosecute diligently any copyright, patent or
trademark application at any time pending; (b) make application for registration
or issuance of all new copyrights, patents and trademarks as reasonably deemed
appropriate by such Loan Party; (c) preserve and maintain all rights in the
Intellectual Property material to the operation of the business of the Loan
Parties; and (d) use its best efforts to obtain any consents, waivers or
agreements necessary to enable Agent to exercise its remedies with respect to
the Intellectual Property. No Loan Party shall abandon any material right to
file a copyright, patent or trademark application nor shall any Loan Party
abandon any material pending copyright, patent or trademark application, or
Copyright, Patent or Trademark without the prior written consent of Agent. All
government registered Intellectual Property owned by any Loan Party is valid,
subsisting and enforceable and all filings necessary to maintain the
effectiveness of such registrations have been made. The execution, delivery and
performance of this Agreement by any Loan Parties will not violate or cause a
default under any of the Intellectual Property or any agreement in connection
therewith.
(J) COMMERCIAL TORT CLAIMS WARRANTIES AND COVENANTS. Except
for matters disclosed on Schedule 2.7(A), no Loan Party owns any Commercial Tort
Claims. Each Loan Party shall advise Agent promptly upon such Loan Party
becoming aware that it owns any additional Commercial Tort Claims. With respect
to any new Commercial Tort Claim, the applicable Loan Party will execute and
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deliver such documents as Agent deems necessary to create, perfect and protect
Agent's security interest in such Commercial Tort Claim.
(K) DEPOSIT ACCOUNTS; BANK ACCOUNTS WARRANTIES AND COVENANTS.
Schedule 4.5(K) sets forth the account numbers and locations of all Deposit
Accounts or other bank accounts of each Loan Party.
(L) BAILEES. Except as disclosed on Schedule 4.5(L), none of
the Collateral is in the possession of any consignee, bailee, warehouseman,
agent or processor. No Collateral shall at any time be in the possession or
control of any warehouse, bailee or any of Loan Parties' agents or processors
without Agent's prior written consent and unless Agent, if Agent has so
requested, has received warehouse receipts or bailee lien waivers reasonably
satisfactory to Agent prior to the commencement of such possession or control.
If any Collateral is at any time in the possession or control of any warehouse,
bailee or any of Loan Parties' agents or processors, such Loan Party shall, upon
the request of Agent, notify such warehouse, bailee, agent or processor of the
Liens in favor of Agent, for the benefit of Agent and Lenders, created hereby,
shall instruct such Person to hold all such Collateral for Agent's account
subject to Agent's instructions, and shall obtain such Person's acknowledgement
that it is holding the Collateral for Agent's benefit.
(M) COLLATERAL DESCRIPTION; USE OF COLLATERAL. Each Loan Party
will furnish to Agent, from time to time upon request, statements and schedules
further identifying, updating, and describing the Collateral and such other
information, reports and evidence concerning the Collateral, as Agent may
reasonably request, all in reasonable detail. No Loan Party will use or permit
any Collateral to be used unlawfully or in violation of any provision of
applicable law, or any policy of insurance covering any of the Collateral.
(N) COLLATERAL FILING REQUIREMENTS; COLLATERAL RECORDS. None
of the Collateral is of a type in which Liens may be registered, recorded or
filed under, or notice thereof given under, any federal statute or regulation
except for Collateral described on the schedules to the Copyright Security
Agreement, the Patent Security Agreement and the Trademark Security Agreement.
Each Loan Party shall promptly notify Agent in writing upon acquiring any
interest hereafter in Collateral that is of a type where a Lien may be
registered, recorded of filed under, or notice thereof given under, any federal
statute or regulation. Each Loan Party shall keep full and accurate books and
records relating to the Collateral and shall stamp or otherwise xxxx such books
and records in such manner as Agent may reasonably request to indicate Agent's
Liens in the Collateral, for the benefit of Agent and Lenders.
(O) FEDERAL CLAIMS. Together with the reports required by
subparagraph (5) of the Reporting Rider, each Loan Party shall notify Agent of
any Collateral which constitutes a claim against the United States of America,
or any State or municipal government or any department, instrumentality or
agency thereof, the assignment of which claim is restricted by law. If the
aggregate amount of Collateral which constitutes a claim against the United
States of America, or any State or municipal government or any department,
instrumentality or agency thereof, the assignment of which claim is restricted
by law, exceeds $7,500,000, then upon the request of Agent, each Loan Party
shall take such steps as may be necessary to comply with any applicable federal
assignment of claims laws and other comparable laws.
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(P) AGENT AUTHORIZED. Each Loan Party hereby authorizes and,
until such time as the Obligations are indefeasibly paid in full, in cash, shall
continue to authorize Agent to file one or more financing or continuation
statements, and amendments thereto (or similar documents required by any laws of
any applicable jurisdiction), relating to all or any part of the Collateral
without the signature of such Loan Party and hereby specifically ratifies all
such actions previously taken by Agent.
(Q) Invoices. No Borrower will use any invoices other than
invoices in the form delivered to Agent prior to the Closing Date without giving
Agent 30 days' prior notice of the intended use of a different form of invoice
together with a copy of such different form. Upon the request of Agent, each
Borrower shall deliver to Agent, at such Borrower's expense, copies of
customers' invoices or the equivalent, original shipping and delivery receipts
or other proof of delivery, customers' statements, customer address lists, the
original copy of all documents, including without limitation, repayment
histories and present status reports, relating to Accounts and such other
documents and information relating to the Accounts as Agent shall specify.
4.6. NAMES AND LOCATIONS. Schedule 4.6 sets forth (a) all legal names
and all other names (including trade names, fictitious names and business names)
under which any Loan Party currently conducts business, or has at any time
during the past five years conducted business, (b) the name of any entity which
any Loan Party has acquired in whole or in part or from whom any Loan Party has
acquired a significant amount of assets within the past five years, (c) the
location of each Loan Party's principal place of business, (d) the state or
other jurisdiction of organization for each Loan Party and sets forth each Loan
Party's organizational identification number or specifically designates that one
does not exist, (e) the location of each Loan Party's books and records, (f) the
location of all other offices of each Loan Party, and (g) all Collateral
locations (designating Inventory and Equipment locations and indicating between
owned, leased, warehouse, storage, and processor locations). The locations
designated on Schedule 4.6 are the Loan Parties' sole locations for their
respective businesses and the Collateral. Each Loan Party will give Agent at
least thirty (30) days advance written notice of any: (a) change of name or of
any new trade name or fictitious business name of any Loan Party, (b) change of
principal place of business of any Loan Party, (c) change in the location of any
Loan Party's books and records or the Collateral, (d) new location for any Loan
Party's books and records or the Collateral, or (e) changes in any Loan Party's
state or other jurisdiction of organization or its organizational identification
number.
4.7. TITLE TO PROPERTIES; LIENS. Each Loan Party has good, sufficient
and legal title to, or interest in, all of the Collateral (and any other
material properties and assets, if any) and will have good, sufficient and legal
title of all after-acquired Collateral (and any other after-acquired material
properties and assets, if any), in each case, free and clear of all Liens except
for the Permitted Encumbrances. Agent has a valid, perfected and, except for
Liens set forth in clauses (a), (c), (d), (e) and (j) of the definition of
Permitted Encumbrances, first priority Liens in the Collateral, securing the
payment of the Obligations, and such Liens are entitled to all of the rights,
priorities and benefits afforded by the UCC or other applicable law as enacted
in any relevant jurisdiction which relates to perfected Liens. The applicable
Loan Party owns good and marketable, indefeasible fee simple title to all of the
real estate described on Schedule 4.7(a-1) hereto as owned by it and has a valid
leasehold interest in all of the real estate described on Schedule 4.7(a-2)
hereto as leased by it, in each case free and clear of all Liens or other
encumbrances of any kind, except as described in Schedule 4.7(a-1) or 4.7(a-2)
as applicable and subject to clauses (a), (d), (g), (h) and (j) of the
definition of Permitted Encumbrances. Schedules 4.7(a-1) and 4.7(a-2) hereto
correctly identify as of the Closing Date (x) each parcel of real property owned
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by each Loan Party, together in each case with an accurate street address and
description of the use of such parcel, (y) each parcel of real property leased
by or to a Loan Party, together in each case with an accurate street address and
description of the use of such parcel, and (z) each other interest in real
property owned, leased or granted to or held by a Loan Party. Except as set
forth on Schedules 4.7(a-1) and 4.7(a-2):
(i) no structure owned or leased by a Loan Party
fails to conform in any material respect with applicable
ordinances, regulations, zoning laws and restrictive covenants
(including in any such case and without limitation those
relating to environmental protection) nor encroaches upon
property of others, nor is any such real property encroached
upon by structures of others in any case in any manner that
would have or could be reasonably expected to have a Material
Adverse Effect on the Agent's or Lenders' interest in any
material Collateral located on the premises or otherwise would
have or would be reasonably likely to have a Material Adverse
Effect;
(ii) no charges or violations have been filed,
served, made or threatened, to the knowledge of any Loan
Party, against or relating to any such property or structure
or any of the operations conducted at any such property or
structure, as a result of any violation or alleged violation
of any applicable ordinances, requirements, regulations,
zoning laws or restrictive covenants (including in any such
case and without limitation those relating to environmental
protection) or as a result of any encroachment on the property
of others where the effect of same would have or could be
reasonably expected to have a Material Adverse Effect on the
Agent's or Lenders' interest in any material Collateral
located on the premises or otherwise would have or would be
reasonably likely have a Material Adverse Effect;
(iii) other than pursuant to applicable laws, rules,
regulations or ordinances, covenants that run with the land or
provisions in the applicable leases, there exists no
restriction on the use, transfer or mortgaging of any such
property, subject to Title Encumbrances;
(iv) the applicable Loan Party has adequate permanent
rights of ingress to and egress from any such property used by
it for the operations conducted thereon;
(v) except as expressly set forth in the lease
agreements to which such property relates, there are no
developments affecting any of the real property or interests
therein pending or threatened which might reasonably be
expected to curtail or interfere in any material respect with
the use of such property for the purposes for which it is now
used; and
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(vi) No Loan Party has any option in, or any right or
obligation to acquire any interest in, any real property;
Except as set forth in Schedule 4.7(a-1) or 4.7(a-2) as
applicable, the applicable Loan Party owns and has good and marketable title to
all the owned properties and assets reflected on its most recent balance sheet
and valid leasehold interests in the property it leases subject to no Liens
(other than Liens described in clauses (a), (d), (g), (h) and (j) of the
definition of Permitted Encumbrances), and all such leases are in full force and
effect and the applicable Loan Party enjoys peaceful and undisturbed possession
under all such leases.
4.8. LITIGATION; ADVERSE FACTS. There are no judgments outstanding
against any Loan Party or affecting any property of any Loan Party nor is there
any action, charge, claim, demand, suit, proceeding, petition, governmental
investigation or arbitration now pending or, to the best knowledge of any
Responsible Officer, threatened against or affecting any Loan Party or any
property of any Loan Party which would reasonably be expected to result in a
Material Adverse Effect. Promptly upon any Responsible Officer obtaining
knowledge of (a) the institution of any action, suit, proceeding, governmental
investigation or arbitration against or affecting any Loan Party or any property
of any Loan Party not previously disclosed in writing by Loan Parties to Agent
or (b) any material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting any Loan
Party or any property of any Loan Party which would reasonably be expected to
have a Material Adverse Effect, the applicable Loan Party will promptly give
notice thereof to Agent in writing and provide such other information as may be
reasonably available to enable Agent and its counsel to evaluate such matter.
4.9. PAYMENT OF TAXES. All material tax returns and reports of any Loan
Party required to be filed by any of them have been timely filed and are
complete and accurate in all material respects. All taxes, assessments, fees and
other governmental charges which are due and payable by any Loan Party have been
paid when due; provided that no such tax need be paid if such Loan Party is
contesting same in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such Loan Party has established appropriate reserves
as shall be required in conformity with GAAP. As of the Closing Date, none of
the income tax returns of any Loan Party are under audit and Loan Parties shall
promptly notify Agent in the event that any of Loan Parties' tax returns become
the subject of an audit. No tax liens have been filed against any Loan Party.
The charges, accruals and reserves on the books of each Loan Party in respect of
any taxes or other governmental charges are in accordance with GAAP. Each Loan
Party has executed IRS Form 8821designating Agent as such Loan Party's appointee
to receive directly from the IRS, on an on-going basis, certain tax information,
notices and other written communication and each Loan Party authorizes Agent to
file such Form 8821 with the IRS. Each Loan Party's respective federal tax
identification number is set forth on Schedule 4.9.
4.10. PERFORMANCE OF AGREEMENTS. No Loan Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any material contractual obligation of any such Person,
and no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default. Each Loan Party shall promptly notify
Agent of (a) the occurrence of any default or breach under any material
contractual obligation of any Loan Party, (b) the termination of any material
contractual obligation of any Loan Party, or (c) the amendment or modification
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of any material contractual obligation of any Loan Party. Loan Parties shall not
amend or modify any material contractual obligation of any Loan Party in a
manner that would reasonably be expected to be materially adverse to Agent or
any Lender without Agent's prior written consent.
4.11. EMPLOYEE BENEFIT PLANS. Each Loan Party, each ERISA Affiliate and
Employee Benefit Plan is in compliance, and will continue to remain in
compliance, in all material respects with all applicable provisions of ERISA,
the IRC and all other applicable laws and the regulations and interpretations
thereof with respect to all Employee Benefit Plans. No material liability has
been incurred or will be incurred by any Loan Party or any ERISA Affiliate which
remains unsatisfied for any funding obligation, taxes or penalties with respect
to any Employee Benefit Plan. Each Loan Party and each ERISA Affiliate has made
and shall continue to make all contributions required to be made by such Person
to each Employee Benefit Plan when due. No Loan Party or ERISA Affiliate shall
establish any new Employee Benefit Plan or amend any existing Employee Benefit
Plan if the liability (contingent or otherwise) or increased liability
(contingent or otherwise) resulting from such establishment or amendment could
be material.
No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the IRC) has occurred with respect to any Employee Benefit
Plan (other than a Multiemployer Plan) subject to Part 4 of Subtitle B of Title
I of ERISA which could result in material liabilities to any Loan Party.
No Termination Event has occurred, is planned or is reasonably expected
to occur, and no condition or event currently exists or is expected to occur
that could result in any such Termination Event. Except as set forth in Schedule
4.11, no Employee Benefit Plan has incurred any "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the IRC), whether
or not waived. No Pension Benefit Plan has incurred any "accumulated funding
deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the
IRC), whether or not waived. The aggregate "projected benefit obligations"
(within the meaning of Statement of Financial Accounting Standards 87) under all
Pension Benefit Plans (other than Multiemployer Plans) do not exceed the
aggregate fair market value of the assets of such Pension Benefit Plans by more
than $250,000, in each case as of the latest actuarial valuation date for such
Pension Benefit Plans (determined in accordance with the same actuarial
assumptions and methods as those used by the Pension Benefit Plans' actuary in
its valuation of such Pension Benefit Plans as of such valuation date). No Loan
Party or ERISA Affiliate has any contingent liabilities with respect to any
post-retirement benefits under any employee welfare benefit plan, other than
liability for continuation coverage described in Part 6 of Title I of ERISA or
disclosed on Schedule 4.11.
No Loan Party nor any ERISA Affiliate has incurred, or is reasonably
expected to incur any material withdrawal liability (within the meaning given
such term under Part I of Subtitle E of Title IV of ERISA) to any Multiemployer
Plan. No Loan Party or any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been terminated, partitioned
or reorganized within the meaning of Title IV of ERISA, and, to the best of each
Loan Party's knowledge, no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, partitioned or reorganized within the
meaning of Title IV of ERISA.
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4.12. BROKER'S FEES. Except as set forth on Schedule 4.12, no broker's
or finder's fee or commission will be payable with respect to any of the
transactions contemplated hereby.
4.13. ENVIRONMENTAL COMPLIANCE. Except as set forth on Schedule 4.13,
each Loan Party is and shall continue to remain in material compliance with all
applicable Environmental Laws. Except as set forth on Schedule 4.13, there are
no claims, liabilities, Liens, investigations, litigation, administrative
proceedings, whether pending or threatened, or judgments or orders relating to
any Hazardous Materials asserted or threatened against any Loan Party or
relating to any real property currently or formerly owned, leased or operated by
any Loan Party.
4.14. SOLVENCY. From and after the date of this Agreement, each Loan
Party: (a) owns assets the fair saleable value of which are greater than the
total amount of its liabilities (including contingent liabilities); (b) has
capital that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does not intend
to incur and does not believe that it will incur debts beyond its ability to pay
such debts as they become due.
4.15. DISCLOSURE. No representation or warranty of any Loan Party
contained in this Agreement, the financial statements, the other Loan Documents,
or any other document, certificate or written statement furnished to Agent or
any Lender by or on behalf of any such Person for use in connection with the
Loan Documents contains any untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. There is no material fact known to
any Loan Party that has had or could have a Material Adverse Effect and that has
not been disclosed herein or in such other documents, certificates and
statements furnished to Agent or any Lender for use in connection with the
transactions contemplated hereby.
4.16. INSURANCE. Each Loan Party maintains and shall continue to
maintain adequate insurance policies and shall provide Agent with evidence of
such insurance coverage for public liability, property damage, product
liability, and business interruption with respect to its business and properties
and the business and properties of its Subsidiaries against loss or damage of
the kinds customarily carried or maintained by corporations of established
reputation engaged in similar businesses and in amounts acceptable to Agent. The
Loan Parties shall maintain and at all times after the Closing Date shall
continue to maintain an environmental insurance policy with respect to its
properties reasonably acceptable to Agent in such amount as is reasonably
acceptable to Agent, it being agreed that the environmental insurance policy in
effect on the Closing Date is acceptable to Agent. Each Loan Party shall cause
Agent at all times to be named as loss payee on all insurance policies relating
to any Collateral and shall cause Agent at all times to be named as additional
insured under all liability policies (including, without limitation, with
respect to the environmental insurance policy), in each case pursuant to
appropriate endorsements in form and substance reasonably satisfactory to Agent
and shall collaterally assign to Agent, for itself and on behalf of Lenders, as
security for the payment of the Obligations all business interruption insurance
of each Loan Party. No notice of cancellation has been received with respect to
such policies and each Loan Party is in compliance with all conditions contained
in such policies. Any proceeds received from any policies of insurance relating
to any Collateral shall be applied to the Obligations as set forth in subsection
2.4(B)(2). Each Loan Party shall provide Agent evidence of the insurance
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coverage and of the assignments and endorsements required by this Agreement
immediately upon request by Agent and upon renewal of any existing policy. If
any Loan Party elects to change insurance carriers, policies or coverage
amounts, such Loan Party shall notify Agent and provide Agent with evidence of
the updated insurance coverage and of the assignments and endorsements required
by this Agreement. In the event any Loan Party fails to provide Agent with
evidence of the insurance coverage required by this Agreement, Agent may, but is
not required to, purchase insurance at Loan Parties' expense to protect Agent's
and the Lender's interests in the Collateral. This insurance may, but need not,
protect Loan Parties' interests. The coverage purchased by Agent may not pay any
claim made by any Loan Party or any claim that is made against any Loan Party in
connection with the Collateral. Loan Parties may later cancel any insurance
purchased by Agent, but only after providing Agent with evidence that each Loan
Party has obtained insurance as required by this Agreement. If Agent purchases
insurance for the Collateral, each Loan Party will be responsible for the costs
of that insurance, including interest thereon and other charges imposed on Agent
in connection with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance, and such costs may be added to
the Obligations. The costs of the insurance may be more than the cost of
insurance Borrower is able to obtain on its own.
4.17. COMPLIANCE WITH LAWS; GOVERNMENT AUTHORIZATIONS; CONSENTS. No
Loan Party is in violation of any law, ordinance, rule, regulation, order,
policy, guideline or other requirement of (a) any Governmental Authority in all
jurisdictions in which any Loan Party is now doing business, and (b) any
government authority otherwise having jurisdiction over the conduct of any Loan
Party or any of its respective businesses, or the ownership of any of its
respective properties, which violation would subject any Loan Party, or any of
their respective officers to criminal liability or have a Material Adverse
Effect and no such violation has been alleged. Each Loan Party will comply with
the requirements of all applicable laws, ordinances, rules, regulations, orders,
policies, guidelines or other requirements of (a) any Governmental Authority as
now in effect and which may be imposed in the future in all jurisdictions in
which any Loan Party is now doing business or may hereafter be doing business,
and (b) any government authority otherwise having jurisdiction over the conduct
of any Loan Party or any of its respective businesses, or the ownership of any
of its respective properties, except to the extent the noncompliance with which
would not have a Material Adverse Effect. No authorization, approval or other
action by, and no notice to or filing with, any domestic or foreign Governmental
Authority or regulatory body or consent of any other Person is required for (a)
the grant by each Loan Party of the Liens granted hereby or for the execution,
delivery or performance of this Agreement or the other Loan Documents by each
Loan Party; (b) the perfection of the Liens granted hereby and pursuant to any
other Loan Documents (except for filing UCC financing statements with the
appropriate jurisdiction and filing any Patent Security Agreement, Trademark
Security Agreement and Copyright Security Agreement with the U.S. Copyright
Office and the U.S. Patent and Trademark Office, as applicable); or (c) the
exercise by Agent of its rights and remedies hereunder (except as may have been
taken by or at the direction of a Loan Party or Agent).
4.18. EMPLOYEE MATTERS. Except as set forth on Schedule 4.18, (a) no
Loan Party nor any of such Loan Party's employees is subject to any collective
bargaining agreement, (b) no petition for certification or union election is
pending with respect to the employees of any Loan Party and no union or
- 43 -
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Loan Party and (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
any Responsible Officer after due inquiry, threatened between any Loan Party and
its respective employees, other than employee grievances arising in the ordinary
course of business, which would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 4.18, no Loan Party is subject to an employment contract.
4.19. GOVERNMENTAL REGULATION. None of the Loan Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940 or to any federal or state
statute or regulation limiting its ability to incur indebtedness for borrowed
money.
4.20. ACCESS TO ACCOUNTANTS AND MANAGEMENT. Each Loan Party authorizes
Agent and Lenders to discuss the financial condition and financial statements of
each Loan Party with Loan Parties' Accountants upon reasonable notice to Loan
Parties of its intention to do so, and authorizes Loan Parties' Accountants to
respond to all of Agent's inquiries. Agent and each Lender may, with the consent
of Agent, which will not be unreasonably denied, confer at reasonable times
during normal business hours with Loan Parties' senior management directly
regarding Loan Parties' business, operations and financial condition.
4.21. INSPECTION. Each Loan Party shall permit Agent and any authorized
representatives designated by Agent to visit and inspect any of the properties
of any Loan Party, including their financial and accounting records, and, in
conjunction with such inspection, to make copies and take extracts therefrom
(all to be subject to subsection 12.18), and to discuss their affairs, finances
and business with their officers and any Loan Parties' Accountants, at such
reasonable times during normal business hours and as often as may be reasonably
requested. Each Lender may with the consent of Agent, which will not be
unreasonably denied, accompany Agent on any such visit or inspection.
4.22. [INTENTIONALLY OMITTED].
4.23. PAYMENT OF TAXES BY AGENT. If any of the Collateral includes a
charge for any tax payable to any governmental tax authority, Agent is hereby
authorized (but in no event obligated) in its discretion to pay the amount
thereof to the proper taxing authority for the account of any Loan Party and to
charge the Loan Party's account therefore. The Borrowing Agent shall notify
Agent if any Collateral include any tax due to any such taxing authority and, in
the absence of such notice, the Agent shall have the right to retain the full
proceeds of such Collateral and shall not be liable for any taxes that may be
due from any Loan Party by reason of the sale of any of the Collateral.
4.24. AMENDMENT OF SCHEDULE. Each Loan Party may amend any one or more
of the Schedules referred in this Section 4 (subject to prior notice to Agent,
as applicable) and any representation, warranty, or covenant contained herein
which refers to any such Schedule shall from and after the date of any such
amendment refer to such Schedule as so amended; provided however, that in no
event shall the amendment of any such Schedule constitute a waiver by Agent and
- 44 -
Lenders of any Default or Event of Default that exists notwithstanding the
amendment of such Schedule.
SECTION 5 REPORTING AND OTHER AFFIRMATIVE COVENANT
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall be in effect and until payment in full, in cash, of
all Obligations, each Loan Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Loan Parties will deliver
to Agent and each Lender (unless specified to be delivered solely to Agent) the
financial statements and other reports contained in the Reporting Rider attached
hereto.
5.2. MAINTENANCE OF PROPERTIES. Each Loan Party will maintain or cause
to be maintained in good repair, working order and condition all material
properties used in the business of each Loan Party and will make or cause to be
made all appropriate repairs, renewals and replacements thereof.
5.3. FURTHER ASSURANCES. Each Loan Party shall, from time to time,
execute such guaranties, financing or continuation statements, documents,
security agreements, reports and other documents or deliver to Agent such
instruments, certificates of title, mortgages, deeds of trust, or other
documents as Agent at any time may reasonably request to evidence, perfect or
otherwise implement the guaranties and security for repayment of the Obligations
provided for in the Loan Documents.
5.4. MORTGAGES; TITLE INSURANCE; SURVEYS.
(A) TITLE INSURANCE. On the Closing Date (or within thirty
(30) days following delivery of any Mortgage with respect to Additional
Mortgaged Property), Loan Parties shall deliver or cause to be delivered to
Agent ALTA lender's title insurance policies issued by title insurers reasonably
satisfactory to Agent (the "Mortgage Policies") in form and substance and in
amounts reasonably satisfactory to Agent assuring Agent that the Mortgages are
valid and enforceable first priority mortgage liens on the respective Mortgaged
Property or Additional Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Encumbrances. The Mortgage Policies shall be in
form and substance reasonably satisfactory to Agent and shall include an
endorsement insuring against the effect of future advances under this Agreement,
for mechanics' liens and for any other matter that Agent may reasonably request.
In the case of each leasehold constituting Mortgaged Property or Additional
Mortgaged Property, Agent shall have received such estoppel letters, consents
and waivers from the landlords and non-disturbance agreements from any holders
of mortgages or deeds of trust on such real estate as may have been requested by
Agent, which letters shall be in form and substance reasonably satisfactory to
Agent.
(B) ADDITIONAL MORTGAGED PROPERTY. Loan Parties shall as
promptly as possible (and in any event within thirty (30) days after such
designation) deliver to Agent a fully executed Mortgage, in form and substance
reasonably satisfactory to Agent together with title insurance policies and
surveys on any Additional Mortgaged Property designated by Agent.
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(C) SURVEYS. On or before the Closing Date (or within thirty
(30) days following delivery of any Mortgage with respect to Additional
Mortgaged Property), Loan Parties shall deliver or cause to be delivered to
Agent current surveys, certified by a licensed surveyor, for all real property
that is the subject of the Mortgage Policies including Additional Mortgaged
Property for which a Mortgage Policy is issued. All such surveys shall be
sufficient to allow the issuer of the mortgage policy to issue an ALTA lender's
policy.
(D) ADDITIONAL REAL PROPERTY DELIVERIES. Each Loan Party shall
furnish to Agent for the benefit of the Lenders, on or before the Closing Date
(or within thirty (30) days following delivery of any Mortgage with respect to
Additional Mortgaged Property), at the expense of the Loan Parties, in addition
to the items set forth in Section 5.4(A),(B) and (C) or under any other
provision hereof, (i) such other certificates and documents as Agent may
reasonably request and which are customary in financing of this type, (ii) with
respect to any real property to be subject to a Mortgage, appraisals for owned
real property as shall be requested by Agent, and (iii) flood insurance with
respect to any real property subject to any Mortgage to the extent such flood
insurance can be obtained by the Loan Parties on commercially reasonable terms;
provided, however, that, at the cost and expense of the Loan Parties, the Loan
Parties shall in any event maintain and shall furnish to the Agent flood
insurance with respect to any real property subject to any Mortgage to the
extent flood insurance with respect to such real property is required to be
maintained by applicable law (whether such law is applicable to any Lender,
including, without limitation, by reason of such Mortgage, any Loan Party or
otherwise). This Section 5.4 shall not be deemed to allow any Loan Party to
acquire any property if otherwise prohibited by this Agreement.
5.5. USE OF PROCEEDS AND MARGIN SECURITY. Borrowers shall use the
proceeds of all Loans for proper business purposes (as described in the recitals
to this Agreement) consistent with all applicable laws, statutes, rules and
regulations. No portion of the proceeds of any Loan shall be used for the
purpose of purchasing or carrying margin stock within the meaning of Regulation
U, or in any manner that might cause the borrowing or the application of such
proceeds to violate Regulation T or Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the Exchange Act.
5.6. MAINTENANCE OF PROPERTIES. The Loan Parties shall, and shall cause
their respective Subsidiaries to, maintain and preserve all of their respective
properties (excluding Equipment which is subject to Section 4.5(C) hereof) which
are necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear, tear, and casualty excepted and make or
cause to be made all appropriate repairs, renewals and replacements thereof
(except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect), and comply at all times with the provisions of all
material leases to which it is a party as lessee, so as to prevent any loss or
forfeiture thereof or thereunder. Each Loan Party will maintain and preserve its
existence, rights, privileges, permits, licenses, authorizations and approvals,
and become or remain duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by such Loan Party or in
which the transaction of its business makes such qualification necessary.
5.7. [INTENTIONALLY OMITTED].
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5.9. ADDITIONAL COLLATERAL. The Loan Parties acknowledge that it is
their intention to provide the Agent with a Lien on all the property of the Loan
Parties (personal, real and mixed), whether now owned or hereafter acquired
(other than as agreed to in writing by the Agent), subject only to Liens
permitted hereunder. Loan Parties shall from time to time promptly notify the
Agent of the acquisition by any Loan Party of any material property in which the
Agent does not then hold a perfected Lien (other than as agreed to in writing by
the Agent), or the creation or existence of any such property, and such person
shall, upon request by the Agent, promptly execute and deliver to the Agent or
cause to be executed and delivered to the Agent pledge agreements, security
agreements, mortgages or other like agreements with respect to such property,
together with such other documents, certificates, opinions of counsel and the
like as the Agent shall reasonably request in connection therewith, in form and
substance satisfactory to the Agent, such that the Agent shall receive valid and
perfected first priority Liens (subject to the Permitted Encumbrances) on all
such property (including property which, on the Closing Date, is not subject to
a Lien in favor of the Agent). In addition, in the event that any Loan Party
acquires or owns any material trademarks, copyrights, patents or other
intellectual property, the Loan Parties shall notify the Agent promptly in
writing and shall execute, or cause the execution of a security agreement and
other documents with respect thereto in form and substance reasonably
satisfactory to the Agent.
SECTION 6 FINANCIAL COVENANTS
Loan Parties covenant and agree that so long as any of the Commitments
remain in effect and until indefeasible payment in full, in cash, of all
Obligations, Loan Parties shall comply with and shall cause each of its
Subsidiaries to comply with all covenants contained in the Financial Covenant
Rider.
SECTION 7 NEGATIVE COVENANTS
Each Loan Party covenants and agrees that so long as any of the
Commitments remain in effect and until indefeasible payment in full, in cash, of
all Obligations, each Loan Party shall not and will not permit any of its
Subsidiaries to:
7.1. INDEBTEDNESS AND LIABILITIES. Directly or indirectly create,
incur, assume, guaranty, or otherwise become or remain directly or indirectly
liable, on a fixed or contingent basis, with respect to any Indebtedness except:
(a) the Obligations; (b) intercompany Indebtedness among the Borrowers; (c)
intercompany Indebtedness of one or more Guarantors to one or more Borrowers,
not to exceed $2,000,000 outstanding at any time in the aggregate; provided that
such Indebtedness is subordinated in right of payment to the Obligations; (d)
Indebtedness (excluding Capital Leases) not to exceed $1,000,000 in the
aggregate at any time outstanding, either unsecured or secured by purchase money
Liens permitted by Section 7.3; (e) Indebtedness under Capital Leases not to
exceed $5,000,000 outstanding at any time in the aggregate; (f) Indebtedness
pursuant to the First Lien Loan Documents, not to exceed the Maximum Senior Debt
Amount (as defined in the Intercreditor Agreement), and (g) Indebtedness
existing on the Closing Date and identified on Schedule 7.1. No Loan Party will,
incur any Liabilities except for Indebtedness permitted herein and trade
payables and normal accruals in the ordinary course of business not yet due and
payable or with respect to which any Loan Party is contesting in good faith the
amount or validity thereof by appropriate proceedings and then only to the
extent that such Loan Party has established adequate reserves therefor under
GAAP.
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7.2. GUARANTIES. Except (i) as provided under the Loan Documents, (ii)
for guarantees of the First Lien Debt pursuant to the First Lien Loan Documents
(to the extent permitted by the Intercreditor Agreement), and (iii) for
endorsements of instruments or items of payment for collection in the ordinary
course of business, no Loan Party will guaranty, endorse, or otherwise in any
way become or be responsible for any obligations of any other Person, whether
directly or indirectly by agreement to purchase the indebtedness of any other
Person or through the purchase of goods, supplies or services, or maintenance of
working capital or other balance sheet covenants or conditions, or by way of
stock purchase, capital contribution, advance or loan for the purpose of paying
or discharging any indebtedness or obligation of such other Person or otherwise.
7.3. TRANSFERS, LIENS AND RELATED MATTERS.
(A) TRANSFERS. Sell, assign (by operation of law or otherwise)
or otherwise dispose of, or grant any option with respect to any of the
Collateral, except that each Loan Party may (1) in the ordinary course of its
business, sell Inventory to a Buyer in Ordinary Course of Business and license a
General Intangible to a Licensee in Ordinary Course of Business; and (2) make
Asset Dispositions of equipment and real property, if all of the following
conditions are met: (a) the market value of assets sold or otherwise disposed of
in any single transaction or series of related transactions does not exceed
$2,000,000, the aggregate market value of assets sold or otherwise disposed of
in any Fiscal Year does not exceed $3,000,000 and the aggregate market value of
assets sold or otherwise disposed of after the Closing Date does not exceed
$6,000,000; (b) the consideration received is at least equal to the fair market
value of such assets; (c) the sole consideration received is cash; (d) the net
proceeds of such Asset Disposition are applied as required by subsection 2.4;
(e) after giving effect to the sale or other disposition of the assets included
within the Asset Disposition and the repayment of the Obligations with the
proceeds thereof, Loan Parties on a consolidated basis are in compliance on a
pro forma basis with the covenants set forth in the Financial Covenant Rider
recomputed for the most recently ended month for which information is available
and is in compliance with all other terms and conditions contained in this
Agreement; and (f) no Default or Event of Default shall then exist or result
from such sale or other disposition. Notwithstanding the foregoing, the
Transaction shall be permitted.
(B) LIENS. Except for Permitted Encumbrances, directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of the Collateral or any proceeds, income or profits therefrom.
(C) NO NEGATIVE PLEDGES. Enter into or assume any agreement
(other than (i) the Loan Documents or (ii) the First Lien Loan Documents (to the
extent not in violation of the Intercreditor Agreement)) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired.
(D) NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO LOAN
PARTIES. Except as provided (i) herein and (ii) in the First Lien Loan Documents
(to the extent not in violation of the Intercreditor Agreement), directly or
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indirectly create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Subsidiary to: (1) pay dividends or make any other distribution on any of such
Subsidiary's capital stock owned by a Loan Party; (2) pay any indebtedness owed
to a Loan Party or any other Subsidiary of a Loan Party; (3) make loans or
advances to a Loan Party or any other Subsidiary of a Loan Party; or (4)
transfer any of its property or assets to a Loan Party or any other Subsidiary
of a Loan Party.
7.4. INVESTMENTS AND LOANS. Make or permit to exist investments in or
loans to any other Person, except: (a) cash in aggregate amount not to exceed
$1,000,000 held in Deposit Accounts maintained in the ordinary course of
business, so long as such Deposit Accounts are subject to a deposit account
control agreement unless otherwise agreed to by Agent; (b) loans and advances to
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business in an aggregate outstanding amount not in excess of
$500,000 at any time, and (c) as contemplated in connection with the
Transaction.
7.5. RESTRICTED PAYMENTS. Directly or indirectly declare, order, pay,
make or set apart any sum for any Restricted Junior Payment, except that (a)
Loan Parties may make Restricted Payments with respect to their common stock to
the extent necessary to permit Loan Parties to pay the Obligations/or the First
Lien Debt (to the extent Loan Parties are permitted to make such payments with
respect to the First Lien Debt under the Intercreditor Agreement) and to permit
Loan Parties to pay expenses incurred in the ordinary course of business, (b)
Loan Parties may make payments of any sponsor management fees not to exceed
$1,500,000 in the aggregate in any fiscal year, with (i) $1,000,000 payable to
AIP annually and (ii) $500,000 payable to BNS annually, but only to the extent
no Default or Event of Default is then existing or would be created thereby, (c)
Loan Parties may make payments of up to $250,000 in the aggregate per annum to
AIP and BNS, in respect of out of pocket expenses; (d) Holdings may repurchase
its Equity Interests from directors, executive officers, members of management
or employees of Holdings and its Subsidiaries upon the death, disability,
retirement or termination of such directors, executive officers, members of
management or employees, so long as no Default or Event of Default is then
existing or would be created thereby and the aggregate amount of cash expended
by Holdings does not exceed $500,000 in any fiscal year of Holdings; (e) Loan
Parties may make payments required under the Tax Sharing Agreement (as in effect
on the Closing Date); (f) Loan Parties may pay the fees payable on the Closing
Date to AIP and Steel Partners II, L.P., which have previously been disclosed in
writing to Agent; (g) Loan Parties may make payments of Merger Consideration
after the Closing Date with amounts released from the Closing Date Reserve under
the First Lien Loan Agreement or amounts received from the Disbursing Agent and
applied to the First Lien Debt pursuant to subsection 2.4(B)(6) of the First
Lien Loan Agreement to the extent that such amounts shall have been reserved for
immediately prior to such payment pursuant to subsection 2.4(B)(6) of the First
Lien Loan Agreement, PROVIDED that notwithstanding the foregoing, after the
release of any such reserve under subsection 2.4(B)(6) of the First Lien Loan
Agreement, Loan Parties may still make such payments of Merger Consideration, so
long as (i) no Default or Event of Default is then existing or would be created
thereby and (ii) either, (x) the aggregate amount of all such payments do not
exceed $750,000, or (y) to the extent the aggregate amount of all such payments
exceed $750,000, solely with respect to the amount of such payments in excess of
$750,000 in the aggregate, after giving effect to any such payment Borrowers
have at least $7,500,000 of Undrawn Availability under the First Lien Loan
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Agreement; and (h) Loan Parties may make up to $2,000,000 in the aggregate of
payments in connection with or relating to the repurchase, cancellation or
extinguishment of the Equity Interests of Xxxxxxx that existed prior to the
Merger, so long as no Default or Event of Default is then existing or would be
created thereby and after giving effect to any such payment Borrowers have at
least $7,500,000 of Undrawn Availability under the First Lien Loan Agreement.
7.6. RESTRICTION ON FUNDAMENTAL CHANGES. (a) Enter into any transaction
of merger or consolidation (other than the Merger); (b) liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution); (c) convey, sell,
lease, sublease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its business or assets,
or the capital stock of any of its Subsidiaries, whether now owned or hereafter
acquired PROVIDED, HOWEVER, the Guarantors (other than Holdings) may (i) merge
with and into each other and/or into Borrowers, so long as the applicable
Borrower is the surviving entity, or (ii) convey all or substantially all of
their assets to each other or to any entity wholly owned, in the aggregate, by
the Loan Parties, or (iii) liquidate, wind-up or dissolve, so long as any assets
of such Guarantor are transferred to another Loan Party, provided that, in each
case of the foregoing instances, the Loan Parties shall give the Agent at least
30 days notice thereof prior to any such merger, conveyance of assets or
liquidation, wind-up or dissolution and, provided further, immediately after
such merger, conveyance, liquidation, wind-up or dissolution, the Loan Parties
would not, as a result of such transaction, breach any other obligation under
any Loan Documents; or (d) acquire by purchase or otherwise all or any
substantial part of the business or assets of, or stock or other beneficial
ownership of, any Person.
7.7. CHANGES RELATING TO FIRST LIEN DEBT. Change or amend the terms of
the First Lien Loan Documents if such change or amendment is not permitted under
the Intercreditor Agreement.
7.8. TRANSACTIONS WITH AFFILIATES. Directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate or with any
officer, director or employee of any Loan Party, except for transactions in the
ordinary course of any Loan Party's business and upon fair and reasonable terms
which are fully disclosed to Agent and Lenders and which are no less favorable
to Loan Parties than it would obtain in a comparable arm's length transaction
with an unaffiliated Person.
7.9. CONDUCT OF BUSINESS. From and after the Closing Date, engage in
any business other than businesses of the type engaged in by Loan Parties on the
Closing Date.
7.10. TAX CONSOLIDATIONS. File or consent to the filing of any
consolidated income tax return with any Person other than the other Loan Parties
or BNS; provided that in the event any Loan Party files a consolidated return
with any such Person (including BNS), such Loan Party's contribution with
respect to taxes as a result of the filing of such consolidated return shall not
be greater, nor the receipt of tax benefits less, than they would have been had
such Loan Party not filed a consolidated return with such Person.
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7.11. SUBSIDIARIES. Other than the Subsidiaries set forth on Schedule
7.11 and except as contemplated to occur on or prior to the Closing Date by the
terms of the Merger Documents, establish, create or acquire any new
Subsidiaries.
7.12. FISCAL YEAR; TAX DESIGNATION. Change its Fiscal Year; or elect to
be designated as an entity other than a C corporation as defined in IRC.
7.13. PRESS RELEASE; PUBLIC OFFERING MATERIALS. Disclose the name of
Agent or any Lender in any press release or in any prospectus, proxy statement
or other materials filed with any governmental entity relating to a public
offering of the capital stock of any Loan Party except as may be required by
law.
7.14. [INTENTIONALLY OMITTED].
7.15. IRS FORM 8821. Revoke IRS Form 8821 designating Agent as Loan
Parties' appointee to receive directly from the IRS, on an on-going basis,
certain tax information, notices and other written communication or fail to take
actions necessary to renew such Form 8821 prior to its expiration for all time
periods prior to the Termination Date.
SECTION 8 DEFAULT, RIGHTS AND REMEDIES
8.1. EVENT OF DEFAULT. "Event of Default" shall mean the occurrence or
existence of any one or more of the following (for each subsection a different
grace or cure period may be specified, if no grace or cure period is specified,
such occurrence or existence constitutes an immediate Event of Default):
(A) PAYMENT. Failure to make payment of any of the Obligations
when due; or
(B) DEFAULT IN OTHER AGREEMENTS. (1) Failure of any Loan Party
to pay when due any principal or interest on the First Lien Debt or any other
Indebtedness (other than the Obligations) or (2) breach or default of any Loan
Party with respect to the First Lien Loan Documents or any other Indebtedness
(other than the Obligations) and such failure continues beyond any applicable
grace period; if such failure to pay, breach or default entitles the holder to
cause such Indebtedness having an individual principal amount in excess of
$250,000 or having an aggregate principal amount in excess of $500,000 to become
or be declared due prior to its stated maturity, or (3) breach of any of the
provisions of the Merger Documents; or
(C) BREACH OF CERTAIN PROVISIONS. Failure of any Loan Party to
perform or comply with any term or condition contained in subparagraphs (1), (2)
and (3) of the Reporting Rider and subsections 5.3, 5.4 or 5.5, or contained in
Section 4, Section 6, Section 7 or the Financial Covenants Rider; or
(D) BREACH OF WARRANTY. Any representation, warranty,
certification or other statement made by any Loan Party in any Loan Document or
in any statement or certificate at any time given by such Person in writing
pursuant or in connection with any Loan Document is false in any material
respect on the date made; or
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(E) OTHER DEFAULTS UNDER LOAN DOCUMENTS. Any Loan Party
defaults in the performance of or compliance with any term contained in this
Agreement other than those otherwise set forth in this subsection 8.1, or
defaults in the performance of or compliance with any term contained in the
other Loan Documents and such default is not remedied or waived within fifteen
(15) days after notice from Agent, or Requisite Lenders, to Borrowing Agent of
such default; or
(F) CHANGE IN CONTROL. (1) the consummation of any transaction
(including any merger or consolidation) the result of which is that any "person"
or "group" (as such terms are defined for purposes of the Securities Act), other
than Steel Partners II, L.P. ("Steel") or one of its Affiliates of which Steel
owns at least 20% of the Equity Interests of each class of Equity Interests of
such Affiliate, becomes the owner, directly or indirectly, of 35% or more of the
issued and outstanding Equity Interests of BNS; (2) Steel ceases to (i)
beneficially own and control, directly or indirectly, at least 20% of the Equity
Interests of each class of Equity Interests of BNS entitled (without regard to
the occurrence of any contingency) to vote for the election of the members of
the board of directors of BNS or (ii) have at least two representatives on the
board of directors of BNS; (3) BNS ceases to (i) beneficially own and control,
directly or indirectly, at least 80% of the issued and outstanding Equity
Interests of each class of Equity Interests of Holdings entitled (without regard
to the occurrence of any contingency) to vote for the election of the members of
the board of directors of Holdings or (ii) have the right to elect or appoint at
least four of the five members of the board of directors of Holdings; (4) AIP/CH
ceases to beneficially own and control, directly or indirectly, at least 15% of
the issued and outstanding Equity Interests of each class of Equity Interests of
Holdings entitled (without regard to the occurrence of any contingency) to vote
for the election of the members of the board of directors of Holdings; (5)
Holdings ceases to own 100% of the Equity Interests of Xxxxxxx; (6) Xxxxxxx
ceases to own 100% of the Equity Interests of any of its direct or indirect
Subsidiaries or (7) any "Change of Control" occurs under, and as defined in, the
First Lien Loan Documents; or
(G) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (1)
A court enters a decree or order for relief with respect to any Loan Party in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, which decree or order is not stayed or other
similar relief is not granted under any applicable federal or state law; or (2)
the continuance of any of the following events for sixty (60) days unless
dismissed, bonded or discharged: (a) an involuntary case is commenced against
any Loan Party, under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or (b) a receiver, liquidator, sequestrator,
trustee, custodian or other fiduciary having similar powers over any Loan Party,
or over all or a substantial part of their respective property, is appointed; or
(H) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (1)
Any Loan Party commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case or to the conversion of an
involuntary case to a voluntary case under any such law or consents to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or (2) any Loan Party makes any
assignment for the benefit of creditors; or (3) the board of directors of any
Loan Party adopts any resolution or otherwise authorizes action to approve any
of the actions referred to in this subsection 8.1(H); or
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(I) LIENS. Any lien, levy or assessment is filed or recorded
with respect to or otherwise imposed upon all or any material part of the
Collateral or the assets of any Loan Party by the United States or any
department or instrumentality thereof or by any state, county, municipality or
other governmental agency (other than Permitted Encumbrances) and such lien,
levy or assessment is not stayed, vacated, paid or discharged within ten (10)
days; or
(J) JUDGMENT, ATTACHMENTS AND LITIGATION. Any money judgment,
writ or warrant of attachment, or similar process involving (1) an amount in any
individual case in excess of $500,000 or (2) an amount in the aggregate at any
time in excess of $1,000,000 (in either case not adequately covered by insurance
as to which the insurance company has acknowledged coverage) is entered or filed
against any Loan Party or any of their respective assets and remains
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days,
but in any event not later than five (5) days prior to the date of any proposed
sale thereunder; or an event occurs or circumstance arises with respect to any
litigation involving the Loan Parties which could have a Material Adverse
Effect; or
(K) DISSOLUTION. Any order, judgment or decree is entered
against any Loan Party decreeing the dissolution or split up of such Loan Party
and such order remains undischarged or unstayed for a period in excess of twenty
(20) days, but in any event not later than five (5) days prior to the date of
any proposed dissolution or split up; or
(L) SOLVENCY. Any Loan Party ceases to be solvent (as
represented by such Loan Party in subsection 4.14) or admits in writing its
present or prospective inability to pay its debts as they become due; or
(M) INJUNCTION. Any Loan Party is enjoined, restrained or in
any way prevented by the order of any court or any administrative or regulatory
agency from conducting all or any material part of its business and such order
continues for thirty (30) days or more; or
(N) INVALIDITY OF LOAN DOCUMENTS. Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be null
and void, or any Loan Party denies that it has any further liability under any
Loan Documents to which it is party, or gives notice to such effect; or
(O) FAILURE OF SECURITY. Agent, on behalf of itself and
Lenders, does not have or ceases to have a valid and perfected first priority
security interest in the Collateral (subject, as to priority, to Liens described
in clauses (b), (c), (e) and/or (i) of the definition of Permitted
Encumbrances), in each case, for any reason other than the failure of Agent or
any Lender to take any action within its control; or
(P) DAMAGE, STRIKE, CASUALTY. Any material damage to, or loss,
theft or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than fifteen (15) consecutive days beyond
the coverage period of any applicable business interruption insurance, the
cessation or substantial curtailment of revenue producing activities at any
facility of Borrower or any of its Subsidiaries if any such event or
circumstance would reasonably be expected to have a Material Adverse Effect; or
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(Q) LICENSES AND PERMITS. The loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired by
any Loan Party, if such loss, suspension, revocation or failure to renew would
reasonably be expected to have a Material Adverse Effect; or
(R) FORFEITURE. There is filed against any Loan Party any
civil or criminal action, suit or proceeding under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is
not dismissed within one hundred twenty (120) days; and (2) would reasonably be
expected to result in the confiscation or forfeiture of any material portion of
the Collateral; or
(S) MERGER. Any of the Merger Documents ceases to be in full
force and effect or is declared null and void or the Merger is not consummated
on the Closing Date; or
(T) AIP MANAGEMENT AGREEMENT/SHAREHOLDER'S AGREEMENT. Either
the AIP Management Agreement or the Shareholder's Agreement ceases to be in full
force and effect or is declared null and void or any material provision of the
AIP Management Agreement or the Shareholder's Agreement is amended without the
prior written consent of Agent; or
(U) INTERCREDITOR AGREEMENT. Any breach or violation by a Loan
Party of the Intercreditor Agreement, or if a court of competent jurisdiction
issues an order finding that any material provision of any of the foregoing
agreement is invalid, illegal or unenforceable.
8.2. [INTENTIONALLY OMITTED].
8.3. ACCELERATION. Upon the occurrence of any Event of Default
described in the foregoing subsections 8.1(G) or 8.1(H), all Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Loan Party, and the Commitments shall thereupon terminate. Upon
the occurrence and during the continuance of any other Event of Default, Agent
may, and upon demand by Requisite Lenders shall, by written notice to Borrowing
Agent, declare all or any portion of the Obligations to be, and the same shall
forthwith become, immediately due and payable and the Commitments shall
thereupon terminate.
8.4. REMEDIES. If any Event of Default shall have occurred and be
continuing, in addition to and not in limitation of any other rights or remedies
available to Agent and Lenders at law or in equity, Agent may, and shall upon
the request of Requisite Lenders, exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the UCC (whether or not the UCC applies to the affected Collateral) and may also
(a) require Loan Parties to, and each Loan Party hereby agrees that it will, at
its expense and upon request of Agent forthwith, assemble all or part of the
Collateral as directed by Agent and make it available to Agent at a place to be
designated by Agent which is reasonably convenient to both parties; and (b)
without notice or demand or legal process, enter upon any premises of any Loan
Party and take possession of the Collateral. Each Loan Party agrees that, to the
extent notice of sale of the Collateral or any part thereof shall be required by
law, at least ten (10) days notice to Borrowing Agent of the time and place of
any public disposition or the time after which any private disposition (which
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notice shall include any other information required by law) is to be made shall
constitute reasonable notification. At any disposition of the Collateral
(whether public or private), if permitted by law, Agent or any Lender may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase, lease, or licensing of the Collateral or any
portion thereof for the account of Agent or such Lender. Agent shall not be
obligated to make any disposition of Collateral regardless of notice of
disposition having been given. Each Loan Party shall remain liable for any
deficiency. Agent may adjourn any public or private disposition from time to
time by announcement at the time and place fixed therefor, and such disposition
may, without further notice, be made at the time and place to which it was so
adjourned. Agent is not obligated to make any representations or warranties in
connection with any disposition of the Collateral. To the extent permitted by
law, each Loan Party hereby specifically waives all rights of redemption, stay
or appraisal, which it has or may have under any law now existing or hereafter,
enacted. Agent shall not be required to proceed against any Collateral but may
proceed against one or more Loan Parties directly.
8.5. APPOINTMENT OF ATTORNEY-IN-FACT. Each Loan Party hereby
constitutes and appoints Agent as such Loan Party's attorney-in-fact with full
authority in the place and stead of such Loan Party and in the name of such Loan
Party, Agent or otherwise, from time to time in Agent's discretion while an
Event of Default is continuing to take any action and to execute any instrument
that Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including: (a) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral; (b) to enforce the obligations of any
Account Debtor or other Person obligated on the Collateral and enforce the
rights of any Loan Party with respect to such obligations and to any property
that secures such obligations; (c) to file any claims or take any action or
institute any proceedings that Agent may deem necessary or desirable for the
collection of or to preserve the value of any of the Collateral or otherwise to
enforce the rights of Agent and Lenders with respect to any of the Collateral;
(d) to pay or discharge taxes or Liens levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Agent in its sole
discretion, and such payments made by Agent to become Obligations, due and
payable immediately without demand; (e) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
assignments, verifications and notices in connection with Accounts, Chattel
Paper or General Intangibles and other Documents relating to the Collateral; and
(f) generally to take any act required of any Loan Party under Section 4 or
Section 5 of this Agreement, and to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Agent were the absolute owner thereof for all purposes, and
to do, at Agent's option and Loan Parties' expense, at any time or from time to
time, all acts and things that Agent deems necessary to protect, preserve or
realize upon the Collateral. Each Loan Party hereby ratifies and approves all
acts of Agent made or taken pursuant to this subsection 8.5. The appointment of
Agent as each Loan Party's attorney and Agent's rights and powers are coupled
with an interest and are irrevocable, so long as any of the Commitments
hereunder shall be in effect and until indefeasible payment in full, in cash, of
all Obligations.
8.6. LIMITATION ON DUTY OF AGENT AND LENDERS WITH RESPECT TO
COLLATERAL. Beyond the safe custody thereof, Agent and each Lender shall have no
duty with respect to any Collateral in its possession (or in the possession of
any agent or bailee) or with respect to any income thereon or the preservation
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of rights against prior parties or any other rights pertaining thereto. Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which Agent accords its own property.
Neither Agent nor any Lender shall be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouse, carrier, forwarding agency,
consignee, broker or other agent or bailee selected by Loan Parties or selected
by Agent in good faith.
8.7. APPLICATION OF PROCEEDS. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, (a) each Loan Party irrevocably waives the right to direct
the application of any and all payments at any time or times thereafter received
by Agent from or on behalf of any Loan Party, and Agent shall have the
continuing and exclusive right to apply and to reapply any and all payments
received at any time or times after the occurrence and during the continuance of
an Event of Default against the Obligations in such manner as Agent may deem
advisable notwithstanding any previous application by Agent and (b) in the
absence of a specific determination by Agent with respect thereto, the proceeds
of any sale of, or other realization upon, all or any part of the Collateral
shall be applied: first, to all fees, costs and expenses incurred by or owing to
Agent and then any Lender with respect to this Agreement, the other Loan
Documents or the Collateral; second, to accrued and unpaid interest on the
Obligations (including any interest which but for the provisions of any
bankruptcy or insolvency law would have accrued on such amounts); third, to the
principal amounts of the Obligations outstanding in a manner as Agent shall
determine in its sole discretion; and fourth, to any other Obligations of any
Loan Party owing to Agent or any Lender under the Loan Documents. Any balance
remaining shall be delivered to Borrowing Agent or to whomever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct.
8.8. LICENSE OF INTELLECTUAL PROPERTY. Each Loan Party hereby assigns,
transfers and conveys to Agent, for the benefit of Agent and Lenders, effective
upon the occurrence of any Event of Default hereunder, the non-exclusive right
and license to use all Intellectual Property owned or used by any Loan Party
together with any goodwill associated therewith, all to the extent necessary to
enable Agent to realize on the Collateral and any successor or assign to enjoy
the benefits of the Collateral. This right and license shall inure to the
benefit of all successors, assigns and transferees of Agent and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge and, except to the extent the
failure to obtain such consent would result in a Material Adverse Effect, does
not require the consent of any other Person.
8.9. WAIVERS; NON-EXCLUSIVE REMEDIES. No failure on the part of Agent
or any Lender to exercise, and no delay in exercising and no course of dealing
with respect to, any right under this Agreement or the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise by
Agent or any Lender of any right under this Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the other Loan Documents are cumulative
and shall in no way limit any other remedies provided by law.
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SECTION 9 AGENT
9.1. AGENT.
(A) APPOINTMENT. Each Lender hereto and, upon obtaining an
interest in any Loan, transferee or other assignee of any Lender irrevocably
appoints, designates and authorizes ORIX as Agent to take such actions or
refrain from taking such action as its agent on its behalf and to exercise such
powers hereunder and under the other Loan Documents as are delegated by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto. Neither the Agent nor any of its directors, officers, employees or
agents shall be liable for any action so taken. The provisions of this
subsection 9.1 are solely for the benefit of Agent and Lenders and no Loan Party
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 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 Borrower or any other Loan
Party. Agent may perform any of its duties hereunder, or under the Loan
Documents, by or through its agents or employees.
(B) NATURE OF DUTIES. Agent shall have no duties, obligations
or responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be mechanical and administrative in
nature. Agent shall not have by reason of this Agreement a fiduciary, trust or
agency relationship with or in respect of any Lender, any Borrower or any other
Loan Party. Nothing in this Agreement or any of the Loan Documents, express or
implied, is intended to or shall be construed to impose upon Agent any
obligations in respect of this Agreement or any of the Loan Documents except as
expressly set forth herein or therein. Each Lender shall make its own appraisal
of the credit worthiness of each Loan Party, and shall have independently taken
whatever steps it considers necessary to evaluate the financial condition and
affairs of Loan Parties, and Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto (other than as expressly required
herein), whether coming into its possession before the Closing Date or at any
time or times thereafter. If Agent seeks the consent or approval of any Lenders
to the taking or refraining from taking any action hereunder, then Agent shall
send notice thereof to each Lender. Agent shall promptly notify each Lender any
time that the Requisite Lenders have instructed Agent to act or refrain from
acting pursuant hereto.
(C) RIGHTS, EXCULPATION, ETC. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agent shall be liable to the
extent of its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. Agent shall not be liable for any apportionment
or distribution of payments made by it in good faith and if any such
apportionment or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount to
which they are determined to be entitled (and such other Lenders hereby agree to
return to such Lender any such erroneous payments received by them). Neither
Agent nor any of its agents or representatives shall be responsible to any
Lender for any recitals, statements, representations or warranties herein or for
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the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the Loan Documents or
the transactions contemplated thereby, or for the financial condition of any
Loan Party. Agent shall not be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any of the Loan Documents or the financial condition of any
Loan Party, or the existence or possible existence of any Default or Event of
Default. Agent may at any time request instructions from Lenders with respect to
any actions or approvals which by the terms of this Agreement or of any of the
Loan Documents Agent is permitted or required to take or to grant, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from Requisite Lenders or all or such other portion
of the Lenders as shall be prescribed by this Agreement. 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 under this Agreement or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders in the absence of an express requirement for a greater percentage of
Lender approval hereunder for such action.
(D) RELIANCE. Agent shall be under no duty to examine, inquire
into, or pass upon the validity, effectiveness or genuineness of this Agreement,
any other Loan Document, or any instrument, document or communication furnished
pursuant hereto or in connection herewith. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any written or oral notices,
statements, certificates, orders or other documents or any telephone message or
other communication (including any writing, fax, telecopy or telegram) believed
by it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder.
Agent shall be entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by Agent in its sole discretion.
(E) INDEMNIFICATION. Lenders will reimburse and indemnify
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, reasonable attorneys' fees and expenses), advances or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement
or any of the Loan Documents or any action taken or omitted by Agent under this
Agreement or any of the Loan Documents, in proportion to each Lender's Pro Rata
Share, but only to the extent that any of the foregoing is not promptly
reimbursed by Loan Parties; provided, however, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements resulting from
Agent's gross negligence or willful misconduct as determined by a final
non-appealable judgment by a court of competent jurisdiction. If any indemnity
furnished to Agent for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against, even if so directed
by Lenders or Requisite Lenders, until such additional indemnity is furnished.
The obligations of Lenders under this subsection 9.1(E) shall survive the
payment in full of the Obligations and the termination of this Agreement.
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(F) ORIX INDIVIDUALLY. With respect to its Commitments and the
Loans made by it, ORIX shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include ORIX in its individual capacity as a Lender or one of the
Requisite Lenders. ORIX, either directly or through strategic affiliations, may
lend money to, acquire equity or other ownership interests in, provide advisory
services to and generally engage in any kind of banking, trust or other business
with any Loan Party as if it were not acting as Agent pursuant hereto and
without any duty to account therefor to Lenders. ORIX, either directly or
through strategic affiliations, may accept fees and other consideration from any
Loan Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders. Each Lender acknowledges that ORIX
may purchase certain equity interests in certain Loan Parties and each Lender
(x) consents thereto and (y) waives any actual and/or potential conflict of
interest or other claims with respect to ORIX as Agent and as a Lender and as a
holder of an equity interest in certain Loan Parties.
(G) SUCCESSOR AGENT.
(1) RESIGNATION. Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to Borrowing
Agent and the Lenders. Such resignation shall take effect upon the acceptance by
a successor Agent of appointment as provided below.
(2) APPOINTMENT OF SUCCESSOR. Upon any such notice of
resignation pursuant to subsection 9.1(G)(1) above, Requisite Lenders shall
appoint a successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Loan Parties. If a successor Agent
shall not have been so appointed within said thirty (30) Business Day period,
the retiring Agent, upon notice to Borrowing Agent, shall then appoint a
successor Agent who shall serve as Agent until such time, if any, as Requisite
Lenders appoint a successor Agent as provided above.
(3) SUCCESSOR AGENT. Upon the acceptance of any
appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation as Agent, 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 Agent.
(H) COLLATERAL MATTERS.
(1) RELEASE OF COLLATERAL. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any Collateral (a) upon termination of the
Commitments and upon payment and satisfaction of all Obligations (other than
contingent indemnification obligations to the extent no claims giving rise
thereto have been asserted); or (b) constituting property being sold or disposed
of if the applicable Loan Party certifies to Agent that the sale or disposition
is made in compliance with the provisions of this Agreement (and Agent may rely
in good faith conclusively on any such certificate, without further inquiry). In
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addition, with the consent of Requisite Lenders, Agent may release Liens granted
to or held by Agent upon any Collateral having a book value of not greater than
ten percent (10%) of the total book value of all Collateral, as determined by
Agent, either in a single transaction or in a series of related transactions;
provided, however, in no event will Agent, acting under the authority granted to
it pursuant to this sentence, release during any calendar year Liens granted to
or held by Agent upon any Collateral having a total book value in excess of
twenty percent (20%)of the total book value of all Collateral, as determined by
Agent.
(2) CONFIRMATION OF AUTHORITY; EXECUTION OF RELEASES.
Without in any manner limiting Agent's authority to act without any specific or
further authorization or consent by Lenders (as set forth in subsection
9.1(H)(1) above), each Lender agrees to confirm in writing, upon request by
Agent or Borrowing Agent, the authority to release any Collateral conferred upon
Agent under clauses (a) and (b) of subsection 9.1(H)(1). To the extent Agent
agrees to release any Lien granted to or held by Agent as authorized under
subsection 9.1(H)(1), (a) Agent is hereby irrevocably authorized by Lenders to,
execute such documents as may be necessary to evidence the release of the Liens
granted to Agent, for the benefit of Agent and Lenders, upon such Collateral;
provided, however, that Agent shall not be required to execute any such document
on terms which, in Agent's opinion, would expose Agent to liability or create
upon Agent any obligation or entail any consequence other than the release of
such Liens without recourse or warranty, and (b) Loan Parties shall provide at
least ten (10) Business Days prior written notice of any request for any
document evidencing such release of the Liens and Loan Parties agree that any
such release shall not in any manner discharge, affect or impair the Obligations
or any Liens granted to Agent on behalf of Agent and Lenders upon (or
obligations of any Loan Party, in respect of) all interests retained by any Loan
Party, including, without limitation, the proceeds of any sale, all of which
shall continue to constitute part of the property covered by this Agreement or
the Loan Documents.
(3) ABSENCE OF DUTY. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by this Agreement or the Loan Documents exists or is owned by any Loan Party or
is cared for, protected or insured or has been encumbered or that the Liens
granted to Agent on behalf of Agent and Lenders herein or pursuant hereto have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Agreement or in any of the Loan Documents, it being
understood and agreed that in respect of the property covered by this Agreement
or the Loan Documents or any act, omission or event related thereto, Agent may
act in any manner it may deem appropriate, in its discretion, given Agent's own
interest in property covered by this Agreement or the Loan Documents as one of
the Lenders and that Agent shall have no duty or liability whatsoever to any of
the other Lenders; provided, however, that Agent shall exercise the same care
which it would in dealing with loans for its own account.
(I) AGENCY FOR PERFECTION. Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting Agent's
security interest in assets which, in accordance with the Uniform Commercial
Code in any applicable jurisdiction, can be perfected by possession or Control.
Should any Lender (other than Agent) obtain possession of any such assets, such
Lender shall notify Agent thereof, and, promptly upon Agent's request therefor,
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shall deliver such assets to Agent or in accordance with Agent's instructions.
The Agent may file such proofs of claim or documents as may be necessary or
advisable in order to have the claims of the Agent and the Lenders (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Agent and the Lenders, their respective agents, financial advisors and
counsel), allowed in any judicial proceedings relative to any Loan Party, or any
of their respective creditors or property, and shall be entitled and empowered
to collect, receive and distribute any monies, securities or other property
payable or deliverable on any such claims. Any custodian in any judicial
proceedings relative to any Loan Party is hereby authorized by each Lender to
make payments to the Agent and, in the event that the Agent shall consent to the
making of such payments directly to the Lenders, to pay to the Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of the
Agent, its agents, financial advisors and counsel, and any other amounts due the
Agent. Nothing contained in this Agreement or the other Loan Documents shall be
deemed to authorize the Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Loans, or the rights of any holder thereof, or to
authorize the Agent to vote in respect of the claim of any Lender in any such
proceeding, except as specifically permitted herein.
(J) EXERCISE OF REMEDIES. Each Lender agrees that it will not
have any right individually to enforce or seek to enforce this Agreement or any
Loan Document or to realize upon any collateral security for the Obligations,
unless instructed to do so by Agent, it being understood and agreed that such
rights and remedies may be exercised only by Agent.
9.2. NOTICE OF DEFAULT.
Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default except with respect to defaults in
the payment of principal, interest and fees required to be paid to Agent for the
account of Lenders, unless Agent shall have received written notice from a
Lender or Borrowing Agent referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". Agent
will notify each Lender of its receipt of any such notice.
9.3. ACTION BY AGENT.
Agent shall take such action with respect to any Default or
Event of Default as may be requested by Requisite Lenders in accordance with
Section 8. Unless and until Agent has received any such request, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to any Default or Event of Default as it shall deem advisable or in
the best interests of Lenders.
9.4. AMENDMENTS, WAIVERS AND CONSENTS.
(A) PERCENTAGE OF LENDERS REQUIRED. Except as otherwise
provided herein or in any of the other Loan Documents, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Requisite Lenders (or, Agent, if expressly set forth herein or in any of the
other Loan Documents) and the applicable Loan Party; provided however, that no
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amendment, modification, termination, waiver or consent with respect to the
Intercreditor Agreement shall be effective unless in writing and signed by the
Agent, with the consent of the Requisite Lenders, and no amendment,
modification, termination, waiver or consent shall be effective, unless in
writing and signed by all Lenders, to do any of the following: (1) increase any
of the Commitments; (2) reduce the principal of or the rate of interest on any
Loan or reduce the fees payable with respect to any Loan; (3) extend the
Termination Date or the scheduled due date for all or any portion of principal
of the Loans or any interest or fees due hereunder or under any other Loan
Document; (4) amend the definition of the term "Requisite Lenders" or the
percentage of Lenders which shall be required for Lenders to take any action
hereunder; (5) amend or waive this subsection 9.4 or the definitions of the
terms used in this subsection 9.4 insofar as the definitions affect the
substance of this subsection 9.4; (6) release Collateral (except if the sale,
disposition or release of such Collateral is permitted under subsection 7.3 or
subsection 9.1 or under any other Loan Document); or (8) consent to the
assignment, delegation or other transfer by any Loan Party of any of its rights
and obligations under any Loan Document; provided, further, that no amendment,
modification, termination, waiver or consent affecting the rights or duties of
Agent under this Section 9 or under any Loan Document shall in any event be
effective, unless in writing and signed by Agent, in addition to the Lenders
required to take such action. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 9 shall be binding upon each
Lender or future Lender and, if signed by a Loan Party, on such Loan Party.
(B) SPECIFIC PURPOSE OR INTENT. Each amendment, modification,
termination, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No amendment, modification,
termination, waiver or consent shall be required for Agent to take additional
Collateral.
(C) FAILURE TO GIVE CONSENT; REPLACEMENT OF NON-CONSENTING
LENDER. In the event Agent requests the consent of a Lender and does not receive
a written consent or denial thereof within ten (10) Business Days after such
Lender's receipt of such request, then such Lender will be deemed to have denied
the giving of such consent. If, in connection with any proposed amendment,
modification, termination or waiver of any of the provisions of this Agreement
requiring the consent or approval of all Lenders under this subsection 9.4, the
consent of ORIX and of Requisite Lenders is obtained but the consent of one or
more other Lenders whose consent is required is not obtained, then either Agent
or Borrowers shall have the right, so long as all such non-consenting Lenders
are either replaced or prepaid as described in clauses (1) or (2) below, to
either (1) replace the non-consenting Lenders with one or more Replacement
Lenders pursuant to subsection 2.11(A), as if such Lender were an Affected
Lender thereunder, but only so long as each such Replacement Lender consents to
the proposed amendment, modification, termination or waiver, or (2) prepay in
full the Obligations of the non-consenting Lenders and terminate the
non-consenting Lenders' Commitments pursuant to subsection 2.11(B), as if such
Lender were an Affected Lender thereunder.
Notwithstanding anything in this subsection 9.4, Agent and
Loan Parties, without the consent of either Requisite Lenders or all Lenders,
may execute amendments to this Agreement and the Loan Documents, which consist
solely of the making of typographical corrections.
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9.5. ASSIGNMENTS.
(A) ASSIGNMENTS. Each Lender may assign its rights and
delegate its obligations under this Agreement; provided, however, (1) such
Lender (other than ORIX) shall first obtain the written consent of Agent and,
provided that no Event of Default shall then exist and be continuing, Borrowing
Agent, neither of which shall be unreasonably withheld, (2) the amount of
Commitments and Loans of the assigning Lender being assigned shall in no event
be less than the lesser of (a) $5,000,000 or (b) the entire amount of the
Commitments and Loans of such assigning Lender and (3)(a) each such assignment
shall be of a pro rata portion of all such assigning Lender's Loans and
Commitments hereunder, and (b) the parties to such assignment shall execute and
deliver to Agent for acceptance and recording a Assignment and Acceptance
Agreement together with (i) a processing and recording fee of $3,500 payable by
the assigning Lender to Agent and (ii) each of the Notes originally delivered to
the assigning Lender. The administrative fee referred to in clause (3) of the
preceding sentence shall not apply to an assignment of a security interest in
all or any portion of a Lender's rights under this Agreement or the other Loan
Documents, as described in clause (1) of subsection 9.5(D) below. Upon receipt
of all of the foregoing, Agent shall notify Borrowing Agent of such assignment
and Borrowers shall comply with their obligations under the last sentence of
subsection 2.1(D). In the case of an assignment authorized under this subsection
9.5, the assignee shall be considered to be a "Lender" hereunder and Loan
Parties hereby acknowledge and agree that any assignment will give rise to a
direct obligation of Loan Parties to the assignee. The assigning Lender shall be
relieved of its obligations to make Loans hereunder with respect to the assigned
portion of its Commitment.
(B) [INTENTIONALLY OMITTED].
(C) NO RELIEF OF OBLIGATIONS; COOPERATION; ABILITY TO MAKE
LIBOR LOANS. Except as otherwise provided in subsection 9.5(A) no Lender shall,
as between Loan Parties and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, all
or any part of the Loans or other Obligations owed to such Lender. Each Lender
may furnish any information concerning Loan Parties in the possession of that
Lender from time to time to its assignees (including prospective assignees).
Loan Parties agree that they will use their best efforts to assist and cooperate
with Agent and any Lender in any manner reasonably requested by Agent or such
Lender to effect an assignment described above, including, without limitation,
assistance in the preparation of appropriate disclosure documents or placement
memoranda. Notwithstanding anything contained in this Agreement to the contrary,
so long as the Requisite Lenders shall remain capable of making LIBOR Loans, no
Person shall become a Lender hereunder unless such Person shall also be capable
of making LIBOR Loans.
(D) SECURITY INTERESTS; ASSIGNMENT TO AFFILIATES.
Notwithstanding any other provision set forth in this Agreement, any Lender may
at any time following written notice to Agent (1) pledge the Obligations held by
it or create a security interest in all or any portion of its rights under this
Agreement or the other Loan Documents in favor of any Person; provided, however
(a) no such pledge or grant of security interest to any Person shall release
such Lender from its obligations hereunder or under any other Loan Document and
(b) the acquisition of title to such Lender's Obligations pursuant to any
foreclosure or other exercise of remedies by such Person shall be subject to the
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provisions of this Agreement and the other Loan Documents in all respects
including, without limitation, any consent required by subsection 9.5; and (2)
subject to complying with the provisions of subsection 9.5 (A), assign all or
any portion of its funded loans to an assignee which is a Subsidiary of such
Lender or its parent company, to one or more other Lenders, or to a Related
Fund. For purposes of this paragraph, a "Related Fund" shall mean, with respect
to any Lender, a fund or other investment vehicle that invests in commercial
loans and is managed by such Lender or by the same investment advisor that
manages such Lender or by an Affiliate of such investment advisor.
(E) RECORDING OF ASSIGNMENTS. Agent shall maintain at its
office in Dallas, Texas a copy of each Assignment and Acceptance Agreement
delivered to it and a register for the recordation of the names and addresses of
Lenders, and the commitments of, and principal amount of the Loans owing to each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be presumptive evidence of the amounts due and
owing to Lender in the absence of manifest error. Loan Parties, Agent and each
Lender may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Borrowing Agent and any Lender, at
any reasonable time upon reasonable prior notice.
9.6. SET OFF 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,
each Lender is hereby authorized by each Loan Party at any time or from time to
time, with reasonably prompt subsequent notice to Borrowing Agent (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (a) balances held by such Lender at any of
its offices for the account of Loan Parties (regardless of whether such balances
are then due to Loan Parties), and (b) other property at any time held or owing
by such Lender to or for the credit or for the account of any Loan Party,
against and on account of any of the Obligations; except that no Lender shall
exercise any such right without the prior written consent of Agent. Any Lender
exercising its right to set off shall purchase for cash (and the other Lenders
shall sell) interests in each of such other Lender's Pro Rata Share of the
Obligations as would be necessary to cause all Lenders to share the amount so
set off with each other Lender in accordance with their respective Pro Rata
Shares. Each Loan Party agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and upon doing so shall deliver such
amount so set off to Agent for the benefit of Agent and of all Lenders in
accordance with their Pro Rata Shares.
9.7. [INTENTIONALLY OMITTED].
9.8. SETTLEMENTS, PAYMENTS AND INFORMATION.
(A) FEE PAYMENTS.
(1) [INTENTIONALLY OMITTED].
(2) [INTENTIONALLY OMITTED].
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(3) SETTLEMENT DEFINITIONS. For purposes of this
subsection 9.8(A), the following terms and conditions will have the meanings
indicated:
(a) "Daily Loan Balance" means an amount
calculated as of the end of each calendar day by subtracting (i) the cumulative
principal amount paid by Agent to a Lender on a Loan from the Closing Date
through and including such calendar day, from (ii) the cumulative principal
amount on a Loan advanced by such Lender to Agent on that Loan from the Closing
Date through and including such calendar day.
(b) "Daily Interest Rate" means an amount
calculated by dividing the interest rate payable to a Lender on a Loan (as set
forth in subsection 2.2) as of each calendar day by three hundred sixty (360).
(c) "Daily Interest Amount" means an amount
calculated by multiplying the Daily Loan Balance of a Loan by the associated
Daily Interest Rate on that Loan.
(d) "Interest Ratio" means a number
calculated by dividing the total amount of the interest on a Loan received by
Agent with respect to the immediately preceding month by the total amount of
interest on that Loan due from Borrower during the immediately preceding month.
(4) SETTLEMENT PAYMENTS. On the first Business Day of
each month ("Interest Settlement Date"), Agent will advise each Lender by
telephone, fax or telecopy of the amount of such Lender's share of interest and
fees on each of the Loans as of the end of the last day of the immediately
preceding month. Provided that such Lender has made all payments required to be
made by it under this Agreement, Agent will pay to such Lender, by wire transfer
to such Lender's account (as specified by such Lender on the signature page of
this Agreement or the applicable Assignment and Acceptance Agreement, as amended
by such Lender from time to time after the date hereof or in the applicable
Assignment and Acceptance Agreement) not later than 3:00 p.m. New York City time
on the next Business Day following the Interest Settlement Date, such Lender's
share of interest and fees on each of the Loans. Such Lender's share of interest
on each Loan will be calculated for that Loan by adding together the Daily
Interest Amounts for each calendar day of the prior month for that Loan and
multiplying the total thereof by the Interest Ratio for that Loan. Such Lender's
share of all fees paid to Agent for the benefit of Lenders hereunder shall be
paid and calculated based on such Lender's Commitment with respect to the Loans
on which such fees are associated. To the extent Agent does not receive the
total amount of any fee owing by Borrowers under this Agreement, each amount
payable by Agent to a Lender under this subsection 9.8(A)(4) with respect to
such fee shall be reduced on a pro rata basis. Any funds disbursed or received
by Agent pursuant to this Agreement, including, without limitation, under
subsections 9.7 and 9.9, prior to the Settlement Date for such disbursement or
payment shall be deemed advances or remittances by ORIX, in its capacity as a
Lender, for purposes of calculating interest and fees pursuant to this
subsection 9.8(A)(4).
(B) TERM LOAN PRINCIPAL PAYMENTS. Provided that such Lender
has made all payments required to be made by it under this Agreement, payments
of principal of the Term Loan will be settled on the date of receipt if received
by Agent on the first Business Day of a month and on the Business Day
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immediately following the date of receipt if received on any day other than the
first Business Day of a month.
(C) RETURN OF PAYMENTS.
(1) RECOVERY AFTER NON-RECEIPT OF EXPECTED PAYMENT.
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
any Loan Party and such related payment is not received by Agent, then Agent
will be entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind together with interest thereon, for each
day from and including the date such amount is made available by Agent to such
Lender to but excluding the date of repayment to Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation.
(2) RECOVERY OF RETURNED PAYMENT. If Agent determines
at any time that any amount received by Agent under this Agreement must be
returned to any Loan Party or paid to any other Person pursuant to any
requirement of law, court order or otherwise, then, notwithstanding any other
term or condition of this Agreement, 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 any
Loan Party or such other Person, without set-off, counterclaim or deduction of
any kind.
9.9. [INTENTIONALLY OMITTED].
SECTION 10 BORROWING AGENCY
10.1. BORROWING AGENCY PROVISIONS.
(A) DESIGNATION OF BORROWING AGENT. Each Borrower hereby
irrevocably designates Borrowing Agent to be its attorney and agent and in such
capacity to borrow, sign and endorse notes, and execute and deliver all
instruments, documents, writings and further assurances now or hereafter
required hereunder, on behalf of such Borrower or Borrowers, and hereby
authorizes Agent to pay over or credit all loan proceeds hereunder in accordance
with the request of Borrowing Agent.
(B) INDEMNIFICATIONS. The handling of this credit facility as
a co-borrowing facility with a Borrowing Agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request.
Neither Agent nor any Lender shall incur liability to Borrowers as a result
thereof. To induce Agent and the Lenders to do so and in consideration thereof,
each Borrower hereby indemnifies Agent and each Lender and holds Agent and each
Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Agent or any Lender by
any Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Agent or any Lender on
any request or instruction from Borrowing Agent or any other action taken by
Agent or any Lender with respect to this Subsection 10.1(B) except due to
willful misconduct or gross (not mere) negligence by the indemnified party (as
determined by a court of competent jurisdiction in a final non-appealable
judgment).
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(C) OBLIGATIONS ABSOLUTE. All Obligations shall be joint and
several, and each Borrower shall make payment upon the maturity of the
Obligations by acceleration or otherwise, and such obligation and liability on
the part of each Borrower shall in no way be affected by any extensions,
renewals and forbearance granted by Agent or any Lender to any Loan Party,
failure of Agent or any Lender to give any Borrower notice of borrowing or any
other notice, any failure of Agent or any Lender to pursue or preserve its
rights against any Loan Party, the release by Agent or any Lender of any
Collateral now or thereafter acquired from any Loan Party, and such agreement by
each Loan Party to pay upon any notice issued pursuant thereto is unconditional
and unaffected by prior recourse by Agent or any Lender to the other Loan
Parties or any Collateral for such Loan Party's Obligations or the lack thereof,
irrespective of the validity, regularity or enforceability of this Agreement or
any other circumstances whatsoever.
(D) WAIVERS. Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Loan issued under or pursuant to this
Agreement, notice of the occurrence of any Default, Event of Default, or of any
demand for any payment under this Agreement, notice of any action at any time
taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement). Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Agent or Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of Agent or any Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including any failure strictly or diligently to assert any right or
to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section afford grounds
for terminating, discharging or relieving any Borrower, in whole or in part,
from any of its Obligations under this Section, it being the intention of each
Borrower that, so long as any of the Obligations hereunder remain unsatisfied,
the Obligations of each Borrower under this Section shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each Borrower under this Section shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or Agent or any Lender. Each Borrower represents and warrants to Agent and
Lenders that such Borrower is currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Obligations. Each Borrower
further represents and warrants to Agent and Lenders that such Borrower has read
and understands that terms and conditions of the Loan Documents. Each Borrower
hereby covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
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of the Obligations. Each Borrower waives all rights and defenses arising out of
an election of remedies by Agent or any Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Agent's or such Lender's rights of
subrogation and reimbursement against such Borrower. Each Borrower waives all
rights and defenses that such Borrower may have because the Obligations are
secured by real property. This means, among other things: (i) Agent may collect
from such Borrower without first foreclosing on any Collateral pledged by
Borrowers, and (ii) if Agent forecloses on any real property pledged by
Borrowers: (A) the amount of the Obligations may be reduced only by the price
for which that Collateral is sold at the foreclosure sale, even if the
Collateral is worth more than the sale price, (B) Agent and Lenders may collect
from such Borrower even if Agent or Lenders, by foreclosing on the real property
Collateral, has destroyed any right such Borrower may have to collect from the
other Borrowers. This is an unconditional and irrevocable waiver of any rights
and defenses such Borrower may have because the Obligations are secured by real
property.
10.2. WAIVER OF SUBROGATION. Each Loan Party expressly waives any and
all rights of subrogation, reimbursement, indemnity, exoneration, contribution
of any other claim which such Loan Party may now or hereafter have against the
other Loan Parties or other Person directly or contingently liable for the
Obligations hereunder, or against or with respect to the other Loan Parties'
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until termination of this Agreement and repayment in full of the Obligations.
10.3. Interdependent Companies. The Borrowers acknowledge and agree
that they are a part of an integrated, interdependent group of companies that on
a regular basis make intercompany loans to one another and that the Agent and
Lenders are relying upon the joint and several obligations of the Borrowers in
providing the financing accommodations described herein and would not have
provided such accommodations without such joint and several undertakings of all
of the Borrowers.
SECTION 11 GUARANTY
11.1. UNCONDITIONAL GUARANTY. Each Guarantor hereby unconditionally
guarantees, as a primary obligor and not merely as a surety, jointly and
severally with each other Guarantor when and as due, whether at maturity, by
acceleration, by notice of prepayment or otherwise, the due and punctual
performance of all Obligations of each other party hereto. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts that constitute part of the Obligations and would be owed by the
Borrowers to the Agent or the Lenders under any Loan Document but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Loan Party. Each
payment made by any Guarantor pursuant to this Guaranty shall be made in lawful
money of the United States in immediately available funds, (a) without set-off
or counterclaim and (b) free and clear of and without deduction or withholding
for or on account of any present and future Charges and any conditions or
restrictions resulting in Charges and all penalties, interest and other payments
on or in respect thereof (except for Charges based on the overall net income of
Agent or a Lender) ("Tax" or "Taxes") unless Guarantor is compelled by law to
make payment subject to such Taxes.
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11.2. TAXES. All Taxes in respect of this Guaranty or any amounts
payable or paid under this Guaranty shall be paid by Guarantor when due and in
any event prior to the date on which penalties attach thereto. Each Guarantor
will indemnify Agent and each of the Lenders against and in respect of all such
Taxes. Without limiting the generality of the foregoing, if any Taxes or amounts
in respect thereof must be deducted or withheld from any amounts payable or paid
by any Guarantor hereunder, such Guarantor shall pay such additional amounts as
may be necessary to ensure that the Agent and each of the Lenders receives a net
amount equal to the full amount which it would have received had payment
(including of any additional amounts payable under this Section 11.2) not been
made subject to such Taxes. Within thirty (30) days of each payment by any
Guarantor hereunder of Taxes or in respect of Taxes, such Guarantor shall
deliver to Agent satisfactory evidence (including originals, or certified
copies, of all relevant receipts) that such Taxes have been duly remitted to the
appropriate authority or authorities.
11.3. WAIVERS OF NOTICE, DEMAND, ETC. Each Guarantor hereby absolutely,
unconditionally and irrevocably waives (i) promptness, diligence, notice of
acceptance, notice of presentment of payment and any other notice hereunder,
(ii) demand of payment, protest, notice of dishonor or nonpayment, notice of the
present and future amount of the Obligations and any other notice with respect
to the Obligations, (iii) any requirement that the Agent or any Lender protect,
secure, perfect or insure any security interest or Lien or any property subject
thereto or exhaust any right or take any action against any other Loan Party, or
any Person or any Collateral, (iv) any other action, event or precondition to
the enforcement hereof or the performance by each such Guarantor of the
Obligations, and (v) any defense arising by any lack of capacity or authority or
any other defense of any Loan Party or any notice, demand or defense by reason
of cessation from any cause of Obligations other than payment and performance in
full of the Obligations by the Loan Parties and any defense that any other
guarantee or security was or was to be obtained by Agent.
11.4. NO INVALIDITY, IRREGULARITY, ETC. No invalidity, irregularity,
voidableness, voidness or unenforceability of this Agreement or any Loan
Document or any other agreement or instrument relating thereto, or of all or any
part of the Obligations or of any collateral security therefor shall affect,
impair or be a defense hereunder.
11.5. INDEPENDENT LIABILITY. The Guaranty hereunder is one of payment
and performance, not collection, and the obligations of each Guarantor hereunder
are independent of the Obligations of the other Loan Parties, and a separate
action or actions may be brought and prosecuted against any Guarantor to enforce
the terms and conditions of this Section 11.5, irrespective of whether any
action is brought against any other Loan Party or other Persons or whether any
other Loan Party or other Persons are joined in any such action or actions. Each
Guarantor waives any right to require that any resort be had by Agent or any
Lender to any security held for payment of the Obligations or to any balance of
any deposit account or credit on the books of any Agent or any Lender in favor
of any Loan Party or any other Person. No election to proceed in one form of
action or proceedings, or against any Person, or on any Obligations, shall
constitute a waiver of Agent's right to proceed in any other form of action or
proceeding or against any other Person unless Agent has expressed any such
waiver in writing. Without limiting the generality of the foregoing, no action
or proceeding by Agent against any Loan Party under any document evidencing or
securing indebtedness of any Loan Party to Agent shall diminish the liability of
any Guarantor hereunder, except to the extent Agent receives actual payment on
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account of Obligations by such action or proceeding, notwithstanding the effect
of any such election, action or proceeding upon the right of subrogation of any
Guarantor in respect of any Loan Party.
11.6. INDEMNITY. As an original and independent obligation under this
Guaranty, each Guarantor shall (a) indemnify the Agent and each of the Lenders
and keep the Agent and each of the Lenders indemnified against all costs,
losses, expenses and liabilities of whatever kind resulting from the failure by
any party to make due and punctual payment of any of the Obligations or
resulting from any of the Obligations being or becoming void, voidable,
unenforceable or ineffective against Borrowers (including, but without
limitation, all legal and other costs, Charges and expenses incurred by the
Agent and each of the Lenders, or any of them in connection with preserving or
enforcing, or attempting to preserve or enforce, its rights under this
Guaranty), except to the extent that any of the same results from the gross
negligence or willful misconduct by Agent or any Lender; and (b) pay on demand
the amount of such costs, losses, expenses and liabilities whether or not Agent
or any of the Lenders have attempted to enforce any rights against any Borrower
or any other Person or otherwise.
11.7. LIABILITY ABSOLUTE. The liability of each Guarantor hereunder
shall be absolute, unlimited and unconditional and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any claim, defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any other Obligation or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor shall not be discharged or impaired, released, limited or otherwise
affected by:
(i) any change in the manner, place or terms of
payment or performance, and/or any change or extension of the
time of payment or performance of, release, renewal or
alteration of, or any new agreements relating to any
Obligation, any security therefor, or any liability incurred
directly or indirectly in respect thereof, or any rescission
of, or amendment, waiver or other modification of, or any
consent to departure from, this Agreement or any Loan
Document, including any increase in the Obligations resulting
from the extension of additional credit to any Borrower or
otherwise;
(ii) any sale, exchange, release, surrender, loss,
abandonment, realization upon any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever
securing, all or any of the Obligations, and/or any offset
there against, or failure to perfect, or continue the
perfection of, any Lien in any such property, or delay in the
perfection of any such Lien, or any amendment or waiver of or
consent to departure from any other guaranty for all or any of
the Obligations;
(iii) the failure of the Agent or any Lender to
assert any claim or demand or to enforce any right or remedy
against any Borrower or any other Loan Party or any other
Person under the provisions of this Agreement or any Loan
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Document or any other document or instrument executed and
delivered in connection herewith or therewith;
(iv) any settlement or compromise of any Obligation,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof
or hereof, and any subordination of the payment of all or any
part thereof to the payment of any obligation (whether due or
not) of any Loan Party to creditors of any Loan Party other
than any other Loan Party;
(v) any manner of application of Collateral, or
proceeds thereof, to all or any of the Obligations, or any
manner of sale or other disposition of any Collateral for all
or any of the Obligations or any other assets of any Loan
Party; and
(vi) any other agreements or circumstance (including
any statute of limitations) of any nature whatsoever that may
or might in any manner or to any extent vary the risk of any
Guarantor, or that might otherwise at law or in equity
constitute a defense available to, or a discharge of, the
Guaranty hereunder and/or the obligations of any Guarantor, or
a defense to, or discharge of, any Loan Party or any other
Person or party hereto or the Obligations or otherwise with
respect to the Loans or other financial accommodations to any
Borrower pursuant to this Agreement and/or the Loan Documents.
11.8. ACTION BY AGENT WITHOUT NOTICE. The Agent shall have the right to
take any action set forth in Section 8.4 without notice to or the consent of any
Guarantor and each Guarantor expressly waives any right to notice of, consent
to, knowledge of and participation in any agreements relating to any of the
above or any other present or future event relating to Obligations whether under
this Agreement or otherwise or any right to challenge or question any of the
above and waives any defenses of such Guarantor which might arise as a result of
such actions.
11.9. APPLICATION OF PROCEEDS. Agent may at any time and from time to
time (whether prior to or after the revocation or termination of this Agreement)
without the consent of, or notice to, any Guarantor, and without incurring
responsibility to any Guarantor or impairing or releasing the Obligations, apply
any sums by whomsoever paid or howsoever realized to any Obligations regardless
of what Obligations remain unpaid.
11.10. CONTINUING EFFECTIVENESS.
(A) REINSTATEMENT. The Guaranty provisions herein contained
shall continue to be effective or be reinstated, as the case may be, if claim is
ever made upon the Agent or any Lender for repayment or recovery of any amount
or amounts received by such Person in payment or on account of any of the
Obligations and such Person repays all or part of said amount for any reason
whatsoever, including, without limitation, by reason of any judgment, decree or
order of any court or administrative body having jurisdiction over such Person
or the respective property of each, or any settlement or compromise of any claim
effected by such Person with any such claimant (including any Loan Party); and
in such event each Guarantor hereby agrees that any such judgment, decree,
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order, settlement or compromise or other circumstances shall be binding upon
such Guarantor, notwithstanding any revocation hereof or the cancellation of any
note or other instrument evidencing any Obligation, and each Guarantor shall be
and remain liable to the Agent and/or the Lenders for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by such Person(s).
(B) NO MARSHALLING. Agent shall not be required to marshal any
assets in favor of any Guarantor, or against or in payment of Obligations.
(C) PRIORITY OF CLAIMS. No Guarantor shall be entitled to
claim against any present or future security held by Agent from any Person for
Obligations in priority to or equally with any claim of Agent, or assert any
claim for any liability of any Loan Party to any Guarantor in priority to or
equally with claims of Agent for Obligations, and no Guarantor shall be entitled
to compete with Agent with respect to, or to advance any equal or prior claim to
any security held by Agent for Obligations.
(D) INVALIDATED PAYMENTS. If any Loan Party makes any payment
to Agent, which payment is wholly or partly subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to any
Person under any federal or provincial statute or at common law or under
equitable principles, then to the extent of such payment, the Obligation
intended to be paid shall be revived and continued in full force and effect as
if the payment had not been made, and the resulting revived Obligation shall
continue to be guaranteed, uninterrupted, by each Guarantor hereunder.
(E) ASSIGNMENT AND WAIVER. All present and future monies
payable by any Loan Party to any Guarantor, whether arising out of a right of
subrogation or otherwise, are assigned to Agent for its benefit and for the
ratable benefit of the Lenders as security for such Guarantor's liability to
Agent and the Lenders hereunder and, except (so long as no Default or Event of
Default has occurred and is continuing) for monies payable by any Loan Party to
any Guarantor in the ordinary course of business, each Guarantor waives any
right to demand any and all present and future monies payable by any Loan Party
to such Guarantor, whether arising out of a right of subrogation or otherwise.
Except to the extent prohibited otherwise by this Agreement, all monies received
by any Guarantor from any Loan Party shall be held by such Guarantor as agent
and trustee for Agent. This assignment and waiver shall only terminate when the
Obligations are paid in full in cash and this Agreement is irrevocably
terminated.
(F) PAYMENTS TO GUARANTORS. Each Loan Party acknowledges this
assignment and waiver and, except as otherwise set forth herein, agrees to make
no payments, except (so long as no Default or Event of Default has occurred and
is continuing) in the ordinary course of business consistent with past
practices, to any Guarantor without the prior written consent of Agent. Each
Loan Party agrees to give full effect to the provisions hereof.
11.11. ENFORCEMENT. Upon the occurrence and during the continuance of
any Event of Default, Agent may and upon written request of the Requisite
Lenders shall, without notice to or demand upon any Loan Party or any other
Person, declare any obligations of such Guarantor hereunder immediately due and
payable, and shall be entitled to enforce the obligations of each Guarantor.
Upon such declaration by Agent, Agent and the Lenders are hereby authorized at
any time and from time to time to set off and apply any and all deposits
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(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Agent or the Lenders to or for the
credit or the account of any Guarantor against any and all of the obligations of
each Guarantor now or hereafter existing hereunder, whether or not Agent or the
Lenders shall have made any demand hereunder against any other Loan Party and
although such obligations may be contingent and unmatured. The rights of Agent
and the Lenders hereunder are in addition to other rights and remedies
(including other rights of set-off) which Agent and the Lenders may have. Upon
such declaration by Agent, with respect to any claims (other than those claims
referred to in the immediately preceding paragraph) of any Guarantor against any
Loan Party (the "Claims"), Agent shall have the full right on the part of Agent
in its own name or in the name of such Guarantor to collect and enforce such
Claims by legal action, proof of debt in bankruptcy or other liquidation
proceedings, vote in any proceeding for the arrangement of debts at any time
proposed, or otherwise, Agent and each of its officers being hereby irrevocably
constituted attorneys-in-fact for each Guarantor for the purpose of such
enforcement and for the purpose of endorsing in the name of each Guarantor any
instrument for the payment of money. Each Guarantor will receive as trustee for
Agent and will pay to Agent forthwith upon receipt thereof any amounts which
such Guarantor may receive from any Loan Party on account of the Claims. Each
Guarantor agrees that at no time hereafter will any of the Claims be represented
by any notes, other negotiable instruments or writings, except and in such event
they shall either be made payable to Agent, or if payable to any Guarantor,
shall forthwith be endorsed by such Guarantor to Agent. Each Guarantor agrees
that no payment on account of the Claims or any security interest therein shall
be created, received, accepted or retained during the continuance of any Event
of Default nor shall any financing statement be filed with respect thereto by
any Guarantor.
11.12. STATUTE OF LIMITATIONS. Any acknowledgment or new promise,
whether by payment of principal or interest or otherwise and whether by any Loan
Party or others with respect to any of the Obligations shall, if the statute of
limitations in favor of any Guarantor against the Agent or the Lenders shall
have commenced to run, toll the running of such statute of limitations and, if
the period of such statute of limitations shall have expired, prevent the
operation of such statute of limitations.
11.13. INTEREST. All amounts due, owing and unpaid from time to time by
any Guarantor hereunder shall bear interest at the interest rate per annum then
chargeable with respect to Base Rate Loans (without duplication of interest on
the underlying Obligation).
11.14. CURRENCY CONVERSION. Without limiting any other rights in this
Agreement, if for the purposes of obtaining judgment in any court in any
jurisdiction with respect to this Guaranty or any other Loan Document it becomes
necessary to convert into the currency of such jurisdiction (herein called the
"Judgment Currency") any amount due hereunder in any currency other than the
Judgment Currency, then conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which judgment is given. For
this purpose, "rate of exchange" means the rate at which Agent would, on the
relevant date at or about 12:00 noon (New York City time), be prepared to sell a
similar amount of such currency in New York, New York against the Judgment
Currency. In the event that there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is given and the
date of payment of the amount due, Guarantor will, on the date of payment, pay
such additional amounts (if any) as may be necessary to ensure that the amount
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paid on such date is the amount in the Judgment Currency which when converted at
the rate of exchange prevailing on the date of payment is the amount then due
under this Guaranty or any other Loan Document in such other currency. Any
additional amount due from Guarantor under this Section 11.15 will be due as a
separate debt and shall not be affected by judgment being obtained for any other
sums due under or in respect of this Agreement or any of the other Loan
Documents.
11.15. ACKNOWLEDGEMENT. Each Guarantor acknowledges receipt of a copy
of each of this Agreement and the other Loan Documents. Each Guarantor has made
an independent investigation of the Loan Parties and of the financial condition
of the Loan Parties. Neither Agent nor any Lender has made and neither Agent nor
any Lender does make any representations or warranties as to the income,
expense, operation, finances or any other matter or thing affecting any Loan
Party nor has Agent or any Lender made any representations or warranties as to
the amount or nature of the Obligations of any Loan Party to which this Section
11 applies as specifically herein set forth, nor has Agent or any Lender or any
officer, agent or employee of Agent or any Lender or any representative thereof,
made any other oral representations, agreements or commitments of any kind or
nature, and each Guarantor hereby expressly acknowledges that no such
representations or warranties have been made and such Guarantor expressly
disclaims reliance on any such representations or warranties.
11.16. CONTINUING EFFECTIVENESS. The provisions of this Section 11
shall remain in effect until the indefeasible payment in full in cash of all
Obligations and irrevocable termination of this Agreement. Payments received
from Guarantors pursuant to this Section 11 shall be applied in accordance with
Section 8.7 of this Agreement.
11.17. [INTENTIONALLY OMITTED].
SECTION 12 MISCELLANEOUS
12.1. EXPENSES AND ATTORNEYS' FEES. Whether or not the transactions
contemplated hereby shall be consummated, each Loan Party agrees to promptly pay
all fees, costs and expenses incurred in connection with any matters
contemplated by or arising out of this Agreement or the other Loan Documents
including the following, and all such fees, costs and expenses shall be part of
the Obligations, payable on demand and secured by the Collateral: (a) fees,
costs and expenses incurred by Agent (including reasonable attorneys' fees and
expenses, the allocated costs of Agent's internal legal staff and fees of
environmental consultants, accountants and other professionals retained by
Agent) incurred in connection with the examination, review, due diligence
investigation, documentation and closing of the financing arrangements evidenced
by the Loan Documents; (b) fees, costs and expenses incurred by Agent (including
reasonable attorneys' fees and expenses, the allocated costs of Agent's internal
legal staff and fees of environmental consultants, accountants and other
professionals retained by Agent) incurred in connection with the review,
negotiation, preparation, documentation, execution, syndication and
administration of the Loan Documents, the Loans, and any amendments, waivers,
consents, forbearances and other modifications relating thereto or any
subordination or intercreditor agreements, including reasonable documentation
charges assessed by Agent for amendments, waivers, consents and any other
documentation prepared by Agent's internal legal staff; (c) fees, costs and
expenses (including reasonable attorneys' fees and allocated costs of internal
legal staff) incurred by Agent or any Lender in creating, perfecting and
maintaining perfection of Liens in favor of Agent, on behalf of Agent and
Lenders; (d) fees, costs and expenses incurred by Agent in connection with
forwarding to Borrowers the proceeds of Loans including Agent's or any Lenders'
standard wire transfer fee; (e) fees, costs, expenses (including reasonable
attorneys' fees and allocated costs of internal legal staff) of Agent or any
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Lender and costs of settlement incurred in collecting upon or enforcing rights
against the Collateral or incurred in any action to enforce this Agreement or
the other Loan Documents or to collect any payments due from any Borrower or any
other Loan Party under this Agreement or any other Loan Document or incurred in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement, whether in the nature of a "workout" or in
connection with any insolvency or bankruptcy proceedings or otherwise.
12.2. INDEMNITY. In addition to the payment of expenses pursuant to
subsection 12.1, whether or not the transactions contemplated hereby shall be
consummated, each Loan Party agrees to indemnify, pay and hold Agent and each
Lender, and the officers, directors, employees, agents, consultants, auditors,
persons engaged by Agent or any Lender, to evaluate or monitor the Collateral,
affiliates and attorneys of Agent, Lender and such holders (collectively called
the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnity shall be designated a party thereto)
that may be imposed on, incurred by, or asserted against that Indemnity, in any
manner relating to or arising out of this Agreement or the other Loan Documents,
the consummation of the transactions contemplated by this Agreement, the
statements contained in the commitment letters, if any, delivered by Agent or
any Lender, Agent's and each Lender's agreement to make the Loans hereunder, the
use or intended use of the proceeds of any of the Loans or the exercise of any
right or remedy hereunder or under the other Loan Documents (the "Indemnified
Liabilities"); provided that no Loan Party shall have any obligation to an
Indemnitee hereunder with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of that Indemnitee as determined by a
final non-appealable judgment by a court of competent jurisdiction.
12.3. NOTICES. Unless otherwise specifically provided herein, all
notices shall be in writing addressed to the respective party as set forth below
and may be personally served, faxed, telecopied or sent by overnight courier
service or United States mail and shall be deemed to have been given: (a) if
delivered in person, when delivered; (b) if delivered by fax or telecopy, on the
date of transmission if transmitted on a Business Day before 4:00 p.m. New York
City time or, if not, on the next succeeding Business Day; (c) if delivered by
overnight courier, two (2) days after delivery to such courier properly
addressed; or (d) if by U.S. Mail, four (4) Business Days after depositing in
the United States mail, with postage prepaid and properly addressed.
If to Borrowing Agent
or any Loan Party: Xxxxxxx Industries, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxx 00000-0000
Attention: Corporate Secretary
Fax/Telecopy No.: (000) 000-0000
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With a copy to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax/Telecopy No.: (000) 000-0000
If to Agent or to ORIX: ORIX Finance Corp.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx
Fax/Telecopy No.: (000) 000-0000
With a copy to: ORIX Finance Corp.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxxxx
Fax/Telecopy No.: (000) 000-0000
and
Kasowitz, Benson, Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
Fax/Telecopy No.: (000) 000-0000
If to any Lender: Its address indicated on the signature page hereto,
in an Assignment and Acceptance Agreement or in a notice to Agent and Borrowing
Agent or to such other address as the party addressed shall have previously
designated by written notice to the serving party, given in accordance with this
subsection 12.3.
12.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND CERTAIN
AGREEMENTS. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of each Loan Party, Agent, and Lenders set forth in
subsections 9.1(E), 12.1, 12.2, 12.6, 12.11, 12.14, and 12.15 shall survive the
payment of the Loans and the termination of this Agreement.
12.5. INDULGENCE NOT WAIVER. No failure or delay on the part of Agent,
any Lender or any holder of any Note in the exercise of any power, right or
privilege hereunder or under any Note shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.
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12.6. MARSHALING; PAYMENTS SET ASIDE. Neither Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Loan Party
or any other party or against or in payment of any or all of the Obligations. To
the extent that any Loan Party makes a payment or payments to Agent and/or any
Lender or Agent and/or any Lender enforces its security interests or exercises
its rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
12.7. ENTIRE AGREEMENT. This Agreement and the other Loan Documents
embody the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether written or
oral, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.
12.8. SEVERABILITY. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement or the
other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
or the other Loan Documents.
12.9. LENDERS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS. The obligation of each Lender hereunder is several and not joint and
neither Agent nor any Lender shall be responsible for the obligation or
Commitment of any other Lender hereunder. In the event that any Lender at any
time should fail to make a Loan as herein provided, the Lenders, or any of them,
at their sole option, may make the Loan that was to have been made by the Lender
so failing to make such Loan. Nothing contained in any Loan Document and no
action taken by Agent or any Lender pursuant hereto or thereto shall be deemed
to constitute Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and, provided Agent fails or
refuses to exercise any remedies against any Loan Party after receiving the
direction of the Requisite Lenders, each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
12.10. HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
12.11. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES BUT INCLUDING AND
GIVING EFFECT TO SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW), EXCEPT TO THE EXTENT ANY SUCH OTHER LOAN DOCUMENT EXPRESSLY SELECTS THE
LAW OF ANOTHER JURISDICTION AS GOVERING LAW THEREOF, IN WHICH CASE THE LAW OF
SUCH OTHER JURISDICTION SHALL GOVERN.
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12.12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, no Loan Party may assign its rights or obligations
hereunder without the written consent of Lenders.
12.13. NO FIDUCIARY RELATIONSHIP; NO DUTY; LIMITATION OF LIABILITIES.
(A) NO FIDUCIARY RELATIONSHIP. No provision in this Agreement
or in any of the other Loan Documents and no course of dealing between the
parties shall be deemed to create any fiduciary duty by Agent or any Lender to
any Loan Party.
(B) NO DUTY. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by Agent or any Lender shall have
the right to act exclusively in the interest of Agent or such Lender and shall
have no duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to any Loan Party or any of any Loan
Party's shareholders or any other Person.
(C) LIMITATION OF LIABILITIES. Neither Agent nor any Lender,
nor any affiliate, officer, director, shareholder, employee, attorney, or agent
of Agent or any Lender shall have any liability with respect to, and each Loan
Party hereby waives, releases, and agrees not to xxx any of them upon, any claim
for any special, indirect, incidental, or consequential damages suffered or
incurred by any Loan Party in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Each Loan Party hereby waives, releases, and agrees not to xxx Agent or any
Lender or any of Agent's or any Lender's affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the transactions contemplated hereby.
12.14. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW
YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH
LOAN PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH LOAN PARTY HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON BORROWING AGENT BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWING AGENT, AT THE ADDRESS SET FORTH
IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE
SAME HAS BEEN POSTED. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE
RESOLUTION PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
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DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF EACH LOAN PARTY OR
OF ITS AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF SUCH
LOAN PARTY FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE
PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE). EACH LOAN PARTY AGREES THAT AGENT'S OR ANY LENDER'S COUNSEL
IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS
AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM
MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. EACH LOAN
PARTY IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN
ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED
BY AGENT OR ANY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC
OR OTHER FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE.
12.15. WAIVER OF JURY TRIAL. EACH LOAN PARTY, AGENT AND EACH LENDER
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
EACH LOAN PARTY, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH LOAN PARTY, AGENT AND EACH LENDER WARRANT AND REPRESENT THAT EACH HAS HAD
THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
12.16. CONSTRUCTION. Each Loan Party, Agent and each Lender each
acknowledge that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel. This Agreement and the other Loan Documents
shall be construed as if jointly drafted by Loan Parties, Agent and each Lender.
12.17. COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments,
waivers, consents, or supplements may be executed via telecopier or facsimile or
other electronic method of transmission in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
12.18. CONFIDENTIALITY. Agent and each Lender agree to exercise their
best efforts to keep confidential any non-public information delivered pursuant
to the Loan Documents and identified as such by Loan Parties and not to disclose
such information to Persons other than to: its respective affiliates, officers,
directors and employees; or its potential assignees ; or Persons employed by or
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engaged by Agent, a Lender or a Lender's assignees including, without
limitation, attorneys, auditors, professional consultants, rating agencies and
portfolio management services. The confidentiality provisions contained in this
subsection shall not apply to disclosures (a) required to be made by Agent or
any Lender to any regulatory or governmental agency or pursuant to legal process
or (b) consisting of general portfolio information that does not identify any
Loan Party. The obligations of Agent and Lenders under this subsection 12.18
shall supersede and replace the obligations of Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered by
Agent or any Lender prior to the date hereof. In no event shall Agent or any
Lender be obligated or required to return any materials furnished by Loan
Parties; provided, however, each potential assignee shall be required to agree
that if it does not become an assigneeit shall return all materials furnished to
it by Loan Parties in connection herewith.
Notwithstanding the foregoing, and notwithstanding any other express or implied
agreement or understanding to the contrary, each of the parties hereto and their
respective employees, representatives, and other agents are authorized to
disclose the tax treatment and tax structure of these transactions to any and
all persons, without limitation of any kind. Each of the parties hereto may
disclose all materials of any kind (including opinions or other tax analyses)
insofar as they relate to the tax treatment and tax structure of the
transactions contemplated by the Loan Documents. This authorization does not
extend to disclosure of any other information including (without limitation) (a)
the identities of participants or potential participants in the transactions (b)
the existence or status of any negotiations, (c) any pricing other financial
information or (d) any other term or detail not related to the tax treatment and
tax structure of the transactions contemplated by the Loan Documents.
12.19. PUBLICATION. Each Loan Party consents to the publication by
Agent of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement; provided, however, Agent shall
provide a draft of any such tombstone or similar advertising material to
Borrowing Agent for review prior to the publication thereof. Agent and Lenders
reserve the right to provide industry trade organizations information necessary
and customary for inclusion in league table measurements.
12.20. SPECIAL PROVISIONS RELATING TO XXXXXXX AND ITS SUBSIDIARIES.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, neither Xxxxxxx nor any of its direct or indirect
Subsidiaries shall be bound by the terms of this Agreement or any other Loan
Document, or be a "Borrower", "Guarantor" or "Loan Party" hereunder or
thereunder until the consummation of the Merger, PROVIDED that Xxxxxxx and its
direct and indirect Subsidiaries shall be considered "Borrowers", "Guarantors"
or "Loan Parties", as applicable, solely for the purposes of any representation
or warranty contained in this Agreement or any other Loan Document, and any such
representation or warranty with respect to Xxxxxxx or its direct or indirect
Subsidiaries shall be deemed made to Agent and Lenders, jointly and severally,
by Holdings and CS Acquisition until the consummation of the Merger at which
time Xxxxxxx and each of its Subsidiaries that is a Loan Party hereunder shall
be deemed to have made each such representation and warranty directly to Agent
and Lenders.
12.21. INTERCREDITOR AGREEMENT. This Agreement is subject to the
Subordination and Intercreditor Agreement, dated as of October 31, 2006, among
each Loan Party (as defined below), ORIX Finance Corp., as Subordinated Agent
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and GMAC Commercial Finance Corp., as Senior Agent, under which this Agreement
and each Loan Party's obligations hereunder are subordinated in the manner set
forth therein to the prior payment of certain obligations to the holders of
Senior Indebtedness as defined therein.
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Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
CS ACQUISITION CORP., as a Borrower
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
XXXXXXX I HOLDING CORP., as a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
ORIX FINANCE CORP., as Agent and as a
Lender
By: /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------------
Title: Authorized Representative
--------------------------------
Term Loan Commitment: $45,000,000.00
[SIGNATURE PAGES CONTINUE ON FOLLOWING PAGE]
Upon the consummation of the Merger, each signatory hereto agrees that
it shall be bound as a Borrower and/or Guarantor under this Agreement, and all
references to "Borrower", "Borrowers", "Guarantor", "Guarantors", "Loan Party"
or "Loan Parties" contained in this Agreement or any of the other Loan
Documents, shall thereafter be deemed to include each signatory hereto.
XXXXXXX INDUSTRIES, INC., as a Borrower
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
XXXXXXX BUS CORPORATION, as a Borrower
and a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
WHEELED COACH INDUSTRIES, INC., as a
Borrower and a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
CAPACITY OF TEXAS, INC., as a Borrower
and a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
[SIGNATURE PAGES CONTINUE ON FOLLOWING PAGE]
MID BUS, INC., as a Borrower and a
Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
MOBILE PRODUCTS, INC., as a Borrower
and a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
XXXXXXX AMBULANCE CORP., as a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
WHEELED COACH ENTERPRISES, INC., as a
Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
[SIGNATURE PAGES CONTINUE ON FOLLOWING PAGE]
- 2 -
MOBILE-TECH CORPORATION, as a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
WORLD TRANS, INC., as a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
BRUTZER CORPORATION, as a Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
XXXXXXX FINANCIAL SERVICES, INC., as a
Guarantor
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
FEIN:
---------------------------------
- 3 -
EXHIBITS
A. Assignment and Acceptance Agreement
B. Borrowing Base Certificate
C. Compliance Certificate
D. Notice of Borrowing
E. Inventory Report
F. Reconciliation Report
SCHEDULES
1.1(A) Foreign Account Debtors
2.7(A) Commercial Tort Claims
3.1(A) List of Closing Documents
3.1(Y) Indebtedness to be Defeased
4.1(A) Chief Executive Office and Organizational Identification Number
4.1(B) Capitalization of Loan Parties
4.4 Pro Forma
4.5(A) Deductions and Discounts
4.5(I) Intellectual Property
4.5(K) Deposit Accounts
4.5(L) Bailees
4.6 Business and Trade Names (Present and Past Five Years); Location of
Principal Place of Business, Books and Records and Collateral; State
(other Jurisdiction) of Organization and Organizational Identification
Number
4.7(a-1) Owned Real Properties
4.7(a-2) Leased Real Properties
4.9 Federal Tax Identification Numbers
4.11 Employee Benefit Plans
4.12 Broker's or Finder's Fees
4.13 Environmental Matters
4.18 Employee Matters
5.4 Mortgaged Property
7.1 Indebtedness
7.11 Subsidiaries
7.3(B) Other Liens
RIDERS
A. Reporting Rider
B. Financial Covenants Rider
REPORTING RIDER
This Reporting Rider is attached and made a part of that certain
Revolving Credit, Term Loan and Security Agreement, dated as of October 31, 2006
and entered into among CS Acquisition Corp., Xxxxxxx Industries, Inc., certain
Affiliates, ORIX Finance Corp., as Agent, and certain Lenders.
1. ANNUAL FINANCIAL STATEMENTS. Furnish Agent within ninety (90) days
after the end of each fiscal year of Loan Parties, financial statements of
Holdings and its Subsidiaries on a consolidating and consolidated basis
including, but not limited to, statements of income and stockholders' equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon without qualification by
the Loan Parties' Accountants The report of the Loan Parties' Accountants shall
be accompanied by a statement of the Loan Parties' Accountants certifying that
(i) they have caused the Loan Agreement to be reviewed, (ii) in making the
examination upon which such report was based either no information came to their
attention which to their knowledge constituted an Event of Default or a Default
under this Agreement or any related agreement or, if such information came to
their attention, specifying any such Default or Event of Default, its nature,
when it occurred and whether it is continuing, and such report shall contain or
have appended thereto calculations which set forth Loan Parties' compliance with
the covenant set forth on the Financial Covenants Rider. In addition, the
reports shall be accompanied by a certificate of each Loan Party's Chief
Financial Officer which shall state that, based on an examination sufficient to
permit him to make an informed statement, no Default or Event of Default exists,
or, if such is not the case, specifying such Default or Event of Default, its
nature, when it occurred, whether it is continuing and the steps being taken by
Loan Parties with respect to such event, and such certificate shall have
appended thereto calculations which set forth Loan Parties' compliance with the
covenants set forth on the Financial Covenants Rider.
2. [INTENTIONALLY OMITTED].
3. MONTHLY FINANCIAL STATEMENTS. Furnish Agent within thirty (30) days
after the end of each month, an unaudited balance sheet of Holdings and its
Subsidiaries on a consolidated and consolidating basis and unaudited statements
of income and stockholders' equity and cash flow of Holdings and its
Subsidiaries on a consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of such month and
for such month, prepared on a basis consistent with prior practices and complete
and correct in all material respects, subject to normal and recurring year end
adjustments that individually and in the aggregate are not material to the
business of Loan Parties. Each such balance sheet, statement of income and
stockholders' equity and statement of cash flow shall set forth a comparison of
the figures for (w) the current fiscal period and (x) the current year-to-date
with the figures for (y) the same fiscal period and year-to-date period of the
immediately preceding fiscal year and (z) the projections for such fiscal period
and year-to-date period delivered pursuant to item 12 hereof. The financial
statements shall be accompanied by a certificate of Holdings' Chief Financial
Officer, which shall state that, based on an examination sufficient to permit
him to make an informed statement, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default, its nature,
when it occurred, whether it is continuing and the steps being taken by Loan
Parties with respect to such event and, such certificate shall have appended
thereto calculations which set forth Loan Parties' compliance with the covenants
set forth on the Financial Covenants Rider.
4. BORROWING BASE CERTIFICATE. Deliver to Agent a simultaneous copy of
any Borrowing Base Certificate delivered to First Lien Agent under the First
Lien Loan Documents.
5. COLLATERAL REPORTS. Deliver to Agent on or before the fifteenth
(15th) day of each month as and for the prior month (a) accounts receivable
agings, (b) accounts payable agings, and (c) Inventory reports. In addition,
each Loan Party shall deliver to Agent at such intervals as Agent may require:
(i) confirmatory assignment schedules, (ii) copies of Customer's invoices, (iii)
evidence of shipment or delivery, and (iv) such further schedules, documents
and/or information regarding the Collateral as Agent may require including,
without limitation, trial balances and test verifications. Agent shall have the
right to confirm and verify all Accounts by any manner and through any medium it
considers advisable and do whatever it may deem reasonably necessary to protect
its interests hereunder. The items to be provided under items (4) and (5) hereof
are to be in form reasonably satisfactory to Agent and executed by Borrowing
Agent and delivered to Agent from time to time solely for Agent's convenience in
maintaining records of the Collateral, and Borrowing Agent's failure to deliver
any of such items to Agent shall not affect, terminate, modify or otherwise
limit Agent's Lien with respect to the Collateral.
6. DISCLOSURE OF MATERIAL MATTERS. Immediately upon learning thereof,
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
any Loan Party's reclamation or repossession of, or the return to any Loan Party
of, a material amount of goods or claims or disputes asserted by any Customer or
other obligor.
7. [INTENTIONALLY OMITTED].
8. MATERIAL OCCURRENCES. Promptly notify Agent in writing upon the
occurrence of (a) any Event of Default or Default with such notice stating that
it is a "Notice of Default"; (b) any event of default under the First Lien Loan
Documents; (c) any event which with the giving of notice or lapse of time, or
both, would constitute an event of default under the First Lien Loan Documents;
(d) any event, development or circumstance whereby any financial statements or
other reports furnished to Agent fail in any material respect to present fairly,
in accordance with GAAP consistently applied, the financial condition or
operating results of any Loan Party as of the date of such statements; (e) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the IRC, could subject any Loan Party to a tax imposed by Section 4971 of the
IRC; (f) each and every default by any Loan Party which might result in the
acceleration of the maturity of any Indebtedness, including the names and
addresses of the holders of such Indebtedness with respect to which there is a
default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (g) any other development
in the business or affairs of any Loan Party which could reasonably be expected
to have a Material Adverse Effect; in each case describing the nature thereof
and the action Loan Parties propose to take with respect thereto.
9. LITIGATION. Promptly notify Agent in writing of any litigation, suit
or administrative proceeding affecting any Loan Party, whether or not the claim
is covered by insurance, and of any suit or administrative proceeding, which in
any such case would reasonably be expected to have a Material Adverse Effect.
10. OTHER REPORTS. Furnish Agent as soon as available, but in any event
concurrently with the issuance thereof, (i) with copies of such financial
statements, material reports and material returns as each Loan Party shall send
to its stockholders and (ii) copies of all notices, reports or other information
sent pursuant to the First Lien Loan Documents.
11. ADDITIONAL INFORMATION. Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement have been complied with by Loan Parties including, without limitation
and without the necessity of any request by Agent, (a) copies of all
environmental audits and reviews, (b) at least thirty (30) days prior thereto,
notice of any Loan Party's opening of any new office or place of business or any
Loan Party's closing of any existing office or place of business, and (c)
promptly upon any Loan Party's learning thereof, notice of any labor dispute to
which any Loan Party may become a party, any strikes or walkouts relating to any
of its plants or other facilities, and the expiration of any labor contract to
which any Loan Party is a party or by which any Loan Party is bound.
12. PROJECTED OPERATING BUDGET. Furnish Agent, prior to the beginning
of each fiscal year of Holdings, commencing with the fiscal year commencing
November 1, 2007, a month by month projected operating budget and cash flow of
Holdings and its Subsidiaries on a consolidated and consolidating basis for such
fiscal year (including an income statement for each month and a balance sheet as
at the end of the last month in each fiscal quarter), such projections to be
accompanied by a certificate signed by the President or Chief Financial Officer
of each Loan Party to the effect that such projections have been prepared on the
basis of sound financial planning practice consistent with past budgets and
financial statements and that such officer has no reason to question the
reasonableness of any material assumptions on which such projections were
prepared.
13. VARIANCES FROM OPERATING BUDGET. Furnish Agent, concurrently with
the delivery of the financial statements referred to in item 1 hereof, a written
report summarizing all material variances from budgets submitted by Loan Parties
pursuant to item 12 hereof and a discussion and analysis by management with
respect to such variances.
14. NOTICE OF SUITS, ADVERSE EVENTS. Furnish Agent with prompt notice
of (i) any lapse or other termination of any Consent issued to any Loan Party by
any Governmental Authority or any other Person that is material to the operation
of any Loan Party's business, (ii) any refusal by any Governmental Authority or
any other Person to renew or extend any such Consent; and (iii) copies of any
periodic or special reports filed by any Loan Party with any Governmental
Authority or Person, if such reports indicate any material change in the
business, operations, affairs or condition of any Loan Party, or if copies
thereof are requested by Agent or any Lender, and (iv) copies of any material
notices and other communications from any Governmental Authority or Person which
specifically relate to any Loan Party.
15. ERISA NOTICES AND REQUESTS. Furnish Agent with immediate written
notice in the event that (i) any Loan Party or any member of the Controlled
Group knows or has reason to know that a Termination Event has occurred,
together with a written statement describing such Termination Event and the
action, if any, which such Loan Party or member of the Controlled Group has
taken, is taking, or proposes to take with respect thereto and, when known, any
action taken or threatened by the IRS, Department of Labor or PBGC with respect
thereto, (ii) any Loan Party or any member of the Controlled Group knows or has
reason to know that a prohibited transaction (as defined in Sections 406 of
ERISA and 4975 of the IRC) has occurred together with a written statement
describing such transaction and the action which such Loan Party or any member
of the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Loan Party or any member of the
Controlled Group with respect to such request, (iv) any increase in the benefits
of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Loan Party or any member of the
Controlled Group was not previously contributing shall occur, (v) any Loan Party
or any member of the Controlled Group shall receive from the PBGC a notice of
intention to terminate a Plan or to have a trustee appointed to administer a
Plan, together with copies of each such notice, (vi) any Loan Party or any
member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the IRS regarding the qualification of a Plan under
Section 401(a) of the IRC, together with copies of each such letter; (vii) any
Loan Party or any member of the Controlled Group shall receive a notice
regarding the imposition of withdrawal liability, together with copies of each
such notice; (viii) any Loan Party or any member of the Controlled Group shall
fail to make a required installment or any other required payment under Section
412 of the IRC on or before the due date for such installment or payment; (ix)
any Loan Party or any member of the Controlled Group knows that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
16. ENVIRONMENTAL REPORTS. Furnish Agent, concurrently with the
delivery of the financial statements referred to in items 1 and 3 hereof, with a
certificate signed by the President of each Loan Party stating, to the best of
his knowledge, that each Loan Party is in compliance in all material respects
with all federal, state and local laws relating to environmental protection and
control and occupational safety and health. To the extent any Loan Party is not
in compliance with the foregoing laws, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action Loan Party will
implement in order to achieve full compliance.
17. CHASSIS STATUS REPORT. Borrowers shall furnish Agent as soon as
available, but in any event concurrently with the receipt by Borrowers thereof,
with copies of all notices, reports or other information sent by the trustee
under the Trust Agreement to Borrowers or the First Lien Lenders.
18. ADDITIONAL DOCUMENTS. Execute and deliver to Agent, upon request,
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement.
FINANCIAL COVENANTS RIDER
This Financial Covenants Rider is attached and made a part of that certain Loan and Security Agreement,
dated as of October 31, 2006 and entered into among CS Acquisition Corp., Xxxxxxx Industries, Inc., certain
Affiliates of Xxxxxxx Industries, Inc., ORIX Finance Corp., as Agent, and certain Lenders.
A. MINIMUM EBITDA. Holdings and its Subsidiaries on a consolidated
basis shall at all times maintain EBITDA of at least the amounts set forth below
for each rolling twelve (12) month period ending on the last day of each fiscal
quarter set forth below.
Fiscal Quarter Ending Amount
--------------------- ------
January 31, 2007 $21,000,000
April 30, 2007 $18,000,000
July 31, 2007 $17,000,000
October 31, 2007 $16,000,000
January 31, 2008 $17,000,000
April 30, 2008 $17,500,000
July 31, 2008 and the last day of each $18,000,000
fiscal quarter ending thereafter
B. TOTAL LEVERAGE. Holdings and its Subsidiaries on a consolidated
basis shall not permit the ratio of (a) Holdings' and its Subsidiaries'
Indebtedness on a consolidated basis, to (b) Holdings' and its Subsidiaries'
EBITDA for the trailing twelve months on a consolidated basis, each calculated
as of the last day of any fiscal quarter set forth below to be greater than the
ratio set forth below for such periods:
Fiscal Quarter Ending Ratio
--------------------- -----
January 31, 2007 4.75 to 1.0
April 30, 2007 4.75 to 1.0
July 31, 2007 4.75 to 1.0
October 31, 2007 4.75 to 1.0
January 31, 2008 4.50 to 1.0
April 30, 2008 4.50 to 1.0
July 31, 2008 4.25 to 1.0
October 31, 2008 4.25 to 1.0
January 31, 2009 4.00 to 1.0
April 30, 2009 4.00 to 1.0
July 31, 2009 4.00 to 1.0
October 31, 2009 4.00 to 1.0
January 31, 2010 3.75 to 1.0
April 30, 2010 3.75 to 1.0
July 31, 2010 3.75 to 1.0
October 31, 2010 3.75 to 1.0
January 31, 2011 and the last day of each 3.50 to 1.00
fiscal quarter ending thereafter
C. CAPITAL EXPENDITURE LIMITS. The aggregate amount of all Capital
Expenditures, (excluding, in each case, expenditures for trade-ins and
replacement of assets to the extent funded with casualty insurance proceeds) of
Holdings and its Subsidiaries on a consolidated basis in any Fiscal Year will
not exceed the amount set forth below for each period set forth below.
Period Amount
------ ------
Fiscal Year 2007 $5,500,000
Fiscal Year 2008 and each $5,000,000
Fiscal Year ending thereafter
D. FIXED CHARGE COVERAGE. Holdings and its Subsidiaries on a
consolidated basis shall not permit their Fixed Charge Coverage for the rolling
twelve (12) month period ending on the last day of each fiscal quarter set forth
below to be less than the ratio set forth below for such periods, PROVIDED that,
notwithstanding the foregoing, for the purposes of determining Fixed Charges (x)
for the period ending January 31, 2007, sub-clauses (a) and (c) of the
definition of Fixed Charges (I.E., Cash Interest Expense and income and
franchise taxes) shall each be determined by taking the actual amounts under
such sub-clauses for the three month period ending on such date and multiplying
such amounts by 4, (y) for the period ending April 30, 2007, sub-clauses (a) and
(c) of the definition of Fixed Charges (I.E., Cash Interest Expense and income
and franchise taxes) shall each be determined by taking the actual amounts under
such sub-clauses for the six month period ending on such date and multiplying
such amounts by 2 and (z) for the period ending July 31, 2007, sub-clauses (a)
and (c) of the definition of Fixed Charges (I.E., Cash Interest Expense and
income and franchise taxes) shall each be determined by taking the actual
amounts under such sub-clauses for the nine month period ending on such date and
(i) dividing each such amount by 3 and then (ii) multiplying each such amount by
4.
Fiscal Quarter Ending Ratio
--------------------- -----
January 31, 2007 1.15 to 1.0
April 30, 2007 1.15 to 1.0
July 31, 2007 1.15 to 1.0
October 31, 2007 1.15 to 1.0
January 31, 2008 1.25 to 1.0
April 30, 2008 1.25 to 1.0
July 31, 2008 1.25 to 1.0
October 31, 2008 1.25 to 1.0
January 31, 2009 1.35 to 1.0
April 30, 2009 1.35 to 1.0
July 31, 2009 1.35 to 1.0
October 31, 2009 1.35 to 1.0
January 31, 2010 and the last day of each 1.50 to 1.0
fiscal quarter ending thereafter
