EXHIBIT 4.1
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF MARCH 30, 2006
AMONG
NASHUA CORPORATION,
VARIOUS FINANCIAL INSTITUTIONS
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS AGENT
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS.................................................. 1
1.1 Definitions.................................................. 1
1.2 Other Interpretive Provisions................................ 16
SECTION 2 COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND
LETTER OF CREDIT PROCEDURES.................................. 16
2.1 Commitments.................................................. 16
2.1.1 Revolving Loan Commitment............................ 16
2.1.2 L/C Commitment....................................... 17
2.2 Loan Procedures.............................................. 17
2.2.1 Various Types of Loans............................... 17
2.2.2 Borrowing Procedures................................. 17
2.2.3 Conversion and Continuation Procedures............... 18
2.3 Letter of Credit Procedures.................................. 19
2.3.1 L/C Applications..................................... 19
2.3.2 Participations in Letters of Credit.................. 19
2.3.3 Reimbursement Obligations............................ 19
2.3.4 Limitation on Obligations of Issuing Bank............ 20
2.3.5 Funding by Banks to Issuing Bank..................... 20
2.4 Commitments Several.......................................... 21
2.5 Certain Conditions........................................... 21
SECTION 3 NOTES EVIDENCING LOANS....................................... 21
3.1 Notes........................................................ 21
3.2 Recordkeeping................................................ 21
SECTION 4 INTEREST..................................................... 21
4.1 Interest Rates............................................... 21
4.2 Interest Payment Dates....................................... 22
4.3 Setting and Notice of LIBOR Rates............................ 22
4.4 Computation of Interest...................................... 22
SECTION 5 FEES......................................................... 22
5.1 Non-Use Fee.................................................. 22
5.2 Letter of Credit Fees........................................ 22
5.3 Annual Agent's Fees.......................................... 23
5.4 Loan Fee..................................................... 23
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT
AMOUNT; PREPAYMENTS.......................................... 23
6.1 Reduction or Termination of the Revolving Commitment Amount.. 23
6.1.1 Voluntary Reduction or Termination of the
Revolving Commitment
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Amount............................................... 23
6.1.2 All Reductions of the Revolving Commitment Amount.... 23
6.2 Prepayments.................................................. 23
6.2.1 Voluntary Prepayments................................ 23
6.2.2 Mandatory Prepayments................................ 24
6.3 All Prepayments.............................................. 24
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.............. 24
7.1 Making of Payments........................................... 24
7.2 Application of Certain Payments.............................. 24
7.3 Due Date Extension........................................... 24
7.4 Setoff....................................................... 24
7.5 Proration of Payments........................................ 25
7.6 Taxes........................................................ 25
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.......... 26
8.1 Increased Costs.............................................. 26
8.2 Basis for Determining Interest Rate Inadequate or Unfair..... 28
8.3 Changes in Law Rendering LIBOR Loans Unlawful................ 28
8.4 Funding Losses............................................... 29
8.5 Right of Banks to Fund through Other Offices................. 29
8.6 Discretion of Banks as to Manner of Funding.................. 29
8.7 Mitigation of Circumstances; Replacement of Banks............ 30
8.8 Conclusiveness of Statements; Survival of Provisions......... 30
SECTION 9 WARRANTIES................................................... 30
9.1 Organization................................................. 31
9.2 Authorization; No Conflict................................... 31
9.3 Validity and Binding Nature.................................. 31
9.4 Financial Condition.......................................... 31
9.5 No Material Adverse Change................................... 31
9.6 Litigation and Contingent Liabilities........................ 32
9.7 Ownership of Properties; Liens............................... 32
9.8 Subsidiaries................................................. 32
9.9 Pension Plans................................................ 32
9.10 Investment Company Act....................................... 33
9.11 Public Utility Holding Company Act........................... 33
9.12 Regulation U................................................. 33
9.13 Taxes........................................................ 33
9.14 Solvency, etc................................................ 33
9.15 Environmental Matters........................................ 33
9.16 Real Property................................................ 34
9.17 Information.................................................. 34
9.18 Intellectual Property........................................ 35
9.19 Labor Matters................................................ 35
9.20 No Default................................................... 35
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9.21 OFAC......................................................... 35
9.22 PATRIOT Act.................................................. 35
SECTION 10 COVENANTS.................................................... 36
10.1 Reports, Certificates and Other Information.................. 36
10.1.1 Annual Report........................................ 36
10.1.2 Interim Reports...................................... 36
10.1.3 Compliance Certificates.............................. 37
10.1.4 Reports to the SEC and to Shareholders............... 37
10.1.5 Notice of Default, Litigation and ERISA Matters...... 37
10.1.6 Borrowing Base Certificates.......................... 38
10.1.7 Management Reports................................... 38
10.1.8 Projections.......................................... 38
10.1.9 Subordinated Debt Notices............................ 38
10.1.10 Other Information.................................... 38
10.2 Books, Records and Inspections............................... 38
10.3 Maintenance of Property; Insurance........................... 39
10.4 Compliance with Laws; Payment of Taxes and Liabilities....... 39
10.5 Maintenance of Existence, etc................................ 39
10.6 Financial Covenants.......................................... 40
10.6.1 Fixed Charge Coverage Ratio.......................... 40
10.6.2 Funded Debt to Adjusted EBITDA Ratio................. 40
10.6.3 Capital Expenditures................................. 40
10.7 Limitations on Debt.......................................... 40
10.8 Liens........................................................ 41
10.9 Restricted Payments.......................................... 42
10.10 Mergers, Consolidations, Acquisitions Sales.................. 42
10.11 Modification of Organizational Documents..................... 43
10.12 Use of Proceeds.............................................. 43
10.13 Further Assurances........................................... 43
10.14 Transactions with Affiliates................................. 43
10.15 Employee Benefit Plans....................................... 43
10.16 Environmental Matters........................................ 43
10.17 Unconditional Purchase Obligations........................... 44
10.18 Inconsistent Agreements...................................... 44
10.19 Business Activities.......................................... 44
10.20 Investments.................................................. 44
10.21 Fiscal Year.................................................. 45
10.22 Cancellation of Debt......................................... 45
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.................... 45
11.1 Initial Credit Extension..................................... 45
11.1.1 Notes................................................ 46
11.1.2 Resolutions.......................................... 46
11.1.3 Consents, etc........................................ 46
11.1.4 Incumbency and Signature Certificates................ 46
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11.1.5 Security Agreement................................... 46
11.1.6 Opinion(s) of Counsel................................ 46
11.1.7 Insurance............................................ 46
11.1.8 Payment of Fees...................................... 46
11.1.9 Search Results; Lien Terminations.................... 46
11.1.10 Filings, Registrations and Recordings................ 47
11.1.11 Closing Certificate.................................. 47
11.1.12 Borrowing Base Certificate........................... 47
11.1.13 Other................................................ 47
11.2 Conditions................................................... 47
11.2.1 Compliance with Warranties, No Default, etc.......... 47
11.2.2 Confirmatory Certificate............................. 47
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT........................... 48
12.1 Events of Default............................................ 48
12.1.1 Non-Payment of the Loans, etc........................ 48
12.1.2 Non-Payment of Other Debt............................ 48
12.1.3 Bankruptcy, Insolvency, etc.......................... 48
12.1.4 Non-Compliance with Loan Documents................... 48
12.1.5 Warranties........................................... 49
12.1.6 Pension Plans........................................ 49
12.1.7 Judgments............................................ 49
12.1.8 Invalidity of Collateral Documents Loan
Documents, etc....................................... 49
12.1.9 Invalidity of Subordination Provisions, etc.......... 49
12.1.10 Change of Control.................................... 49
12.1.11 Material Adverse Effect.............................. 50
12.2 Effect of Event of Default................................... 50
SECTION 13 THE AGENT.................................................... 50
13.1 Appointment and Authorization................................ 50
13.2 Delegation of Duties......................................... 51
13.3 Liability of Agent........................................... 51
13.4 Reliance by Agent............................................ 51
13.5 Notice of Default............................................ 52
13.6 Credit Decision.............................................. 52
13.7 Indemnification.............................................. 52
13.8 Agent in Individual Capacity................................. 53
13.9 Successor Agent.............................................. 53
13.10 Collateral Matters........................................... 54
13.11 Amendment of Section 13...................................... 54
SECTION 14 GENERAL...................................................... 54
14.1 Waiver; Amendments........................................... 54
14.2 Confirmations................................................ 55
14.3 Notices...................................................... 55
14.4 Computations................................................. 55
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14.5 Regulation U................................................. 55
14.6 Costs, Expenses and Taxes.................................... 55
14.7 Subsidiary References........................................ 56
14.8 Captions..................................................... 56
14.9 Assignments; Participations.................................. 56
14.9.1 Assignments.......................................... 56
14.9.2 Participations....................................... 57
14.10 Governing Law................................................ 58
14.11 Counterparts................................................. 58
14.12 Successors and Assigns....................................... 58
14.13 Indemnification by the Company............................... 58
14.14 Nonliability of Lenders...................................... 59
14.15 Information.................................................. 59
14.16 Forum Selection and Consent to Jurisdiction.................. 59
14.17 Waiver of Jury Trial......................................... 60
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SCHEDULES
Pricing Schedule
SCHEDULE 2.1 Banks and Pro Rata Shares
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 9.16 Real Property
SCHEDULE 9.19 Labor Matters
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 10.20 Investments
SCHEDULE 11.1 Debt to be Repaid
SCHEDULE 14.3 Addresses for Notices
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EXHIBITS
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section 10.1.3)
EXHIBIT C Form of Security Agreement (Section 1.1)
EXHIBIT D Form of Borrowing Base Certificate (Section 1.1)
EXHIBIT E Form of Guaranty (Section 1.1)
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 30, 2006 (this
"Agreement") is entered into among NASHUA CORPORATION, a Massachusetts
corporation (the "Company"), the financial institutions that are or may from
time to time become parties hereto (together with their respective successors
and assigns, the "Banks") and LASALLE BANK NATIONAL ASSOCIATION (in its
individual capacity, "LaSalle"), as Agent for the Banks.
WHEREAS, certain of the Banks and the Company are party to that certain
Credit Agreement dated March 1, 2002, as amended by (i) that certain First
Amendment to Credit Agreement dated July 15, 2003, (ii) that certain Waiver and
Second Amendment to Credit Agreement dated July 24, 2003, (iii) that certain
Third Amendment to Credit Agreement dated September 25, 2003, (iv) that certain
Consent and Fourth Amendment to Credit Agreement dated December 30, 2003, (v)
that certain Fifth Amendment to Credit Agreement dated Xxxxx 00, 0000, (xx) that
certain Sixth Amendment to Credit Agreement dated December 1, 2004 and (vii)
that certain Seventh Amendment to Credit Agreement dated April 14, 2005 (the
"Existing Credit Agreement");
WHEREAS, the Company desires to refinance the debt owed to the Banks under
the Existing Credit Agreement (the "Existing Debt"), and the Banks are willing
to refinance the Existing Debt upon the terms and conditions set forth in this
Agreement; and
WHEREAS, in conjunction with refinancing the Existing Debt, the Company
desires to borrow additional funds and obtain other financial accommodations
from the Banks, and the Banks are willing to make certain loans and provide
other financial accommodations to the Company upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. When used herein the following terms shall have the
following meanings:
Account Debtor means any Person who is obligated to the Company under an
Account Receivable.
Account Receivable means, with respect to any Person, any right of such
person to payment for goods sold or leased or for services rendered, whether or
not evidenced by an instrument or chattel paper and whether or not yet earned by
performance.
Acquisition means any transaction or series of related transactions for the
purpose of or
resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of all or substantially all of
any business or division of a Person, (b) the acquisition of in excess of 50% of
the capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another Person (other than a
Person that is a Subsidiary).
Adjusted EBITDA means, for any period, EBITDA for the period of the four
fiscal quarters most recently ended, plus (i) restructuring, nonrecurring,
one-time charges mutually agreed upon, (ii) non-cash expenses mutually agreed
upon, and (iii) proforma adjustments mutually agreed upon for acquisitions.
Adjusted Working Capital means the remainder of:
(a) (i) the consolidated current assets of the Company and its Subsidiaries
less (ii) the amount of cash and cash equivalents included in such consolidated
current assets; minus
(b) (i) consolidated current liabilities of the Company and its
Subsidiaries less (ii) the amount of short-term Debt (including current
maturities of long-term Debt) of the Company and its Subsidiaries included in
such consolidated current liabilities.
Adjustment Date - see Pricing Schedule.
Affected Loan - see Section 8.3.
Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person. A Person shall be deemed
to be "controlled by" any other Person if such Person possesses, directly or
indirectly, power to vote 5% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
Agent means LaSalle in its capacity as agent for the Banks hereunder and
any successor thereto in such capacity.
Agreement - see the Preamble.
Assignment Agreement - see Section 14.9.1.
Attorney Costs means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person, the reasonable allocable cost of internal
and external legal services of such Person, all reasonable disbursements of such
counsel and all court costs and similar legal expenses.
Bank - see the Preamble. References to the "Banks" shall include the
Issuing Bank; for purposes of clarification only, to the extent that LaSalle (or
any successor Issuing Bank) may
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have any rights or obligations in addition to those of the other Banks due to
its status as Issuing Bank, its status as such will be specifically referenced.
Base Rate means at any time the greater of (a) the Federal Funds Rate plus
0.5% and (b) the Prime Rate.
Base Rate Loan means any Loan which bears interest at or by reference to
the Base Rate.
Base Rate Margin - see the Pricing Schedule.
Borrowing Base means an amount equal to the total of (a) 80% of the unpaid
amount (net of such reserves and allowances as the Required Banks deem necessary
in their reasonable discretion) of all Eligible Accounts Receivable plus (b) the
lesser of (i) 50% of the value of all Eligible Inventory valued at the lower of
cost or market (net of such reserves and allowances as the Required Banks deem
necessary in their reasonable discretion) or (ii) $14,000,000.
Borrowing Base Certificate means a certificate substantially in the form of
Exhibit D.
Business Day means any day on which LaSalle and the Banks are open for
commercial banking business in Chicago, Illinois and Manchester, New Hampshire
and, in the case of a Business Day which relates to a LIBOR Loan, on which
dealings are carried on in the London interbank market.
Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (i)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Collateralize means to deliver cash collateral to the Agent, (in the
amount of 110% of the face amount of such Letters of Credit) to be held as cash
collateral for outstanding Letters of Credit, pursuant to documentation
satisfactory to the Agent. Derivatives of such term have corresponding meanings.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-1 by
Standard & Poor's Ratings Group or P-1 by Moods Investors Service, Inc., (c) any
certificate of deposit (or time deposits represented by such certificates of
deposit) or banker's
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acceptance, maturing not more than one year after such time, or overnight
Federal Funds transactions that are issued or sold by any Bank or its holding
company or by a commercial banking institution that is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000 and (d) any repurchase agreement entered into with
any Bank (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c) and (ii) has
a market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such Bank (or other commercial banking
institution) thereunder.
CERCLA - see Section 9.15.
Closing Date - see Section 11.1.
Code means the Internal Revenue Code of 1986, as amended.
Collateral Access Agreement means an agreement in form and substance
reasonably satisfactory to the Required Banks pursuant to which a mortgagee or
lessor of real property on which collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory, acknowledges the Liens of
the Agent and waives any Liens held by such Person on such property, and, in the
case of any such agreement with a mortgagee or lessor, permits the Agent access
to and use of such real property for a reasonable amount of time following the
occurrence and during the continuance of an Event of Default to assemble,
complete and sell any collateral stored or otherwise located thereon.
Collateral Documents means the Security Agreement, the Reimbursement
Agreement, and any other agreement or instrument pursuant to which the Company,
any Subsidiary or any other Person grants collateral to the Agent for the
benefit of the Banks in connection herewith.
Commitments - see Section 2.1
Company - see the Preamble.
Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter thereafter.
Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, computed in accordance with GAAP.
Controlled Group means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
Person for
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borrowed money, whether or not evidenced by bonds, debentures, notes or similar
instruments, (b) all obligations of such Person as lessee under Capital Leases
which have been or should be recorded as liabilities on a balance sheet of such
Person in accordance with GAAP, (c) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (d) all indebtedness secured by a
Lien on the property of such Person, whether or not such indebtedness shall have
been assumed by such Person, (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account of such Person (including the
Letters of Credit), (f) all Hedging Obligations of such Person, (g) all
Suretyship Liabilities of such Person (but only to the extent that the
underlying obligation of such Person would have been Debt hereunder) and (h) all
Debt of any partnership of which such Person is a general partner.
Debt to be Repaid means Debt listed on Schedule 11.1.
Disposal - see the definition of "Release".
Dollar and the sign "$" mean lawful money of the United States of America.
EBITDA means, for any period, Consolidated Net Income for such period plus,
to the extent deducted in determining such Consolidated Net Income, Interest
Expense, income tax expense, depreciation, amortization and noncash losses for
such period minus, to the extent included in determining such Consolidated Net
Income, extraordinary gains for such period.
Eligible Account Receivable means an Account Receivable owing to the
Company which meets each of the following requirements:
(1) it arises from the sale of goods or the rendering of services by
the Company; and if it arises from the sale of goods, (i) such goods comply
with such Account Debtor's specifications (if any) and have been delivered
to such Account Debtor and (ii) the Company has possession of, or if
requested by the Agent has delivered to the Agent, delivery receipts
evidencing such delivery;
(2) it (a) is subject to a perfected Lien in favor of the Agent and
(b) is not subject to any other assignment, claim or Lien;
(3) it is a valid, legally enforceable and unconditional obligation of
the Account Debtor with respect thereto, and if it is subject to any
counterclaim, credit, allowance, discount, rebate or adjustment by the
Account Debtor with respect thereto, or to any claim by such Account Debtor
denying liability thereunder in whole or in part, it shall be considered an
Eligible Account Receivable in an amount not to exceed that portion of such
Account Receivable that is not subject to a counterclaim, credit,
allowance, discount, rebate or adjustment;
(4) there is no bankruptcy, insolvency or liquidation proceeding by or
against the Account Debtor with respect thereto unless the Required Banks
in their sole
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discretion agree to otherwise consider such Account Receivable as an
Eligible Account Receivable as a result of its having been granted priority
payment status in the relevant proceeding;
(5) the Account Debtor with respect thereto is a resident or citizen
of, and is located within, the United States or Canada (other than the
province of Quebec), unless the sale of goods or services giving rise to
such Account Receivable is on letter of credit, banker's acceptance or
other credit support terms reasonably satisfactory to the Required Banks;
(6) it is not an Account Receivable arising from a "sale on approval,"
"sale or return," "consignment" or "xxxx and hold" or subject to any other
repurchase or return agreement;
(7) it is not an Account Receivable with respect to which possession
and/or control of the goods sold giving rise thereto is held, maintained or
retained by the Company or any Guarantor (or by any agent or custodian of
the Company or any Guarantor) for the account of or subject to further
and/or future direction from the Account Debtor with respect thereto;
(8) it arises in the ordinary course of business of the Company;
(9) if the Account Debtor is the United States or any department,
agency or instrumentality thereof (other than the United States Postal
Service), the Company has assigned its right to payment of such Account
Receivable to the Agent pursuant to the Assignment of Claims Act of 1940;
(10) if the Company maintains a credit limit for an Account Debtor,
the aggregate dollar amount of Accounts Receivable due from such Account
Debtor, including such Account Receivable, does not exceed such credit
limit;
(11) if the Account Receivable is evidenced by chattel paper or an
instrument, the originals of such chattel paper or instrument shall have
been endorsed and/or assigned and delivered to the Agent in a manner
satisfactory to the Agent;
(12) such Account Receivable is not more than 90 days past the
original due date thereof, according to the original terms of sale;
(13) it is not an Account Receivable with respect to an Account Debtor
that is located in any jurisdiction which has adopted a statute or other
requirement with respect to which any Person that obtains business from
within such jurisdiction must file a notice of business activities report
or make any other required filings in a timely manner in order to enforce
its claims in such jurisdiction's courts unless such notice of business
activities report has been duly and timely filed or the Company is exempt
from filing such report and has provided the Agent with satisfactory
evidence of such exemption;
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(14) the Account Debtor with respect thereto is not the Company or an
Affiliate of the Company; and
(15) it is not owed by an Account Debtor with respect to which 25% or
more of the aggregate amount of outstanding Accounts Receivable owed at
such time by such Account Debtor is classified as ineligible under clause
(12) of this definition.
An Account Receivable which is at any time an Eligible Account Receivable, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Account Receivable. Further, with respect to
any Account Receivable, if the Agent or the Required Banks at any time hereafter
determine in their reasonable discretion that the prospect of payment or
performance by the Account Debtor with respect thereto is materially impaired,
such Account Receivable shall cease to be an Eligible Account Receivable after
notice of such determination setting forth the basis thereof is given to the
Company.
Eligible Inventory means Inventory of the Company which meets each of the
following requirements:
(1) it (a) is subject to a perfected Lien in favor of the Agent and
(b) is not subject to any other assignment, claim or Lien;
(2) it is salable;
(3) it is in the possession and control of the Company and it is
stored and held in facilities owned by the Company or, if such facilities
are not so owned, the Agent is in possession of a Collateral Access
Agreement with respect thereto within sixty (60) days of the Closing Date;
(4) it is not Inventory produced in violation of the Fair Labor
Standards Act and subject to the "hot goods" provisions contained in Title
29 U.S.C. Section 215;
(5) it is not subject to any agreement which would materially restrict
the Agent's ability to sell or otherwise dispose of such Inventory;
(6) it is located in the United States or in any territory or
possession of the United States that has adopted Article 9 of the UCC;
(7) it is not Inventory consisting of supplies, containers, or other
packing materials;
(8) it is Inventory which is considered finished goods or raw
materials, but not including work in progress;
(9) it is not "in transit" to the Company or any Guarantor or held by
the Company or any Guarantor on consignment; and
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(10) the Required Banks shall not have determined in their reasonable
discretion that it is unacceptable due to age, type, category, quality
and/or quantity and notice of such determination setting forth the basis
thereof is given to the Company.
Inventory which is at any time Eligible Inventory but which subsequently fails
to meet any of the foregoing requirements shall forthwith cease to be Eligible
Inventory.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to Environmental Matters.
Environmental Matters means any matter arising out of or relating to health
and safety, or pollution or protection of the environment or workplace,
including any of the foregoing relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution,
discharge, release, control or cleanup of any Hazardous Substance.
ERISA means the Employee Retirement Income Security Act of 1974.
Event of Default means any of the events described in Section 12.1.
Excess Availability means (a) the lesser of the Revolving Commitment Amount
or the Borrowing Base minus (b) the Revolving Outstandings.
Existing Credit Agreement - see Preamble.
Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as 1-1.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 A.M. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31st of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 2005") refer to the Fiscal Year ending on December 31 of
such calendar year.
8
Fixed Charge Coverage Ratio means for any Computation Period, the ratio of
(a) the total for such period of Adjusted EBITDA minus the sum of all income
taxes paid by the Company and its Subsidiaries and all Capital Expenditures to
(b) the sum for such period of (i) Interest Expense plus (ii) required payments
of principal of Funded Debt (including regularly scheduled payments in respect
of the term loans previously advanced to the Company by the Banks pursuant to
the Existing Credit Agreement (limited to the last four quarterly principal
payments) but excluding the Revolving Loans) plus (iii) all dividends paid by
the Company during such period.
Foreign Subsidiary means each Subsidiary which is (a) organized under the
laws of a jurisdiction other than the United States of America or any state
thereof, (b) conducts substantially all of its business outside of the United
States of America, and (c) has substantially all of its assets outside the
United States of America.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means, as to any Person, all Debt of such Person that matures
more than one year from the date of its creation (or is renewable or extendible,
at the option of such Person, to a date more than one year from such date).
Funded Debt to Adjusted EBITDA Ratio means, as of the last day of any
Fiscal Quarter, the ratio of (i) Funded Debt as of such day to (ii) Adjusted
EBITDA for the Computation Period ending on such day.
GAAP means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.1.
Governmental Authority means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
Guarantor means each Restricted Subsidiary of the Company, including
Restricted Subsidiaries formed or acquired after the date hereof.
Guaranty means a Guaranty substantially in the form of Exhibit E.
Hazardous Substances - see Section 9.15.
Hedging Agreement shall mean any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed
9
to protect the Company or any Subsidiary of the Company against fluctuations in
interest rates, currency exchange rates or commodity prices.
Hedging Obligation shall mean any liability of the Company or any
Subsidiary to the Bank or an affiliate of the Bank under any Hedging Agreement.
Interest Expense means for any period the consolidated interest expense of
the Company and its Subsidiaries for such period (including all imputed interest
on Capital Leases).
Interest Period means, as to any LIBOR Loan, the period commencing on the
date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one, two or three months thereafter as selected by the
Company pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) the Company may not select any Interest Period for a
Revolving Loan which would extend beyond the scheduled Termination
Date.
Inventory has the meaning assigned to such term in the UCC.
Investment means, relative to any Person, any investment in another Person,
whether by acquisition of any debt or equity security, by making any loan or
advance or by becoming obligated with respect to a Suretyship Liability in
respect of obligations of such other Person (other than travel and similar
advances to employees in the ordinary course of business).
Issuing Bank means LaSalle in its capacity as the issuer of Letters of
Credit hereunder and its successors and assigns in such capacity.
LaSalle - see the Preamble.
LaSalle Master Letter of Credit Agreement means a master letter of credit
agreement in the form of Exhibit G.
L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
Issuing Bank at the time of such
10
request for the type of letter of credit requested.
LC Fee Rate - see the Pricing Schedule.
Letter of Credit - see Section 2.1.2.
LIBOR Loan means any Loan which bears interest at a rate determined by
reference to the LIBOR Rate (Reserve Adjusted).
LIBOR Margin - see the Pricing Schedule.
LIBOR Office means with respect to any Bank, the office or offices of such
Bank which shall be making or maintaining the LIBOR Loans of such Bank
hereunder. A LIBOR Office of any Bank may be, at the option of such Bank, either
a domestic or foreign office.
LIBOR Rate means a rate of interest equal to (a) the per annum rate of
interest at which United States dollar deposits in an amount comparable to the
amount of the relevant LIBOR Loan and for a period equal to the relevant
Interest Period are offered in the London Interbank Eurodollar market at 11:00
A.M. (London time) two (2) Business Days prior to the commencement of such
Interest Period (or three (3) Business Days prior to the commencement of such
Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Agent in its sole discretion) or, if the Bloomberg
Financial Markets system or another authoritative source is not available, as
the LIBOR Rate is otherwise determined by the Agent in its sole and absolute
discretion, divided by (b) a number determined by subtracting from 1.00 the then
stated maximum reserve percentage for determining reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency funding or
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D), such rate to remain fixed for such Interest Period. The
Agent's determination of the LIBOR Rate shall be conclusive, absent manifest
error.
LIBOR Rate (Reserve Adjusted) means, with respect to any LIBOR Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16th of 1%) determined pursuant to the following formula:
LIBOR Rate LIBOR Rate
------------------ = --------------------
(Reserve Adjusted) 1-Reserve Percentage
Lien means, with respect to any Person, any interest granted by such Person
in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Documents means this Agreement, the Notes, the LaSalle Master Letter
of Credit Agreement, the L/C Applications, any Guaranty executed in connection
with this Agreement,
11
Hedging Agreements and the Collateral Documents.
Loan Fee - see Section 5.4.
Loan Party means the Company, each Guarantor and any other Person who may
from time to time become a party to any Loan Document.
Loans means Revolving Loans.
Margin Stock means any "margin stock" as defined in Regulation U.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, (b) a material impairment of the ability of the Company or any Subsidiary
to perform any of its obligations under any Loan Document or (c) a material
adverse effect upon any substantial portion of the collateral under the
Collateral Documents or upon the legality, validity, binding effect or
enforceability against the Company or any Subsidiary of any Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any member of the
Controlled Group may have any liability.
Non-Use Fee Rate - see the Pricing Schedule.
Note - see Section 3.1.
Operating Lease means any lease of (or other agreement conveying the right
to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Pricing Schedule - see Pricing Schedule attached hereto.
12
Pro Rata Share means, with respect to any Bank, the percentage specified
opposite such Bank's name on Schedule 2.1 hereto, as adjusted from time to time
in accordance with the terms hereof.
Prime Rate means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by LaSalle as its prime rate (whether or
not such rate is actually charged by LaSalle). Any change in the Prime Rate
announced by LaSalle shall take effect at the opening of business on the day
specified in the public announcement of such change. Prime Rate is not
necessarily the lowest or best rate charged to any customer.
RCRA - see Section 9.15.
Regulation D means Regulation D of the FRB.
Regulation U means Regulation U of the FRB.
Reimbursement Agreement means that certain Amended and Restated
Reimbursement Agreement dated as of the date hereof by and between Borrower and
LaSalle which amends and restates that certain Reimbursement Agreement dated as
of December 1, 2004, between Borrower and LaSalle, pursuant to which LaSalle has
issued and has agreed to extend an irrevocable direct pay letter of credit in
favor of LaSalle Bank National Association, as trustee for the bondholders under
the Indenture of Trust dated as of December 1, 2004 between The Industrial
Development Board of the City of Jefferson City, Tennessee and such trustee, in
the amount of $2,841,425.00, as heretofore or hereafter amended, restated,
modified or supplemented from time to time.
Release has the meaning specified in CERCLA and the term "Disposal" (or
"Disposed") has the meaning specified in RCRA; provided that in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, that to the extent that the laws of a state
wherein any affected property lies establish a meaning for "Release" or
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.
Required Banks means Banks having Pro Rata Shares aggregating 66-2/3% or
more.
Reserve Percentage means, with respect to any LIBOR Loan for any Interest
Period, a percentage (expressed as a decimal) equal to the daily average during
such Interest Period of the percentage in effect on each day of such Interest
Period, as prescribed by the FRB, for determining the aggregate maximum reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to Regulation D
or any other then applicable regulation of the FRB which prescribes reserve
requirements applicable to "Eurocurrency Liabilities" as presently defined in
Regulation D.
Restricted Subsidiary means any Subsidiary of the Company (other than a
Foreign
13
Subsidiary) which either accounts for 5% or more of the consolidated assets of
the Company and its Subsidiaries or accounts for 5% or more of Consolidated Net
Income.
Revolving Commitment Amount means $35,000,000, as reduced from time to time
pursuant to Section 6.1.
Revolving Loan - see Section 2.1.1.
Revolving Outstandings mean, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.
SEC means the Securities and Exchange Commission or any other governmental
authority succeeding to any of the principal functions thereof.
Security Agreement means a security agreement substantially in the form of
Exhibit C.
Senior Debt means all Debt of the Company and its Subsidiaries other than
Subordinated Debt.
Stated Amount means, with respect to any Letter of Credit or 2004 IRB
Letter of Credit at any date of determination, (a) the maximum aggregate amount
available for drawing thereunder under any and all circumstances plus (b) the
aggregate amount of all unreimbursed payments and disbursements under such
Letter of Credit or 2004 IRB Letter of Credit.
Subordinated Debt means any unsecured Debt of the Company which has
subordination terms, covenants, pricing and other terms which have been approved
in writing by the Required Banks.
Subsidiary means, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares or
other ownership interests as have more than 50% of the ordinary voting power for
the election of directors or other managers of such corporation, partnership,
limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company.
Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
14
Termination Date means the earlier to occur of (a) March 31, 2009, or (b)
such other date on which the Commitments terminate pursuant to Section 6 or 12.
Total Debt means all Debt of the Company and its Subsidiaries, determined
on a consolidated basis, excluding (i) contingent obligations in respect of
Suretyship Liabilities (except to the extent constituting Suretyship Liabilities
in respect of Debt of a Person other than the Company or any Subsidiary), (ii)
Hedging Obligations, and (iii) Debt of the Company to Subsidiaries and Debt of
Subsidiaries to the Company or to other Subsidiaries.
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and LIBOR Loans or borrowings.
UCC means the Uniform Commercial Code as in effect from time to time in the
State of Illinois.
Unmatured Event of Default means the occurrence of any event set forth in
Section 12.1 hereof which, if it continues, will, with lapse of time or notice
or both as provided therein, constitute an Event of Default.
Wholly-Owned Subsidiary means, as to any Person, another Person all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by such Person
and/or another Wholly-Owned Subsidiary of such Person.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including
without limitation."
(d) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(e) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments
and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation shall be
construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or
regulation.
15
(f) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and each shall be performed in accordance with its terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Company, the Banks and the other parties thereto and are the products
of all parties. Accordingly, they shall not be construed against the
Agent or the Banks merely because of the Agent's or Banks' involvement
in their preparation.
SECTION 2
COMMITMENTS OF THE BANKS; BORROWING,
CONVERSION AND LETTER OF CREDIT PROCEDURES
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in letters of credit for the account of,
the Company as follows (collectively, the "Commitments"):
2.1.1 Revolving Loan Commitment. Each Bank will make loans on a revolving
basis ("Revolving Loans") from time to time until the Termination Date in such
Bank's Pro Rata Share of such aggregate amounts as the Company may request
pursuant to Section 2.2 hereof; provided that the Revolving Outstandings will
not at any time exceed the lesser of (x) the Revolving Commitment Amount and (y)
the Borrowing Base.
2.1.2 L/C Commitment. (a) The Issuing Bank will issue letters of credit, in
each case containing such terms and conditions as are permitted by this
Agreement and are reasonably satisfactory to the Issuing Bank (each a "Letter of
Credit"; such Letter(s) of Credit shall exclude that certain direct pay letter
of credit dated as of December 1, 2004, the available face amount of which is
$2,841,425.00 as of the date hereof, relating to the indebtedness described in
Section 10.7(i) (as the same may be amended, modified, extended or restated from
time to time, the "2004 IRB Letter of Credit")), at the request of and for the
account of the Company from time to time before the date which is 30 days prior
to the Termination Date and (b) as more fully set forth in Section 2.3.2, each
Bank agrees to purchase a participation in each such Letter of Credit; provided
that (i) the aggregate Stated Amount of all Letters of Credit shall not at any
time exceed $5,000,000 and (ii) the Revolving Outstandings will not at any time
exceed the lesser of (x) the Revolving Commitment Amount and (y) the Borrowing
Base.
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Each Revolving Loan shall be divided into
tranches which are, either a Base Rate Loan or a LIBOR Loan (each a "type" of
Loan), as the Company shall specify in the related notice of borrowing or
conversion pursuant to Section 2.2.2 or 2.2.3.
16
LIBOR Loans having the same Interest Period are sometimes called a "Group" or
collectively "Groups". Base Rate Loans and LIBOR Loans may be outstanding at the
same time, provided that not more than five (5) different Groups of LIBOR Loans
shall be outstanding at any one time. All borrowings, conversions and repayments
of Revolving Loans shall be effected so that each Bank will have a pro rata
share (according to its Pro Rata Share) of all types and Groups of Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed immediately by written confirmation thereof) to the
Agent of each proposed borrowing not later than (a) in the case of a Base Rate
borrowing, 11:00 A.M., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a LIBOR borrowing, 10:00 A.M., Chicago time, at least three
Business Days prior to the proposed date of such borrowing. Each such notice
shall be effective upon receipt by the Agent, shall be irrevocable, and shall
specify the date, amount and type of borrowing and, in the case of a LIBOR
borrowing, the initial Interest Period therefor. Promptly upon receipt of such
notice and in any event, no later than 12:30 p.m. Chicago time, the Agent shall
advise each Bank thereof not later than 2:30 P.M., Chicago time, on the date of
a proposed borrowing, each Bank shall provide the Agent at the office specified
by the Agent with immediately available funds covering such Bank's Pro Rata
Share of such borrowing and, so long as the Agent has not received written
notice that the conditions precedent set forth in Section 11 with respect to
such borrowing have not been satisfied, the Agent shall pay over the funds
received by the Agent to the Company on the requested borrowing date. Each
borrowing shall be on a Business Day. Each Base Rate borrowing shall be in an
aggregate amount of at least $100,000 and an integral multiple of $10,000, and
each LIBOR borrowing shall be in an aggregate amount of at least $1,000,000 and
an integral multiple of at least $100,000.
2.2.3 Conversion and Continuation Procedures.
(a) Subject to Sections 2.2.1 and 2.2.2, the Company may, upon
irrevocable written notice to the Agent in accordance with clause (b)
below:
(i) elect, as of any Business Day, to convert any Loans (or any
part thereof) in an aggregate amount not less than $100,000 or a
higher integral multiple of $10,000 into Loans of the other type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any LIBOR Loans having Interest Periods expiring on such
day (or any part thereof) in an aggregate amount not less than
$1,000,000 or a higher integral multiple of $100,000 for a new
Interest Period;
provided that after giving effect to any prepayment, conversion or continuation,
the aggregate principal amount of each Group of LIBOR Loans shall be at least
$1,000,000 and an integral multiple of $100,000.
(b) The Company shall give written or telephonic (followed immediately
by written confirmation thereof) notice to the Agent of each proposed
conversion or
17
continuation not later than (i) in the case of conversion into Base Rate
Loans, 10:00 A.M., Chicago time, on the proposed date of such conversion
and (ii) in the case of conversion into or continuation of LIBOR Loans,
10:00 A.M., Chicago time, at least three Business Days prior to the
proposed date of such conversion or continuation, specifying in each case:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the type of Loans resulting from the proposed conversion or
continuation; and
(iv) in the case of conversion into, or continuation of, LIBOR
Loans, the duration of the requested Interest Period therefor.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such LIBOR Loans, the Company shall be deemed to have elected
to convert such LIBOR Loans into Base Rate Loans effective on the last day
of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
notice of conversion or continuation pursuant to this Section 2.2.3 or, if
no timely notice is provided by the Company, of the details of any
automatic conversion.
(e) Any conversion of a LIBOR Loan on a day other than the last day of
an Interest Period therefor shall be subject to Section 8.4.
2.3 Letter of Credit Procedures.
2.3.1 L/C Applications. The Company shall give notice to the Agent and the
Issuing Bank of the proposed issuance of each Letter of Credit on a Business Day
which is at least three Business Days (or such lesser number of days as the
Agent and the Issuing Bank shall agree in any particular instance in their sole
discretion) prior to the proposed date of issuance of such Letter of Credit.
Each such notice shall be accompanied by an L/C Application, duly executed by
the Company and in all respects satisfactory to the Agent and the Issuing Bank,
together with such other documentation as the Agent or the Issuing Bank may
reasonably request in support thereof, it being understood that each L/C
Application shall specify, among other things, the date on which the proposed
Letter of Credit is to be issued, the expiration date of such Letter of Credit
(which such expiration date shall not be later than (1) if such Letter of Credit
is not a Cash Collateralized Letter of Credit, the earlier to occur of (x) one
year after the date of issuance thereof and (y) thirty days prior to the
Termination Date or (2) if such Letter of Credit is a Cash Collateralized Letter
of Credit, one year after the Termination Date) and whether such Letter of
Credit is to be transferable in whole or in part. So long as the Issuing Bank
has not received written notice that the conditions precedent set forth in
Section 11 with respect to the issuance of such Letter of Credit have not been
satisfied, the Issuing Bank shall issue such Letter of Credit
18
on the requested issuance date. The Issuing Bank shall promptly advise the Agent
of the issuance of each Letter of Credit and of any amendment thereto, extension
thereof or event or circumstance changing the amount available for drawing
thereunder. In the event of any inconsistency between the terms of any L/C
Application and the terms of this Agreement, the terms of this Agreement shall
control; provided, that, as long as LaSalle is the Issuing Bank, the terms of
the LaSalle Master Letter of Credit Agreement shall govern and control in the
event of any inconsistency between the terms of this Agreement and the LaSalle
Master Letter of Credit Agreement.
2.3.2 Participations in Letters of Credit. Concurrently with the issuance
of each Letter of Credit, the Issuing Bank shall be deemed to have sold and
transferred to each other Bank, and each other Bank shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such other Bank's Pro Rata Share, in such Letter of Credit and the
Company's reimbursement obligations with respect thereto. For the purposes of
this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the Issuing Bank's "participation" therein. The Issuing Bank hereby
agrees, upon request of the Agent or any Bank, to deliver to the Agent or such
Bank a list of all outstanding Letters of Credit issued by the Issuing Bank,
together with such information related thereto as the Agent or such Bank may
reasonably request.
2.3.3 Reimbursement Obligations.
(a) Obligations Absolute. The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that the Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Base Rate Margin from time to time in
effect plus, beginning on the third Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The Issuing Bank shall
notify the Company and the Agent whenever any demand for payment is made under
any Letter of Credit by the beneficiary thereunder; provided that the failure of
the Issuing Bank to so notify the Company shall not affect the rights of the
Issuing Bank or the Banks in any manner whatsoever.
(b) Indemnification; Nature of Bank's Duties.
(i) In addition to amounts payable as elsewhere provided in this
Agreement, the Borrower hereby agrees to pay and to protect, indemnify and
save harmless the Banks from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees and allocated costs of internal counsel) that
the Banks may incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit or the incurrence obligations
pursuant to any Letter of Credit in respect thereof, or (B) the failure of
the Banks to honor a demand for payment under any Letter of Credit or of
the Banks to make any payment under any
19
obligations pursuant to any Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or
de facto government or Governmental Authority, in each case other than to
the extent solely as a result of the gross negligence or willful misconduct
of the Banks (as finally determined by a court of competent jurisdiction).
(ii) As between the Banks, on the one hand, and the Borrower, on the
other hand, the Borrower assumes all risks of the acts and omissions of, or
misuse of any Letter of Credit by, beneficiaries of any Letter of Credit.
In furtherance and not in limitation of the foregoing, to the fullest
extent permitted by law, the Banks shall not be responsible for (A) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged, (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason, (C) the failure
of the beneficiary of any Letter of Credit to comply fully with conditions
required to demand payment under such Letter of Credit;, (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages by mail, cable, telegraph, telex or otherwise, whether or not they
may be in cipher, (E) errors in interpretation of technical terms, (F) any
loss or delay in the transmission or otherwise of any document required to
make a payment under any Letter of Credit, (G) the credit of the proceeds
of any drawing under any Letter of Credit and (H) any consequences arising
from causes beyond the control of the Banks; provided that in each case
described in (A)-(H) hereof, a Bank shall be liable only to the extent of
any losses, claims or liabilities that arise solely as a result of its
gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction). None of the above shall affect, impair or prevent
the vesting of any of the Banks' rights or powers hereunder or under this
Agreement.
2.3.4 Limitation on Obligations of Issuing Bank. In determining whether to
pay under any Letter of Credit, the Issuing Bank shall not have any obligation
to the Company or any Bank other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and
appear to comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence and willful misconduct, shall not impose upon the Issuing Bank
any liability to the Company or any Bank and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.
2.3.5 Funding by Banks to Issuing Bank. If the Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by the Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of the Issuing Bank, in full or partial payment of the purchase
price of its participation in
20
such Letter of Credit, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the obligations of the Company under Section
2.3.3), and, upon notice from the Issuing Bank, the Agent shall promptly notify
each other Bank thereof. Each other Bank irrevocably and unconditionally agrees
to so pay to the Agent in immediately available funds for the Issuing Bank's
account the amount of such other Bank's Pro Rata Share of such payment or
disbursement. If and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 P.M., Chicago time, on the Business Day on which
such Bank receives notice from the Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the Issuing Bank's account forthwith on demand, for each day from the date such
amount was to have been delivered to the Agent to the date such amount is paid,
at a rate per annum equal to (a) for the first three days after demand, the
Federal Funds Rate from time to time in effect and (b) thereafter, the Base Rate
from time to time in effect. Any Bank's failure to make available to the Agent
its Pro Rata Share of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Pro Rata Share of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Agent such other Bank's Pro
Rata Share of any such payment or disbursement.
2.4 Commitments Several. The failure of any Bank to make a requested Loan
on any date shall not relieve any other Bank of its obligation (if any) to make
a Loan on such date, but no Bank shall be responsible for the failure of any
other Bank to make any Loan to be made by such other Bank.
2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any LIBOR Loan, and the Issuing Bank
shall not have any obligation to issue any Letter of Credit, if an Event of
Default or Unmatured Event of Default exists.
SECTION 3
NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory note
(each a "Note") substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Bank in a face principal
amount equal to the sum of such Bank's Pro Rata Share of the Revolving
Commitment Amount. Each Revolving Loan of such Bank shall be paid in full on the
Termination Date.
3.2 Recordkeeping. Each Bank shall record in its records, or at its option
on the schedule attached to its Note, the date and amount of each Loan made by
such Bank, each repayment or conversion thereof and, in the case of each LIBOR
Loan, the dates on which each Interest Period for such Loan shall begin and end.
The aggregate unpaid principal amount so recorded shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on
21
such Note. The failure to so record any such amount or any error in so recording
any such amount shall not, however, limit or otherwise affect the obligations of
the Company hereunder or under any Note to repay the principal amount of the
Loans evidenced by such Note together with all interest accruing thereon.
SECTION 4
INTEREST
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan is a Base Rate Loan, at a rate per
annum equal to the sum of the Base Rate from time to time in effect plus
the Base Rate Margin from time to time in effect; and
(b) at all times while such Loan is a LIBOR Loan, at a rate per annum
equal to the sum of the LIBOR Rate (Reserve Adjusted) applicable to each
Interest Period for such Loan plus the LIBOR Margin from time to time in
effect;
provided that at any time an Event of Default exists, if requested by the
Required Banks, the interest rate applicable to each Loan shall be increased by
2%.
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan shall
be payable in arrears on the last day of each calendar quarter and at maturity.
Accrued interest on each LIBOR Loan shall be payable on the last day of each
Interest Period relating to such Loan and at maturity. After maturity, accrued
interest on all Loans shall be payable on demand.
4.3 Setting and Notice of LIBOR Rates. The applicable LIBOR Rate for each
Interest Period shall be determined by the Agent, and notice thereof shall be
given by the Agent promptly to the Company and each Bank. Each determination of
the applicable LIBOR Rate by the Agent shall be conclusive and binding upon the
parties hereto, in the absence of demonstrable error; provided, however, that
upon notice by a Bank to the Agent and the Company (which notice must be given
to the Agent and the Company on or prior to the commencement of the applicable
Interest Period) that the LIBOR Rate as so determined by the Agent is not the
LIBOR Rate as determined by such Bank, then the LIBOR Rate as so determined by
such Bank shall be the LIBOR Rate applicable to such Bank's LIBOR Loan and shall
be conclusive and binding on the parties hereto, in the absence of demonstrable
error. The Agent shall, upon written request of the Company or any Bank, deliver
to the Company or such Bank a statement showing the computations used by the
Agent in determining any applicable LIBOR Rate hereunder.
4.4 Computation of Interest. Interest shall be computed for the actual
number of days elapsed on the basis of a year of 360 days. The applicable
interest rate for each Base Rate Loan shall change simultaneously with each
change in the Base Rate without notice or demand of any kind.
22
SECTION 5
FEES
5.1 Non-Use Fee. The Company agrees to pay to the Agent for the account of
each Bank a non-use fee, for the period from the Closing Date to the Termination
Date, at the Non-Use Fee Rate in effect from time to time of such Bank's Pro
Rata Share (as adjusted from time to time) of the unused amount of the Revolving
Commitment Amount. For purposes of calculating usage under this Section, the
Revolving Commitment Amount shall be deemed used to the extent of the aggregate
principal amount of all outstanding Revolving Loans plus the Stated Amount of
all Letters of Credit. Such non-use fee shall be payable in arrears on the last
day of each calendar quarter and on the Termination Date for any period then
ending for which such non-use fee shall not have previously been paid. The
non-use fee shall be computed for the actual number of days elapsed on the basis
of a year of 360 days.
5.2 Letter of Credit Fees.
(a) The Company agrees to pay to the Agent for the account of each
Bank a nonrefundable annual letter of credit fee for each Letter of Credit
equal to the LC Fee Rate in effect on each date such fee is payable
hereunder of such Bank's Pro Rata Share (as adjusted from time to time) of
the maximum amount of such Letter of Credit. Such letter of credit fee
shall be payable in advance on the date of the issuance of each Letter of
Credit and on each anniversary date thereafter as long as such Letter of
Credit is outstanding.
(b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the Issuing Bank, for its own account, (i) such fees and
expenses as the Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of
credit in similar situations and (ii) a nonrefundable letter of credit
fronting fee for each Letter of Credit in an amount equal to 25 basis
points of the maximum amount of each commercial Letter of Credit and 125
basis points of the maximum amount of each standby Letter of Credit, such
fee to be payable upon issuance of the Letter of Credit and on each
anniversary date thereafter as long as such Letter of Credit is
outstanding.
5.3 Annual Agent's Fees. The Company agrees to pay to the Agent such annual
Agent's fees as are mutually agreed to from time to time by the Company and the
Agent.
5.4 Loan Fees. The Company agrees to pay to the Agent for the account of
each financial institutions party to the Existing Credit Agreement on the date
of execution of this Agreement, the following loan fees: (a) a $15,000 amendment
fee in connection with the amendments made to the Revolving Loan Commitments
described in Section 2.1.1 of this Agreement and all other amendments contained
herein that are in connection therewith and (b) a $2,500 amendment fee in
connection with the amendments made to the L/C Commitment described in Section
2.1.2 of this Agreement and all other amendments contained herein in
23
connection therewith (collectively, the "Loan Fees").
SECTION 6
REDUCTION OR TERMINATION OF THE
REVOLVING COMMITMENT AMOUNT; PREPAYMENTS.
6.1 Reduction or Termination of the Revolving Commitment Amount.
6.1.1 Voluntary Reduction or Termination of the Revolving Commitment
Amount. The Company may from time to time on at least five Business Days' prior
written notice received by the Agent (which shall promptly advise each Bank
thereof) permanently reduce the Revolving Commitment Amount to an amount not
less than the Revolving Outstandings. Any such reduction shall be in an amount
not less than $5,000,000 or a higher integral multiple of $1,000,000.
Concurrently with any reduction of the Revolving Commitment Amount to zero, the
Company shall pay all interest on the Revolving Loans, all non-use fees and all
letter of credit fees and shall Cash Collateralize in full all obligations
arising with respect to the Letters of Credit.
6.1.2 All Reductions of the Revolving Commitment Amount. All reductions of
the Revolving Commitment Amount shall reduce the Commitments pro rata among the
Banks according to their respective Pro Rata Shares.
6.2 Prepayments.
6.2.1 Voluntary Prepayments. The Company may from time to time prepay the
Loans in whole or in part without charge or penalty except as provided in
Section 8.4 hereof or in any Hedging Agreement; provided that the Company shall
give the Agent (which shall promptly advise each Bank) notice thereof not later
than 10:00 A.M., Chicago time, on the day of such prepayment (which shall be a
Business Day), specifying the Loans to be prepaid and the date and amount of
prepayment. Any such partial prepayment shall be in an amount equal to $100,000
or a higher integral multiple of $10,000.
6.2.2 Mandatory Prepayments. If on any day the Revolving Outstandings
exceed the Borrowing Base, the Company shall immediately prepay Revolving Loans
and/or Cash Collateralize the outstanding Letters of Credit, or do a combination
of the foregoing, in an amount sufficient to eliminate such excess.
6.3 All Prepayments. Each voluntary partial prepayment shall be in a
principal amount of $100,000 or a higher integral multiple of $10,000. Any
partial prepayment of a Group of LIBOR Loans shall be subject to the proviso to
Section 2.2.3(a). Any prepayment of a LIBOR Loan on a day other than the last
day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 8.4.
SECTION 7
24
MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
Notes, and of all fees, shall be made by the Company to the Agent in immediately
available funds at the office specified by the Agent not later than 10:00 A.M.
Chicago time, on the date due; and funds received after that hour shall be
deemed to have been received by the Agent on the following Business Day. The
Agent shall promptly remit to each Bank its share of all such payments received
in collected funds by the Agent for the account of such Bank. All payments under
Section 8.1 shall be made by the Company directly to the Bank entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the Agent shall advise
such Bank as to the application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a LIBOR Loan, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
due date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.
7.4 Setoff. The Company agrees that the Agent and each Bank have all rights
of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company hereby grants to the Agent and the Banks, a continuing
lien, security interest and right of setoff as security for all liabilities and
obligations to the Agent and the Banks, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of the Agent, any
Bank or any entity under the control of any Affiliate or parent thereof and its
successors and assigns or in transit to any of them. At any time after an Event
of Default or upon notice of issue of any legal process by which process any of
the Company's assets in the possession or control of the Agent or any Bank may
be trusteed, attached or levied upon, without demand or notice (any such notice
being expressly waived by the Company), the Agent and/or such Bank may setoff
the same or any part thereof and apply the same to any liability or obligation
of the Company and any Guarantor even though unmatured and regardless of the
adequacy of any other collateral securing the Loans. ANY AND ALL RIGHTS TO
REQUIRE THE AGENT OR ANY BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE COMPANY
OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
7.5 Proration of Payments. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 8.7 or 14.9 and payments of
interest on any Affected Loan) on
25
account of principal of or interest on any Loan (or on account of its
participation in any Letter of Credit) in excess of its Pro Rata Share of
payments and other recoveries obtained by all Banks on account of principal of
and interest on the Loans (or such participation) then held by them, such Bank
shall purchase from the other Banks such participations in the Loans (or
sub-participations in Letters of Credit) held by them as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery.
7.6 Taxes. All payments of principal of, and interest on, the Loans and all
other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding franchise taxes and taxes
imposed on or measured by any Bank's net income or receipts (all non-excluded
items being called "Taxes"). If any withholding or deduction from any payment to
be made by the Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure.
Each Bank that is (a) not a United States person (as such term is defined
in Section 7701(a)(3) of the Code) and (b)(i) is a party hereto on the Closing
Date or (ii) becomes an assignee of an interest under this Agreement under
Section 14.9.1, after the Closing Date (unless such Bank was already a Bank
hereunder immediately prior to such assignment) shall execute
26
and deliver to the Company and the Agent one or more (as the Company or the
Agent may reasonably request) two duly completed and signed copies of (i) either
Form W-8 BEN (relating to such Bank and entitling it to a complete exemption
from withholding under the Code on all amounts to be received by such Bank,
including fees, pursuant to the Loan Documents and obligations related thereto)
or Form W-8 ECI (relating to all amounts to be received by such Bank, including
fees, pursuant to the Loan Documents and the obligations related thereto) of the
United States Internal Revenue Service or (ii) solely if such Bank is claiming
exemption from United States withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", a Form W-8 BEN, or
any successor form prescribed by the United States Internal Revenue Service, and
a certificate representing that such Bank is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code) or such other forms or documents, appropriately
completed, as may be applicable to establish that such Bank is exempt from
withholding or deduction of Taxes. The Company shall not be required to pay
additional amounts to any Bank pursuant to this Section 7.6 to the extent that
the obligation to pay such additional amounts would not have arisen but for the
failure of such Bank to comply with this paragraph.
SECTION 8
INCREASED COSTS; SPECIAL PROVISIONS
FOR LIBOR LOANS
8.1 Increased Costs.
(a) If, after the date hereof, the adoption of, or any change any
applicable law, rule or regulation, or any change in the interpretation or
administration of any applicable law, rule or regulation by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
LIBOR Office of such Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) shall subject any Bank (or any LIBOR Office of such Bank) to
any tax, duty or other charge with respect to its LIBOR Loans, its Note or
its obligation to make LIBOR Loans, or shall change the basis of taxation
of payments to any Bank of the principal of or interest on its LIBOR Loans
or any other amounts due under this Agreement in respect of its LIBOR Loans
or its obligation to make LIBOR Loans (except for changes in the rate of
tax on the overall net income of such Bank or its LIBOR Office imposed by
the jurisdiction in which such Bank's principal executive office or LIBOR
Office is located);
(ii) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve
included in the determination of interest rates pursuant to Section 4),
special deposit or similar requirement against
27
assets of, deposits with or for the account of, or credit extended by any
Bank (or any LIBOR Office of such Bank); or
(iii) shall impose on any Bank (or its LIBOR Office) any other
condition affecting its LIBOR Loans, its Note or its obligation to make
LIBOR Loans;
and the result of any of the foregoing is to increase the cost to (or to
impose a cost on) such Bank (or any LIBOR Office of such Bank) of making or
maintaining any LIBOR Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its LIBOR Office) under this Agreement or under
its Note with respect thereto, then upon demand by such Bank (which demand
shall be accompanied by a statement setting forth the basis for such demand
and a calculation of the amount thereof in reasonable detail, a copy of
which shall be furnished to the Agent), the Company shall pay directly to
such Bank such additional amount as will compensate such Bank for such
increased cost or such reduction.
(b) If any Bank shall reasonably determine that any change in, the
adoption or phase-in of, any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank or any Person controlling such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's or such controlling
Person's capital as a consequence of such Bank's obligations hereunder or
under any Letter of Credit to a level below that which such Bank or such
controlling Person could have achieved but for such change, adoption,
phase-in or compliance (taking into consideration such Bank's or such
controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then
from time to time, upon demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which
shall be furnished to the Agent), the Company shall pay to such Bank such
additional amount as will compensate such Bank or such controlling Person
for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank LIBOR market for such Interest
Period, or the Agent otherwise reasonably determines (which determination
shall be binding and conclusive on the Company) that by reason of
circumstances affecting the interbank LIBOR market adequate and reasonable
means do not exist for ascertaining the applicable LIBOR Rate; or
(b) Banks having aggregate Pro Rata Shares of 25% or more advise the
Agent
28
that the LIBOR Rate (Reserve Adjusted) as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of maintaining or
funding LIBOR Loans for such Interest Period (taking into account any
amount to which such Banks may be entitled under Section 8.1) or that the
making or funding of LIBOR Loans has become impracticable as a result of an
event occurring after the date of this Agreement which in the opinion of
such Banks materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into LIBOR Loans and (ii) on the last day of the current
Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the
adoption of any new, law or regulation, or any change in the interpretation of
any applicable law or regulation by any governmental or other regulatory body
charged with the administration thereof, should make it (or in the good faith
judgment of any Bank cause a substantial question as to whether it is) unlawful
for any Bank to make, maintain or fund LIBOR Loans, then such Bank shall
promptly notify each of the other parties hereto and, so long as such
circumstances shall continue, (a) such Bank shall have no obligation to make or
convert into LIBOR Loans (but shall make Base Rate Loans concurrently with the
making of or conversion into LIBOR Loans by the Banks which are not so affected,
in each case in an amount equal to the amount of LIBOR Loans which would be made
or converted into by such Bank at such time in the absence of such
circumstances) and (b) on the last day of the current Interest Period for each
LIBOR Loan of such Bank (or, in any event, on such earlier date as may be
required by the relevant law, regulation or interpretation), such LIBOR Loan
shall, unless then repaid in full, automatically convert to a Base Rate Loan.
Each Base Rate Loan made by a Bank which, but for the circumstances described in
the foregoing sentence, would be a LIBOR Loan (an "Affected Loan") shall remain
outstanding for the same period as the Group of LIBOR Loans of which such
Affected Loan would be a part absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any Bank
(which demand shall be accompanied by a statement setting forth the basis for
the amount being claimed, a copy of which shall be furnished to the Agent), the
Company will indemnify such Bank against any net loss or expense which such Bank
may sustain or incur (including any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain any LIBOR Loan), as reasonably determined by such Bank, as a
result of (a) any payment, prepayment or conversion of any LIBOR Loan of such
Bank on a date other than the last day of an Interest Period for such Loan
(including any conversion pursuant to Section 8.3 or payment or prepayment
resulting from acceleration following the occurrence of an Event of Default) or
(b) any failure of the Company to borrow, convert or continue any Loan on a date
specified therefor in a notice of borrowing, conversion or continuation pursuant
to this Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable. Without limiting the foregoing, the
Company shall pay to the Banks a "yield maintenance fee" in an amount computed
as follows: The current rate for United States Treasury securities (bills on a
discounted basis shall be converted to a bond equivalent) with a maturity date
closest to the term chosen pursuant to the LIBOR Rate Election
29
as to which the prepayment is made, shall be subtracted from the LIBOR Rate
(Reserve Adjusted) in effect at the time or prepayment. If the result is zero or
a negative number, there shall be no yield maintenance fee. If this result is a
positive number, then the resulting percentage shall be multiplied by an amount
of the principal balance being prepaid. The resulting amount shall be divided by
360 and multiplied by the number of days remaining in the term chosen pursuant
to the LIBOR Rate Election as to which the prepayment is made. Said amount shall
be reduced to present value calculated by using the above referenced United
States Treasury securities rate and the number of days remaining in the term
chosen pursuant to the LIBOR Rate Election as to which prepayment is made. The
resulting amount shall be the yield maintenance fee due to such Bank upon the
prepayment of a LIBOR Loan. Each reference in this paragraph to "LIBOR Rate
Election" shall mean the election by the Company of the LIBOR Rate.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it so
elects, fulfill its commitment as to any LIBOR Loan by causing a foreign branch
or Affiliate of such Bank to make such Loan; provided that in such event for the
purposes of this Agreement such Loan shall be deemed to have been made by such
Bank and the obligation of the Company to repay such Loan shall nevertheless be
to such Bank and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or Affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each LIBOR Loan during each Interest Period for such Loan through the
purchase of deposits having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the LIBOR Rate for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Banks.
(a) Each Bank shall promptly notify the Company and the Agent of any
event of which it has knowledge which will result in, and will use
reasonable commercial efforts available to it (and not, in such Bank's sole
judgment, otherwise disadvantageous to such Bank) to mitigate or avoid, (i)
any obligation by the Company to pay any amount pursuant to Section 7.6 or
8.1 or (ii) the occurrence of any circumstances described in Section 8.2 or
8.3 (and, if any Bank has given notice of any such event described in
clause (i) or (ii) above and thereafter such event ceases to exist, such
Bank shall promptly so notify the Company and the Agent). Without limiting
the foregoing, each Bank will designate a different funding office if such
designation will avoid (or reduce the cost to the Company of) any event
described in clause (i) or (ii) of the preceding sentence and such
designation will not, in such Bank's sole judgment, be otherwise
disadvantageous to such Bank.
(b) If the Company becomes obligated to pay additional amounts to any
Bank pursuant to Section 7.6 or 8.1, or any Bank gives notice of the
occurrence of any circumstances described in Section 8.2 or 8.3, the
Company may designate another bank
30
which is acceptable to the Agent and the Issuing Bank in their reasonable
discretion (such other bank being called a "Replacement Bank") to purchase
the Loans of such Bank and such Bank's rights hereunder, without recourse
to or warranty by, or expense to, such Bank, for a purchase price equal to
the outstanding principal amount of the Loans payable to such Bank plus any
accrued but unpaid interest on such Loans and all accrued but unpaid fees
owed to such Bank and any other amounts payable to such Bank under this
Agreement, and to assume all the obligations of such Bank hereunder, and,
upon such purchase and assumption (pursuant to an Assignment Agreement),
such Bank shall no longer be a party hereto or have any rights hereunder
(other than rights with respect to indemnities and similar rights
applicable to such Bank prior to the date of such purchase and assumption)
and shall be relieved from all obligations to the Company hereunder, and
the Replacement Bank shall succeed to the rights and obligations of such
Bank hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, expiration or termination of the Letters of Credit
and termination of this Agreement.
SECTION 9
WARRANTIES
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue and participate in Letters of Credit
hereunder, the Company warrants to the Agent and the Banks that:
9.1 Organization. The Company is a corporation validly existing and in good
standing under the laws of the State of Massachusetts; each Subsidiary is
validly existing and in good standing under the laws of the jurisdiction of its
organization; and each of the Company and each Subsidiary is duly qualified to
do business in each jurisdiction where, because of the nature of its activities
or properties, such qualification is required, except for such jurisdictions
where the failure to so qualify would not have a Material Adverse Effect. The
Company's name as it appears in this Agreement is its exact name as it appears
on the Company's organizational documents as amended.
9.2 Authorization; No Conflict. Each of the Company and each other Loan
Party is duly authorized to execute and deliver each Loan Document to which it
is a party, the Company is duly authorized to borrow monies hereunder and each
of the Company and each other Loan Party is duly authorized to perform its
obligations under each Loan Document to which it is a party. The execution,
delivery and performance by the Company of this Agreement and by each of the
Company and each other Loan Party of each Loan Document to which it is a party,
and the borrowings by the Company hereunder, do not and will not (a) require any
consent or approval of any governmental agency or authority (other than any
consent or approval which has been
31
obtained and is in full force and effect), (b) conflict with (i) any provision
of law, (ii) the charter, by-laws or other organizational documents of the
Company or any other Loan Party or (iii) any agreement, indenture, instrument or
other document, or any judgment, order or decree, which is binding upon the
Company or any other Loan Party or any of their respective properties or (c)
require, or result in, the creation or imposition of any Lien on any asset of
the Company, any Subsidiary or any other Loan Party (other than Liens in favor
of the Agent created pursuant to the Collateral Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other Loan
Document to which the Company or any other Loan Party is a party is the legal,
valid and binding obligation of such Person, enforceable against such Person in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors' rights generally and to general
principles of equity.
9.4 Financial Condition. The unaudited consolidated financial statements of
the Company and its Subsidiaries as at December 31, 2005, copies of which have
been delivered to each Bank, were prepared in accordance with GAAP (subject, in
the case of such unaudited statements, to the absence of footnotes and to normal
year-end adjustments) and present fairly the consolidated financial condition of
the Company and its Subsidiaries as at such date and the results of their
operations for the period then ended.
9.5 No Material Adverse Change. Since December 31, 2005, there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Subsidiary which could reasonably be expected to have a Material
Adverse Effect, except as set forth in Schedule 9.6. Other than any liability
incident to such litigation or proceedings, neither the Company nor any
Subsidiary has any material contingent liabilities not listed on Schedule 9.6 or
permitted by Section 10.7.
9.7 Ownership of Properties; Liens. Each of the Company and each Subsidiary
owns good and, in the case of real property, marketable title to all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 10.8.
9.8 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
other than those listed on Schedule 9.8.
9.9 Pension Plans.
(a) During the twelve-consecutive-month period prior to the date of
the
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execution and delivery of this Agreement or the making of any Loan or the
issuance of any Letter of Credit, (i) no steps have been taken to terminate
any Pension Plan and (ii) no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to a Lien under Section 302(f)
of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could reasonably be expected to result in
the incurrence by the Company of any material liability, fine or penalty
other than the obligation to make contributions to its Pension Plan in the
ordinary course of business.
(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the Company or any other
member of the Controlled Group under the terms of the plan or of any
collective bargaining agreement or by applicable law; neither the Company
nor any member of the Controlled Group has withdrawn or partially withdrawn
from any Multiemployer Pension Plan, incurred any withdrawal liability with
respect to any such plan which has not been satisfied or received notice of
any claim or demand for withdrawal liability or partial withdrawal
liability from any such plan, and no condition has occurred which, if
continued, could reasonably be expected to result in a withdrawal or
partial withdrawal from any such plan; and neither the Company nor any
member of the Controlled Group has received any notice that any
Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been funded at a
rate less than that required under Section 412 of the Code, that any such
plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 Investment Company Act. As of the date hereof, neither the Company nor
any Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all material
tax returns and reports required by law to have been filed by it and has paid
all taxes and governmental charges thereby shown to be owing, except any such
taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
9.14 Solvency, etc. On the Closing Date, and immediately prior to and after
giving effect to the issuance of each Letter of Credit and each borrowing
hereunder and the use of the
33
proceeds thereof, (a) each of the Company's and each other Loan Party's assets
will exceed its liabilities and (b) each of the Company and each other Loan
Party will be solvent, will be able to pay its debts as they mature, will own
property with fair saleable value greater than the amount required to pay its
debts and will have capital sufficient to carry on its business as then
constituted.
9.15 Environmental Matters.
(a) No Violations. Except as set forth on Schedule 9.15, neither the
Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's existing properties, is in violation, or alleged violation, of
any judgment, decree, order, law, permit, license, rule or regulation
pertaining to environmental matters, including those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986 or any other
Environmental Law which (i) in any single case, requires expenditures in
any three-year period of $100,000 or more by the Company and its
Subsidiaries in penalties and/or for investigative, removal or remedial
actions or (ii) individually or in the aggregate otherwise could reasonably
be expected to have a Material Adverse Effect.
(b) Notices. Except as set forth on Schedule 9.15 and for matters
arising after the Closing Date, in each case none of which could singly or
in the aggregate be expected to have a Material Adverse Effect, neither the
Company nor any Subsidiary has received notice from any third party,
including any Federal, state or local governmental authority: (a) that any
one of them has been identified by the U.S. Environmental Protection Agency
as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (b)
that any hazardous waste, as defined by 42 U.S.C. Section 6903(5), any
hazardous substance as defined by 42 U.S.C. Section 960I(14), any pollutant
or contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic
substance, oil or hazardous material or other chemical or substance
regulated by any Environmental Law (all of the foregoing, "Hazardous
Substances") which any one of them has generated, transported or disposed
of has been found at any site at which a Federal, state or local agency or
other third party has conducted a remedial investigation, removal or other
response action pursuant to any Environmental Law; (c) that the Company or
any Subsidiary must conduct a remedial investigation, removal, response
action or other activity pursuant to any Environmental Law; or (d) of any
Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth on Schedule
9.15, (i) no portion of the real property or other assets of the Company or
any Subsidiary has been used for the handling, processing, storage or
disposal of Hazardous Substances except in accordance in all material
respects with applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Substances is located on
such properties; (ii) in the course of any activities conducted by the
Company, any Subsidiary or the operators of any real property of the
Company or any Subsidiary, no Hazardous Substances have been generated or
are being used on such properties
34
except in accordance in all material respects with applicable Environmental
Laws; (iii) there have been no Releases or threatened Releases of Hazardous
Substances on, upon, into or from any real property or other assets of the
Company or any Subsidiary, which Releases singly or in the aggregate could
reasonably be expected to have a material adverse effect on the value of
such real property or assets; (iv) there have been no Releases on, upon,
from or into any real property in the vicinity of the real property or
other assets of the Company or any Subsidiary which, through soil or
groundwater contamination, may have come to be located on, and which could
reasonably be expected to have a Material Adverse Effect; and (v) any
Hazardous Substances generated by the Company and its Subsidiaries have
been transported offsite only by properly licensed carriers and delivered
only to treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which, to the Company's
knowledge, transporters and facilities have been and are operating in
compliance in all material respects with such permits and applicable
Environmental Laws.
9.16 Real Property. Set forth on Schedule 9.16 is a complete and accurate
list, as of the Closing Date, of the address of all real property owned or
leased by the Company or any Subsidiary, together with, in the case of leased
property, the name and mailing address of the lessor of such property.
9.17 Information. All information heretofore or contemporaneously herewith
furnished in writing by the Company or any other Loan Party to the Agent or any
Bank for purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to the Agent or any Bank pursuant hereto
or in connection herewith will be, true and accurate in every material respect
on the date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results).
9.18 Intellectual Property. The Company and each Subsidiary owns and
possesses or has a license or other right to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service xxxx rights and copyrights as are necessary for the conduct of the
business of the Company and its Subsidiaries, without, to the best of their
knowledge, any infringement upon rights of others which could reasonably be
expected to have a Material Adverse Effect.
9.19 Labor Matters. Except as set forth on Schedule 9.19, neither the
Company nor any Subsidiary is subject to any labor or collective bargaining
agreement. Except as set forth on Schedule 9.19, there are no existing or, to
the Company's knowledge, threatened strikes, lockouts or other labor disputes
involving the Company or any Subsidiary that singly or in the aggregate could
reasonably be expected to have a Material Adverse Effect. Hours worked by
35
and payment made to employees of the Company and its Subsidiaries are not in
violation in any material respect of the Fair Labor Standards Act or any other
applicable law, rule or regulation dealing with such matters.
9.20 No Default. No Event of Default or Unmatured Event of Default exists
or would result from the incurring by the Company of any Debt hereunder or under
any other Loan Document.
9.21. OFAC. Neither the Company nor any Subsidiary (i) is a Person whose
property or interests in property are blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)), (ii) is engaged in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any Person in any manner violative of Section 2, or (iii) is a
person on the list of Specially Designated Nationals and Blocked Persons or
subject to the limitations or prohibitions under any other Office of Foreign
Assets Control ("OFAC") regulation or executive order.
9.22. PATRIOT Act. The Company and each Subsidiary is in compliance with
the (a) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) the Uniting And Strengthening America
By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism Act,
Title III of Pub. L. 107-56, signed into law October 26, 2001 (the "USA PATRIOT
Act"). No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended. The Company (on behalf of
itself and for each Subsidiary) hereby acknowledges receipt of notification
that, pursuant to the requirements of the USA PATRIOT Act, the Banks are
required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of the Company and its
Subsidiaries and other information that will allow the Banks to identify the
such parties in accordance with the USA PATRIOT Act.
SECTION 10
COVENANTS
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent and
each Bank:
36
10.1.1 Annual Report. Promptly when available and in any event within 120
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets and statements of earnings and cash flows of the
Company and its Subsidiaries as at the end of such Fiscal Year, certified
without qualification by Ernst & Young LLP or other independent auditors of
recognized standing selected by the Company and reasonably acceptable to the
Required Banks, together with a written statement from such accountants to the
effect that in making the examination necessary for the signing of such annual
audit report by such accountants, nothing came to their attention that caused
them to believe that the Company was not in compliance with any provision of
Section 10.6, 10.7, 10.9 or 10.10 of this Agreement insofar as such provision
relates to accounting matters or, if something has come to their attention that
caused them to believe that the Company was not in compliance with any such
provision, describing such non-compliance in reasonable detail.
10.1.2 Interim Reports. Promptly when available and in any event within 30
days after the end of each month (45 days in the case of the last month of each
Fiscal Quarter), a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such month, together with consolidated statements
of earnings and cash flows for such month and for the period beginning with the
first day of such Fiscal Year and ending on the last day of such month, together
with a comparison with the corresponding period of the previous Fiscal Year and
a comparison with the budget for such period of the current Fiscal Year,
certified by the Chief Financial Officer or the Corporate Controller of the
Company.
10.1.3 Compliance Certificates. Contemporaneously with the furnishing of a
copy of each annual audit report pursuant to Section 10.1.1 and each set of
monthly statements pursuant to Section 10.1.2 for the last month of each Fiscal
Quarter, a duly completed compliance certificate in the form of Exhibit B with
appropriate insertions, dated the date of such annual report or such quarterly
statements and signed by the Chief Financial Officer or the Corporate Controller
of the Company, containing (i) a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it and (ii) a written statement of the
Company's management setting forth a discussion of the Company's financial
condition, changes in financial condition and results of operations.
10.1.4 Reports to the SEC and to Shareholders. Promptly upon the filing or
sending thereof, copies of, or electric links to, all regular, periodic or
special reports of the Company or any Subsidiary filed with the SEC; copies of
all registration statements of the Company or any Subsidiary filed with the SEC
(other than on Form S-8); and copies of all proxy statements or other
communications made to security holders generally.
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
37
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which has
been instituted or, to the knowledge of the Company, is threatened in
writing against the Company or any Subsidiary or to which any of the
properties of any thereof is subject which could reasonably be expected to
have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled Group
or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement welfare plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may
be terminated, or that any such plan is or may become insolvent;
(d) any cancellation or material change in any insurance maintained by
the Company or any Subsidiary; or
(e) any other event (including (i) any violation of any Environmental
Law or the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which could reasonably be
expected to have a Material Adverse Effect.
10.1.6 Borrowing Base Certificates. Within 30 days of the end of each
month, a Borrowing Base Certificate dated as of the end of such month and
executed by the Chief Financial Officer, the Corporate Controller or the
Corporate Secretary of the Company on behalf of the Company (provided that (i)
the Company may deliver a Borrowing Base Certificate more frequently if it
chooses and (ii) at any time the Excess Availability under the Revolving Loans
is less than Three Million Dollars ($3,000,000) or at any time an Event of
Default exists, the Agent or the Required Banks may require the Company to
deliver Borrowing Base Certificates more frequently).
10.1.7 Management Reports. Promptly upon the request of the Agent or any
Bank, copies of all detailed financial and management reports submitted to the
Company by independent auditors in connection with each annual or interim audit
made by such auditors of the books of the Company.
38
10.1.8 Projections. As soon as practicable after approval thereof by the
Board of Directors of the Company, and in any event during the 30 day period
prior to the commencement of each Fiscal Year, financial projections for the
Company and its Subsidiaries for such Fiscal Year (including an operating budget
and a cash flow budget) prepared in a manner consistent with the projections
delivered by the Company to the Banks prior to the Closing Date or otherwise in
a manner reasonably satisfactory to the Agent, accompanied by a certificate of
the Chief Financial Officer or the Corporate Controller of the Company on behalf
of the Company to the effect that (i) such projections were prepared by the
Company in good faith, (ii) the Company has a reasonable basis for the
assumptions contained in such projections and (iii) such projections have been
prepared in accordance with such assumptions.
10.1.9 Subordinated Debt Notices. Promptly from time to time, copies of any
notices (including notices of default or acceleration) received from any holder
or trustee of, under or with respect to any Subordinated Debt.
10.1.10 Other Information. Promptly from time to time, such other
information concerning the Company and its Subsidiaries as any Bank or the Agent
may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
or such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable prior notice (or at any time without notice
if an Event of Default exists), any Bank or the Agent or any representative
thereof to visit any or all of its offices, to discuss its financial matters
with its officers and its independent auditors (and the Company hereby
authorizes such independent auditors to discuss such financial matters with any
Bank or the Agent or any representative thereof), and to examine (and, at the
expense of the Company or the applicable Subsidiary, photocopy extracts from)
any of its books or other records; and permit, and cause each Subsidiary to
permit, the Agent and its representatives to inspect the Inventory and other
tangible assets of the Company or such Subsidiary, to perform appraisals of the
equipment and other fixed assets of the Company or such Subsidiary, and to
inspect, audit, check and make copies of and extracts from the books, records,
computer data, computer programs, journals, orders, receipts, correspondence and
other data relating to Inventory, Accounts Receivable and any other collateral.
All such inspections or audits by the Agent shall be at the Company's expense,
provided that so long as no Event of Default or Unmatured Event of Default
exists, the Company shall not be required to reimburse the Agent for
inspections, visits and appraisals or audits more frequently than once each
Fiscal Year.
10.3 Maintenance of Property; Insurance.
(a) Keep, and cause each Subsidiary to keep, all property useful and
necessary in the business of the Company or such Subsidiary in good working
order and condition, ordinary wear and tear excepted.
39
(b) Maintain, and cause each Subsidiary to maintain, with responsible
insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such
other insurance, to such extent and against such hazards and liabilities,
as is customarily maintained by companies similarly situated; and, upon
request of the Agent or any Bank, furnish to the Agent or such Bank a
certificate setting forth in reasonable detail the nature and extent of all
insurance maintained by the Company and its Subsidiaries. The Company shall
cause each issuer of an insurance policy to provide the Agent with an
endorsement (i) showing loss payable to the Agent with respect to each
policy of property or casualty insurance and naming the Agent and each Bank
as an additional insured with respect to each policy of insurance for
liability for personal injury or property damage, (ii) providing that 30
days' notice will be given to the Agent prior to any cancellation of such
policy and (iii) reasonably acceptable in all other respects to the Agent.
(c) UNLESS THE COMPANY PROVIDES THE AGENT WITH EVIDENCE OF THE
INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE
INSURANCE AT THE COMPANY'S EXPENSE TO PROTECT THE AGENT'S AND THE BANKS'
INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT THE
COMPANY'S INTERESTS. THE COVERAGE THAT THE AGENT PURCHASES MAY NOT PAY ANY
CLAIM THAT IS MADE AGAINST THE COMPANY IN CONNECTION WITH THE COLLATERAL.
THE COMPANY MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE AGENT, BUT ONLY
AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE COMPANY HAS OBTAINED
INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE
FOR THE COLLATERAL, THE COMPANY WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED
WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY
BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF
THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE COMPANY MAY BE
ABLE TO OBTAIN ON ITS OWN.
(d) The Agent agrees to notify the Company promptly after purchasing
any insurance pursuant to Section 10.3(c) hereof.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply could not reasonably be expected to have
a Material Adverse Effect; and (b) pay, and cause each Subsidiary to pay, prior
to delinquency, all taxes and other governmental charges against it or any of
its property, as well as claims of any kind which, if unpaid, could become a
Lien on any of its property; provided that the foregoing shall not require the
Company or any Subsidiary to
40
pay any such tax or charge so long as it shall contest the validity thereof in
good faith by appropriate proceedings and shall set aside on its books adequate
reserves with respect thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Except as provided herein, including,
without limitation under Section 10.10 hereof, (a) maintain and preserve, and
(subject to Section 10.11) cause each Subsidiary to maintain and preserve, (i)
its existence and good standing in the jurisdiction of its organization and (ii)
its qualification to do business and good standing in each jurisdiction where
the nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect); provided, however, that the dissolution of any
Subsidiary that is not a Restricted Subsidiary shall be permitted hereunder
notwithstanding anything to the contrary contained in this Agreement and (b) not
change its business organization or the jurisdiction under which it is organized
without having given the Agent thirty (30) days' prior written notice of its
intent to do so.
10.6 Financial Covenants.
10.6.1 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage
Ratio for any Computation Period on the last day of each Fiscal Quarter (i) to
be less than 1.25 to 1.00 on March 31, 2006 and June 30, 2006 and (ii) to be
less than 1.50 to 1.00 on September 30, 2006 and the last day of each Fiscal
Quarter thereafter.
10.6.2 Funded Debt to Adjusted EBITDA Ratio. Not permit the Funded Debt to
Adjusted EBITDA Ratio of any Computation Period, as measured on the last day of
each Fiscal Quarter, to exceed (i) 2.75 to 1.00 for such Computation Period on
March 31, 2006, June 30, 2006 and September 30, 2006, (ii) 2.50 to 1.00 for such
Computation Period on December 31, 2006 and March 31, 2007 and (iii) 2.25 to
1.00 for such Computation Period on June 30, 2007 and on the last day of each
Fiscal Quarter thereafter.
10.6.3 Capital Expenditures. Not permit the aggregate amount of all Capital
Expenditures made by the Company and its Subsidiaries in any Fiscal Year to
exceed $8,000,000.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:
(a) obligations under this Agreement and the other Loan Documents;
(b) Debt secured by Liens permitted by Section 10.8(d), and
extensions, renewals and refinancings thereof; provided that the aggregate
amount of all such Debt at any time outstanding shall not exceed
$4,000,000;
(c) Debt of Subsidiaries to the Company and Debt of the Company to
Guarantors;
41
(d) Subordinated Debt;
(e) Hedging Obligations incurred for bona fide hedging purposes;
(f) Debt described on Schedule 10.7 and any extension, renewal or
refinancing thereof so long as the principal amount thereof is not
increased;
(g) the Debt to be Repaid (so long as such Debt is repaid on the
Closing Date with the proceeds of the initial Loans hereunder);
(h) other Debt, in addition to the Debt listed above,: in an aggregate
amount not at any time exceeding $1,000,000;
(i) Debt to The Industrial Development Board of the City of Jefferson
City, Tennessee in connection with the industrial development revenue bonds
issued thereby secured by a Loan Agreement dated as of December 1, 2004
between the Borrower and The Industrial Development Board of the City of
Jefferson City, Tennessee.
10.8 Liens. Not, and not permit any Subsidiary to, enter into any agreement
with any third party not to incur or permit any lien, pledge or security
interest in any of its assets such as a negative pledge agreement with a third
party; nor shall the Company or any Subsidiary create or permit to exist any
Lien on any of its real or personal properties, assets or rights of whatsoever
nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety
bonds, bids, performance bonds and similar obligations) for sums not
overdue or being contested in good faith by appropriate proceedings and not
involving any deposits or advances or borrowed money or the deferred
purchase price of property or services and, in each case, for which it
maintains adequate reserves;
(c) Liens described on Schedule 10.8;
(d) subject to the limitation set forth in Section 10.7(b), (i) Liens
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof by the Company or any Subsidiary (and not created in
contemplation of such acquisition) and (iii) Liens that constitute purchase
money security interests on any property securing debt incurred for the
purpose of financing all or any part of the cost of acquiring such
property, provided that any such Lien attaches to such property within 60
days of the acquisition thereof and
42
attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $250,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Company
or any Subsidiary;
(g) Liens arising under the Loan Documents;
(h) the replacement, extension or renewal of any Lien permitted by
clause (c) above upon or in the same property theretofore subject thereto
arising out of the extension, renewal or replacement of the Debt secured
thereby (without increase in the amount thereof);
(i) Liens in addition to those otherwise permitted hereunder securing
Debt not exceeding $250,000 at any one time outstanding; and
(j) liens securing Debt permitted under Section 10.7(i).
10.9 Restricted Payments. Not, and not permit any Subsidiary to, (a) make
any distribution to any of its shareholders, (b) purchase or redeem any of its
capital stock or other equity interests or any warrants, options or other rights
in respect thereof, (c) pay any management fees or similar fees to any of its
shareholders or any Affiliate thereof, (d) make any redemption, prepayment,
defeasance or repurchase of any Subordinated Debt, or (e) set aside funds for
any of the foregoing. Notwithstanding the foregoing, (i) any Subsidiary may pay
dividends or make other distributions to the Company or to a Wholly-Owned
Subsidiary; and (ii) the Company may pay dividends, make distributions or
purchase or redeem stock so long as (y) no Event of Default or Unmatured Event
of Default exists immediately prior to such payment of dividends or would result
after giving pro forma effect to such payment of dividends and (z) after giving
pro forma effect to such payment of dividends, the Excess Availability would not
be less than $3,000,000.
10.10 Mergers, Consolidations, Acquisitions and Sales. Not, and not permit
any Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or,
except in the ordinary course of its business, sell, transfer, convey or lease
all or any substantial part of its assets, or sell or assign with or without
recourse any receivables, except for (a) any such merger, consolidation, sale,
transfer, conveyance, lease or assignment of or by any Wholly-Owned Subsidiary
into the Company or into, with or to any other Wholly-Owned Subsidiary; (b) any
such purchase or other acquisition by the Company or any Wholly-Owned Subsidiary
of the assets or stock of any Wholly-Owned Subsidiary; (c) any Acquisition by
the Company or any Wholly-Owned Subsidiary where (1) immediately before
43
and after giving effect to such Acquisition, no Event of Default or Unmatured
Event of Default shall exist; (2) the aggregate consideration to be paid by the
Company and its Subsidiaries (including any Debt assumed or issued in connection
therewith, the amount thereof to be calculated in accordance with GAAP) in
connection with such Acquisition (or any series of related Acquisitions) is less
than $5,000,000; (3) immediately after giving effect to such Acquisition, the
Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 10.6; and (4) in the case of the Acquisition
of any Person, the Board of Directors of such Person has approved such
Acquisition; (d) sales and dispositions of assets (including the stock of
Subsidiaries) for at least fair market value (as determined by the Board of
Directors of the Company) so long as the net book value of all assets sold or
otherwise disposed of in any Fiscal Year does not exceed 10% of the net book
value of the consolidated assets of the Company and its Subsidiaries as of the
last day of the preceding Fiscal Year; (e) dissolutions of Subsidiaries which
are not Restricted Subsidiaries; and (f) those dispositions listed on Schedule
10.l0 hereto.
10.11 Modification of Organizational Documents. Not permit the Certificate
or Articles of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which could
reasonably be expected to materially adversely affect the interests of the
Banks.
10.12 Use of Proceeds. (i) Use the proceeds of the Loans, and the Letters
of Credit, solely for working capital, to repay the Debt to be Repaid, for
payments permitted under Section 10.9 of this Agreement, for Acquisitions
permitted by Section 10.10, for Capital Expenditures, for working capital and
liquidity of the Restricted Subsidiaries and for other general corporate
purposes; (ii) not, and not permit any other Loan Party to engage, principally
or as one of its activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any Margin Stock; and (iii) not, and not permit
any other Loan Party to own any Margin Stock or use the proceeds from the Loans,
directly or indirectly, to purchase or carry any Margin Stock or for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry any Margin Stock if any of such uses could reasonably be
expected to cause any of the Loans under this Agreement to be considered
"purpose credit" as such term is defined in Regulations T, U or X of the Board
of Governors of the Federal Reserve Board. No Loan Party will take any action
that violates regulations T, U or X of the Federal Reserve Board.
10.13 Further Assurances. Take, and cause each Restricted Subsidiary to
take, such actions as are necessary or as the Agent or the Required Banks may
reasonably request from time to time (including the execution and delivery of
guaranties, security agreements, pledge agreements, mortgages, deeds of trust,
financing statements and other documents, the filing or recording of any of the
foregoing, and the delivery of stock certificates and other collateral with
respect to which perfection is obtained by possession) to ensure that (a) the
obligations of the Company hereunder and under the other Loan Documents (i) are
secured at all times by certain assets of the Company and its Restricted
Subsidiaries pursuant to the Collateral Documents and (ii) guaranteed by all of
its Restricted Subsidiaries (including, promptly upon the acquisition or
creation thereof, any Restricted Subsidiary acquired or created after the date
hereof) by execution of a counterpart of the Guaranty, (b) the obligations of
each Restricted Subsidiary under the Guaranty are secured by certain assets of
such Restricted Subsidiary pursuant to the Collateral
44
Documents, and (c) all collections from Accounts Receivable are directed to a
bank account maintained with the Agent or Bank of America.
10.14 Transactions with Affiliates. Not, and not permit any Subsidiary to,
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than the Company and its
Subsidiaries) which is on terms which are less favorable than are obtainable
from any Person which is not one of its Affiliates.
10.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations; provided, however, that the Company or any
Subsidiary may terminate a Pension Plan so long as it does not cause an Event of
Default under Section 12.1.6 of this Agreement.
10.16 Environmental Matters.
(a) If any Release or Disposal of Hazardous Substances shall occur or
shall have occurred on any real property or any other assets of the Company
or any Subsidiary, the Company shall, or shall cause the applicable
Subsidiary to, cause the prompt containment and removal of such Hazardous
Substances and the remediation of such real property or other assets as
necessary to comply with all Environmental Laws and to preserve the value
of such real property or other assets. Without limiting the generality of
the foregoing, the Company shall, and shall cause each Subsidiary to,
comply with any valid Federal or state judicial or administrative order
requiring the performance at any real property of the Company or any
Subsidiary of activities in response to the Release or threatened Release
of a Hazardous Substance.
(b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall, and
shall cause its Subsidiaries to, dispose of such hazardous waste only at
licensed disposal facilities operating in compliance with Environmental
Laws.
10.17 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services if such contract requires that
payment be made by it regardless of whether delivery is ever made of such
materials, supplies or other property or services.
10.18 Inconsistent Agreements. Not, and not permit any Subsidiary to, enter
into any agreement containing any provision which would (a) be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document, (b) prohibit the Company or any Subsidiary from granting to the
Agent, for the benefit of the Banks, a Lien on any of its assets (other than any
real property lease which prohibits the Company or any Subsidiary from granting
to the Agent, for the benefit of the Banks, a Lien on the Company's or such
Subsidiary's leasehold interest with respect to such lease or Fixtures located
on the premises subject to such lease) or (c) create or permit to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (i) pay dividends or make other distributions to the Company or any
45
other applicable Subsidiary, or pay any Debt owed to the Company or any other
Subsidiary, (ii) make loans or advances to the Company or (iii) transfer any of
its assets or properties to the Company.
10.19. Business Activities. Not, and not permit any Subsidiary to, engage
in any line of business other than the businesses engaged in on the date hereof
and businesses reasonably related thereto.
10.20 Investments. Not, and not permit any Subsidiary to, make or permit to
exist any Investment in any other Person, except (without duplication) the
following:
(a) Suretyship Liabilities permitted by Section 10.7;
(b) Cash Equivalent Investments;
(c) bank deposits in the ordinary course of business, provided that
the aggregate amount of all such deposits which are maintained with any
bank other than a Bank (or any other bank or financial institution which
has entered into an agreement with Agent to perfect Agent's liens on the
Collateral which is in a form satisfactory to Agent in its reasonable
discretion) shall not at any time exceed $250,000;
(d) Investments in securities of account debtors received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such account debtors;
(e) Investments to consummate Acquisitions permitted by Section 10.10;
and
(f) Investments listed on Schedule 10.20; and
(g) Investments in addition to Investments otherwise permitted by this
Section 10.20 not exceeding $750,000 at any one time outstanding.
provided that (x) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (a),
(e), or (g) shall be permitted to be made if, immediately before or after giving
effect thereto, any Event of Default or Unmatured Event of Default exists.
10.21 Fiscal Year. Not change its Fiscal Year without having given the
Agent and Banks thirty (30) day's prior written notice of such change.
10.22 Cancellation of Debt. Not, and not permit any Subsidiary to, cancel
any claim or debt owing to it, except for reasonable consideration or in the
ordinary course of business, and except for the cancellation of debts or claims
not to exceed $250,000 in any Fiscal Year.
46
SECTION 11
EFFECTIVENESS; CONDITIONS OF LENDING, ETC
The obligation of each Bank to make its Loans and of the Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:
11.1 Initial Credit Extension. The obligation of the Banks to make the
initial Loans and the obligation of the Issuing Bank to issue its initial Letter
of Credit (whichever first occurs) is, in addition to the conditions precedent
specified in Section 11.2, subject to the conditions precedent that (1) all Debt
to be Repaid has been (or concurrently with the initial borrowing will be) paid
in full, and that all agreements and instruments governing the Debt to be Repaid
and that all Liens securing such Debt to be Repaid have been (or concurrently
with the initial borrowing will be) terminated (unless such liens are in favor
of the Agent) and (2) the Agent shall have received all of the following, each
duly executed and dated the Closing Date (or such earlier date as shall be
satisfactory to the Agent), in form and substance satisfactory to the Agent (and
the date on which all such conditions precedent have been satisfied or waived in
writing by the Agent and the Banks is called the "Closing Date"):
11.1.1 Notes. The Notes.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance by
the Company of this Agreement, the Notes and the other Loan Documents to which
the Company is a party; and certified copies of resolutions of the Board of
Directors of each other Loan Party authorizing the execution, delivery and
performance by such Loan Party of each Loan Document to which such entity is a
party.
11.1.3 Consents, etc. Copies (certified as true and correct by the
Secretary or Assistant Secretary of the Company) of all documents evidencing any
necessary corporate or shareholder action, consents and governmental approvals
(if any) required for the execution, delivery and performance by the Company and
each other Loan Party of the documents referred to in this Section 11.
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary (or other appropriate representative) of
each Loan Party certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents, together with a sample of the true
signature of each such officer (it being understood that the Agent and each Bank
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).
11.1.5 Security Agreement. A counterpart of the Security Agreement executed
by the Company and each Restricted Subsidiary.
11.1.6 Opinion(s) of Counsel. The opinion of WilmerHale.
47
11.1.7 Insurance. Evidence satisfactory to the Agent of the existence of
insurance required to be maintained pursuant to Section 10.3(b), together with
evidence that the Agent has been named as a lender's loss payee and an
additional insured on all related insurance policies.
11.1.8 Payment of Fees. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, including, but not limited to, the Loan Fee, together with all
Attorney Costs of the Agent to the extent invoiced prior to the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute the Agent's
reasonable estimate of Attorney Costs incurred or to be incurred by the Agent
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and the
Agent).
11.1.9 Search Results; Lien Terminations. Certified copies of Uniform
Commercial Code Requests for Information or Copies (Form UCC-11), or a similar
search report certified by a party acceptable to the Agent, dated a date
reasonably near to the Closing Date, listing all effective financing statements
which name the Company and each Subsidiary other than foreign Subsidiaries
(under their present names and any previous names) as debtors and which are
filed in the jurisdictions in which filings are to be made pursuant to the
Collateral Documents, together with (i) copies of such financing statements,
(ii) executed copies of proper Uniform Commercial Code Form UCC-3 termination
statements, if any, necessary to release all Liens and other rights of any
Person in any collateral described in the Collateral Documents previously
granted by any Person (other than Liens permitted by Section 10.8) and (iii)
such other Uniform Commercial Code Form UCC-3 termination statements as the
Agent may reasonably request.
11.1.10 Filings, Registrations and Recordings. The Agent shall have
received each document (including Uniform Commercial Code financing statements)
required by the Collateral Documents or under law or reasonably requested by the
Agent to be filed, registered or recorded in order to create in favor of the
Agent, for the benefit of the Banks, a perfected Lien on the collateral
described therein, prior and superior to any other Person, in proper form for
filing, registration or recording.
11.1.11 Closing Certificate. A certificate signed by a the Chief Financial
Officer of the Company dated as of the Closing Date, affirming the matters set
forth in Section 11.2.1 as of the Closing Date.
11.1.12 Borrowing Base Certificate. Borrowing Base Certificate dated within
thirty (30) days before the Closing Date.
11.1.13 Other. Such other documents as the Agent or any Bank may reasonably
request.
11.2 Conditions. The obligation (a) of each Bank to make each Loan and (b)
of the Issuing Bank to issue each Letter of Credit is subject to the following
further conditions precedent that:
48
11.2.1 Compliance with Warranties, No Default, etc. Both before and after
giving effect to any borrowing and the issuance of any Letter of Credit, the
following statements shall be true and correct:
(a) the representations and warranties of the Company and each
Subsidiary set forth in this Agreement and the other Loan Documents shall
be true and correct in all material respects with the same effect as if
then made (except to the extent stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date); and
(b) no Event of Default or Unmatured Event of Default shall have then
occurred and be continuing.
11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank, the
Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 11.2.1 (it being understood that each request by the Company
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in Section 11.2.1 will be satisfied at the time of the making of such Loan or
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
SECTION 12
EVENTS OF DEFAULT AND THEIR EFFECT
12.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for three (3)
Business Days, in the payment when due of any interest, fee, reimbursement
obligation with respect to any Letter of Credit or other amount payable by the
Company hereunder or under any other Loan Document.
12.1.2. Non-Payment of Other Debt. Any default shall occur under the terms
applicable to any Debt of the Company or any Subsidiary, including but not
limited to any obligations arising under the Reimbursement Agreement, in an
aggregate amount (for all such Debt so affected) exceeding $500,000 and such
default shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable (or require the Company or
any Subsidiary to purchase or redeem such Debt) prior to its expressed maturity.
12.1.3 Bankruptcy, Insolvency, etc. The Company or any Subsidiary becomes
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become
49
due; or the Company or any Subsidiary applies for, consents to, or acquiesces in
the appointment of a trustee, receiver or other custodian for the Company or
such Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for a substantial part of the property of any
thereof and is not discharged within 60 days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding, is commenced in respect of
the Company or any Subsidiary, and if such case or proceeding is not commenced
by the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary, or remains for 30 days undismissed; or the Company
or any Subsidiary takes any action to authorize, or in furtherance of, any of
the foregoing.
12.1.4 Non-Compliance with Loan Documents. (a) Failure by the Company to
comply with or to perform any covenant set forth in Sections 10.1.5(a), 10.5
through 10.6, 10.9 through 10.14 and 10.19 through 10.21; or (b) failure by the
Company to comply with or to perform any other provision of this Agreement or
any other Loan Document (and not constituting an Event of Default under any
other provision of this Section 12) and continuance of such failure described in
this clause (b) for 30 days.
12.1.5 Warranties. Any warranty made by the Company or any Subsidiary
herein or any other Loan Document is breached or is false or misleading in any
material respect, or any schedule, certificate, financial statement, report,
notice or other writing furnished by the Company or any Subsidiary to the Agent
or any Bank in connection herewith is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
12.1.6 Pension Plans. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in either case in excess
of $500,000; (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Pension
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any outstanding
withdrawal liability that the Company and the Controlled Group have incurred on
the date of such withdrawal) exceeds $500,000.
12.1.7 Judgments. Final judgments which exceed an aggregate of $500,000
shall be rendered against the Company or any Subsidiary and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
12.1.8 Invalidity of Collateral Documents, Loan Documents, etc. Any
Collateral Document or Loan Document shall cease to be in full force and effect;
or the Company or any Subsidiary (or any Person by, through or on behalf of the
Company or any Subsidiary) shall contest in any manner the validity, binding
nature or enforceability of any Collateral Document
50
or Loan Document.
12.1.9 Invalidity of Subordination Provisions, etc. Any subordination
provision in any document or instrument governing Subordinated Debt, or any
subordination provision in any guaranty by any Subsidiary of any Subordinated
Debt, shall cease to be in full force and effect, or the Company or any other
Person (including the holder of any applicable. Subordinated Debt) shall contest
in any manner the validity, binding nature or enforceability of any such
provision.
12.1.10 Change of Control. During any period of 12 consecutive months, a
majority of the members (excluding any vacancies) of the Company's Board of
Directors or other equivalent governing body of the company cease to be composed
of individuals (i) who were members of such Board of Directors or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to such Board of Directors or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of such Board of Directors or
equivalent governing body or (iii) whose election or nomination to that board or
other equivalent governing body were approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of such Board of Directors or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the Company's Board of
Directors).
12.1.11 Material Adverse Effect. The occurrence of any event having a
Material Adverse Effect.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.3 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Loans and all other obligations
hereunder to be due and payable and/or demand that the Company immediately Cash
Collateralize all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Loans and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to Cash Collateralize all Letters of
Credit, all without presentment, demand, protest or notice of any kind. The
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such declaration. Notwithstanding the
foregoing, the effect as an Event of Default of any event described in Section
12.1.1 or Section 12.1.3 may be waived by the written concurrence of all of the
Banks, and the effect as an Event of Default of any other event described in
this Section 12 may be waived by the written concurrence of the Required Banks.
Any cash collateral delivered hereunder shall be held by the Agent (without
liability for interest thereon) and applied to
51
obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may elect.
SECTION 13
THE AGENT
13.1 Appointment and Authorization.
(a) Each Bank hereby irrevocably (subject to Section 13.9) appoints,
designates and authorizes the Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duty or responsibility
except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Agent.
(b) The Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith.
The Issuing Bank shall have all of the benefits and immunities (i) provided
to the Agent in this Section 13 with respect to any acts taken or omissions
suffered by the Issuing Bank in connection with Letters of Credit issued by
it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the
term "Agent", as used in this Section 13., included the Issuing Bank with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
13.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through Agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any Agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent nor any of its directors,
officers, employees or agents shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, or
any officer
52
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of the Company or any other party to any Loan Document to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates,
13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper. Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify the
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Unmatured Event of Default
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or the Company referring to this
Agreement, describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". The Agent will notify the
Banks of its receipt of any such notice. The Agent shall take such action with
respect to such Event of Default or Unmatured Event of Default as may be
requested by the Required Banks in accordance with Section 12; provided that
unless and until the Agent has received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default or Unmatured Event of Default as it shall
deem advisable or in the best interest of the Banks.
13.6 Credit Decision. Each Bank acknowledges that the Agent has not made
any representation or warranty to it, and that no act by the Agent hereafter
taken, including any review of the affairs of the Company and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Bank. Each Bank represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and made its own decision
to enter into this Agreement and to
53
extend credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial or other condition or creditworthiness of the Company which may come
into the possession of the Agent.
13.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Banks shall indemnify upon demand the Agent and its
directors, officers, employees and Agents (to the extent not reimbursed by or on
behalf of the Company and without limiting the obligation of the Company to do
so), pro rata, from and against any and all Indemnified Liabilities; provided
that no Bank shall be liable for any payment to any such Person of any portion
of the Indemnified Liabilities resulting from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive repayment of the Loans, cancellation of the Notes,
expiration or termination of the Letters of Credit, any foreclosure under, or
modification, release or discharge of, any or all of the Collateral Documents,
termination of this Agreement and the resignation or replacement of the Agent.
13.8 Agent in Individual Capacity. LaSalle and its Affiliates (as well as
any other Bank) may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
the Company and its Subsidiaries and Affiliates as though LaSalle were not the
Agent or the Issuing Bank hereunder and without consent of the Banks (unless
such action would require such consent pursuant to the terms of this Agreement).
Each Bank agrees to give notice of any such activities to the other Banks. The
Banks acknowledge that, pursuant to such activities, LaSalle or its Affiliates
may receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans (if
any), LaSalle and its Affiliates shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though LaSalle
were not the Agent and the Issuing Bank, and the terms "Bank" and "Banks"
include LaSalle and its Affiliates, to the extent applicable, in their
individual capacities.
54
13.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice to
the Banks and the Company. If the Agent resigns under this Agreement, the
Required Banks shall, with (so long as no Event of Default exists) the consent
of the Company (which shall not be unreasonably withheld or delayed), appoint
from among the Banks a successor Agent for the Banks. If no successor Agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Company, a successor Agent
from among: the Banks. Upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
Agent, and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 13 and Sections 14.6 and 14.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor Agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor Agent as provided for
above.
13.10 Collateral Matters. The Banks irrevocably authorize the Agent, at its
option and in its discretion, (a) to release any Lien granted to or held by the
Agent under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Company hereunder
and the expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (iii) subject to Section 14.1, if approved,
authorized or ratified in writing by the Required Banks; or (b) to subordinate
its interest in any collateral to any holder of a Lien on such collateral which
is permitted by clause (d)(i) or (d)(iii) of Section 10.8 (it being understood
that the Agent may conclusively rely on a certificate from the Company in
determining whether the Debt secured by any such Lien is permitted by Section
10.7(b)). Upon request by the Agent at any time, the Banks will confirm in
writing the Agent's authority to release, or subordinate its interest in,
particular types or items of collateral pursuant to this Section 13.10.
13.11 Amendment of Section 13. The Company hereby agrees that the
provisions of this Section 13 (other than Section 13.9) generally constitute an
agreement among the Agent and the Banks and that any and all of the provisions
of this Section 13 (other than Section 13.9) may be amended at any time by the
Banks without the consent or approval of, but with notice to, the Company (other
than any provision in addition to Section 13.9 to the extent that it directly or
in any material way affects the Company).
SECTION 14
GENERAL
14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or
55
partial exercise by any of them of any right, power or remedy preclude other or
further exercise thereof, or the exercise of any other right, power or remedy.
This Agreement and the other Loan Documents are intended by the parties as the
final, complete and exclusive statement of the transactions evidenced by this
Agreement and the other Loan Documents. All prior or contemporaneous promises,
agreements and understandings, whether oral or written, are deemed to be
superceded by this Agreement and the other Loan Documents, and no party is
relying on any promise, agreement or understanding not set forth in this
Agreement and the other Loan Documents. No amendment, modification or waiver of,
or consent with respect to, any provision of this Agreement or the Notes shall
in any event be effective unless the same shall be in writing and signed and
delivered by Banks having an aggregate Pro Rata Share of not less than the
aggregate Pro Rata Share expressly designated herein with respect thereto or, in
the absence of such designation as to any provision of this Agreement or the
Notes, by the Required Banks, and then any such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent shall
change the Pro Rata Share of any Bank without the consent of such Bank. No
amendment, modification, waiver or consent shall (i) increase the Revolving
Commitment Amount, (ii) extend the date for payment of any principal of or
interest on the Loans or any fees payable hereunder, (iii) reduce the principal
amount of any Loan, the rate of interest thereon or any fees payable hereunder,
or (iv) reduce the aggregate Pro Rata Share required to effect an amendment,
modification, waiver or consent without, in each case, the consent of all Banks.
No provision of Section 13, or other provision of this Agreement affecting the
Agent in its capacity as such shall be amended, modified or waived without the
consent of the Agent. No provision of this Agreement relating to the rights or
duties of the Issuing Bank in its capacity as such shall be amended, modified or
waived without the consent of the Issuing Bank.
14.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Sections 2.2.2 and 2.2.3, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Sections 2.2.2 and 2.2.3, the Agent shall
be entitled to rely on telephonic instructions from any person that the Agent in
good faith believes is an authorized officer or employee of the Company, and the
Company shall hold the Agent and each other Bank harmless from any loss, cost or
expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or
56
calculation shall, to the extent applicable and except as otherwise specified in
this Agreement, be made in accordance with GAAP, consistently applied; provided
that if the Company notifies the Agent that the Company wishes to amend any
covenant in Section 10 to eliminate or to take into account the effect of any
change in GAAP on the operation of such covenant (or if the Agent notifies the
Company that the Required Banks wish to amend Section 10 for such purpose), then
the Company's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory, to the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Banks (including Attorney
Costs) in connection with the preparation, execution, syndication and delivery
of this Agreement, the other Loan Documents and all other documents provided for
herein or delivered or to be delivered hereunder or in connection herewith
(including any amendment, supplement or waiver to any Loan Document), and all
reasonable out-of-pocket costs and expenses (including Attorney Costs) incurred
by the Agent and each Bank after an Event of Default in connection with the
enforcement of this Agreement, the other Loan Documents or any such other
documents. In addition, the Company agrees to pay, and to save the Agent and the
Banks harmless from all liability for, (a) any stamp or other taxes (excluding
income taxes and franchise taxes based on net income) which may be payable in
connection with the execution and delivery of this Agreement, the borrowings
hereunder, the issuance of the Notes or the execution and delivery of any other
Loan Document or any other document provided for herein or delivered or to be '
delivered hereunder or in connection herewith and (b) any reasonable fees of the
Company's auditors in connection with any reasonable exercise by the Agent and
the Banks of their rights pursuant to Section 10.2. All obligations provided for
in this Section 14.6 shall survive repayment of the Loans, cancellation of the
Notes, expiration or termination of the Letters of Credit and termination of
this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating to
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Bank may, with the prior written consents of the
Issuing Bank and the Agent and (so long as no Event of Default exists) the
Company (which consents shall not be unreasonably delayed or withheld and, in
any event, shall not be required for an assignment by a Bank to one of its
Affiliates), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made
57
being herein called an "Assignee") pursuant to written assignment agreements
executed by such assigning Bank, such Assignee, the Company and the Agent which
agreements shall specify in each instance the portion of the assigning Bank's
Loans which is to be assigned to such Assignee and the portion of the
Commitments of the assigning Bank to be assumed by the Assignee (the "Assignment
Agreements") all or any fraction of such Bank's Loans and Commitment (which
assignment and delegation shall be of a constant, and not a varying, percentage
of all the assigning Bank's Loans and Commitment) in a minimum aggregate amount
equal to the lesser of (i) the amount of the assigning Bank's Pro Rata Share of
the Revolving Commitment Amount and (ii) $5,000,000; provided that (a) no
assignment and delegation may be made to any Person if, at the time of such
assignment and delegation, the Company would be obligated to pay any greater
amount under Section 7.6 or Section 8 to the Assignee than the Company is then
obligated to pay to the assigning Bank under such Sections (and if any
assignment is made in violation of the foregoing, the Company will not be
required to pay the incremental amounts) and (b) the Company and the Agent shall
be entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned and delegated to an Assignee until the date when
all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the Agent and
the assigning Bank shall agree) shall have passed after written notice of
such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee, shall have
been given to the Company and the Agent by such assigning Bank and the
Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an Assignment Agreement, together
with any documents required to be delivered thereunder, which Assignment
Agreement shall have been accepted by the Agent and, if applicable, the
Company, and
(z) except in the case of an assignment by a Bank to one of its
Affiliates, the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Pro Rata Share of the Revolving Commitment Amount and, if the
assigning Bank has retained a Commitment hereunder, a replacement Note in the
principal amount of the Pro Rata Share of the Revolving Commitment Amount
retained by the assigning Bank retained by the assigning Bank (such Note to be
in exchange for, but not in payment of, the predecessor Note held by such
assigning Bank). Each such Note shall be dated the effective date of such
assignment. The assigning Bank shall xxxx the predecessor Note "exchanged" and
deliver it to the Company. Accrued interest on that
58
part of the predecessor Note being assigned shall be paid as provided in the
Assignment Agreement, subject to the terms hereof. Accrued interest and fees on
that part of the predecessor Note not being assigned shall be paid to the
assigning Bank, subject to the terms hereof. Accrued interest and accrued fees
shall be paid at the same time or times provided in the predecessor Note and in
this Agreement. Any attempted assignment and delegation not made in accordance
with this Section 14.9.1 shall be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"). In the event of a sale by a Bank
of a participating interest to a Participant, (x) such Bank shall remain the
holder of its Note for all purposes of this Agreement, (y) the Company and the
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations hereunder and (z) all amounts payable by
the Company shall be determined as if such Bank had not sold such participation
and shall be paid directly to such Bank. No Participant shall have any direct or
indirect voting rights hereunder except with respect to any of the events
described in the fourth sentence of Section 14.1. Each Bank agrees to
incorporate the requirements of the preceding sentence into each participation
agreement which such Bank enters into with any Participant. The Company agrees
that each Participant shall be entitled to the benefits of Section 7.6 and
Section 8 as if it were a Bank (provided that no Participant shall receive, nor
shall the Company be obligated to pay, any greater compensation pursuant to
Section 7.6 or Section 8 than would have been paid to the participating Bank if
no participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State. Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the Banks
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Company, the
59
Banks and the Agent and their respective successors and assigns, and shall inure
to the benefit of the Company, the Banks and the Agent and the successors and
assigns of the Banks and the Agent.
14.13 Indemnification by the Company. In consideration of the execution and
delivery of this Agreement by the Agent and the Banks and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agent, each Bank and each of the officers,
directors, employees, Affiliates and Agents of the Agent and each Bank (each a
"Bank Party") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including Attorney
Costs (collectively, the "Indemnified Liabilities"), incurred by the Bank
Parties or any of them as a result of, or arising out of, or relating to (i) any
tender offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of the applicable Bank Party's
gross negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. All
obligations provided for in this Section 14.13 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or any modification, release or discharge of, any
or all of the Collateral Documents and termination of this Agreement.
14.14 Nonliability of Banks. The relationship between the Company on the
one hand and the Banks and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent nor any Bank shall have any fiduciary
responsibility to the Company. Neither the Agent nor any Bank undertakes any
responsibility to the Company to review or inform the Company or any matter in
connection with any phase of the Company's business or operations. The Company
agrees that neither the Agent nor any Bank shall have liability to the Company
(whether sounding in tort, contract or otherwise) for losses suffered by the
Company in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the Agent
nor any Bank shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to xxx for, any special, indirect or
consequential damages suffered by the Company in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.
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14.15 Information/Confidentiality. As required by federal law and the
Agent's policies and practices, the Agent may need to obtain, verify, and record
certain customer identification information and documentation in connection with
opening or maintaining accounts, or establishing or continuing to provide
services. The Agent and each Bank agree to use commercially reasonable efforts
(equivalent to the efforts the Agent or such Bank applies to maintain the
confidentiality of its own confidential information) to maintain as confidential
all information provided to them by any Loan Party and designated as
confidential, except that the Agent and each Bank may disclose such information
(a) to Persons employed or engaged by the Agent or such Bank in evaluating,
approving, structuring or administering the Loans; (b) to any assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 14.15 (and any such assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as described in clause (a) above); (c) as
required or requested by any federal or state regulatory authority or examiner,
or any insurance industry association, or as reasonably believed by the Agent or
such Bank to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the Agent's or such
Bank's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any litigation to
which the Agent or such Bank is a party; (f) to any nationally recognized rating
agency that requires access to information about a Bank's investment portfolio
in connection with ratings issued with respect to such Bank; (g) to any
Affiliate of the Agent, the Issuing Bank or any other Bank if such parties agree
to be bound by the confidentiality obligations of the Agent and Banks set forth
in this Section 14.15; or (h) that ceases to be confidential through no fault of
the Agent or any Bank.
14.16 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
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14.17 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH BANK
HEREBY KNOWINGLY , VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EXCEPT
AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM
OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE
COMPANY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY
BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY BANK WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR AGENT AND THE BANKS TO ACCEPT THIS
AGREEMENT AND MAKE THE LOANS.
14.18 EXISTING CREDIT AGREEMENT; EFFECTIVENESS OF AMENDMENT AND
RESTATEMENT. Until this Agreement becomes effective in accordance with the
conditions set forth in Section 11, the Existing Credit Agreement shall remain
in full force and effect and shall not be affected hereby. After the Closing
Date, all obligations of the Company under the Existing Credit Agreement shall
become obligations of the Company hereunder, secured by the Collateral
Documents, and the provisions of the Existing Credit Agreement shall be
superseded by the provisions hereof; provided, that (i) the Existing Credit
Agreement shall continue to apply to all events, circumstances and periods
arising or existing prior to the Closing Date and (ii) the effectiveness of this
Agreement shall not be deemed to be a waiver of or consent to any default or
other violation of the terms of the Existing Credit Agreement or other Loan
Documents occurring or existing prior to the Closing Date.
14.19 CONFIRMATION/RATIFICATION OF THE REVOLVING LOAN. The Company hereby
agrees that, as of the Closing Date, it is fully and truly indebted to the Banks
for the full amount of the Loans stated herein. Furthermore, without limiting
any of the other provisions of this Agreement, the Company and each Bank agrees
that (i) the loans made to the Company by the Banks shall be subject to and
shall benefit from all of the provisions of this Agreement and the other Loan
Documents applicable to the Loans hereunder and thereunder, and (ii) the unpaid
principal of and interest on the Loans are obligations of the Company hereunder
and under the other Loan Documents.
14.20 EFFECT OF AMENDMENT AND RESTATEMENT OF THE EXISTING CREDIT AGREEMENT.
(a) On the Closing Date, the Existing Credit Agreement shall be amended and
restated in its entirety. The parties hereto acknowledge and agree that (i) this
Agreement and the other Loan Documents, whether executed and delivered in
connection herewith or otherwise, do not constitute a novation, payment and
reborrowing, or termination of the obligations of the
62
Company under the Existing Credit Agreement as in effect prior to the Closing
Date and which remain outstanding; (ii) such obligations of the Company under
the Existing Credit Agreement are in all respects continuing (as amended and
restated hereby); (iii) the Liens and security interests as granted under the
Collateral Documents securing payment of such obligations of the Company under
the Existing Credit Agreement are in all respects continuing and in full force
and effect; (iv) references in the Loan Documents to the "Credit Agreement"
shall be deemed to be references to this Agreement, and to the extent necessary
to effect the foregoing, each such Loan Document is hereby deemed amended
accordingly, (v) all of the terms and provisions of the Existing Credit
Agreement shall continue to apply for the period prior to the Closing Date,
including any determinations of payment dates, interest rates, Events of Default
or any amount that may be payable to the Agent or the Banks (or their assignees
or replacements hereunder), (vi) the obligations under the Existing Credit
Agreement shall continue to be paid or prepaid on or prior to the Closing Date,
and shall from and after the Closing Date continue to be owing and be subject to
the terms of this Agreement, (vii) all references in the Loan Documents to the
"Banks" or a "Bank" or to the "Agent" shall mean such terms as defined in this
Agreement.
(b) The Company, the Agent and the Banks and the other parties hereto
acknowledge and agree that all principal, interest, fees, costs, reimbursable
expenses and indemnification obligations accruing or arising under or in
connection with the Existing Credit Agreement which remain unpaid and
outstanding as of the Closing Date shall be and remain outstanding and payable
as an obligation under this Agreement and the other Loan Documents.
14.21 EXISTING AGREEMENTS SUPERSEDED. As set forth herein, the Existing
Credit Agreement is superseded by this Agreement, which has been executed in
renewal, amendment, restatement and modification, but not in novation or
extinguishment of, the obligations under the Existing Credit Agreement.
[signature page attached]
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Delivered at Chicago, Illinois, as of the day and year first
above written.
NASHUA CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Title: Vice President-Finance, CFO and
Treasurer
LASALLE BANK NATIONAL ASSOCIATION,
as Agent, Issuing Bank and as a Bank
By: /s/ Xxx X. Xxxxxx
------------------------------------
Title: Senior Vice President
BANK OF AMERICA, as a Bank
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Senior Vice President
Amended and Restated Credit Agreement
Exhibit A:
Form of Notes
(see attached)
Exhibit B:
Form of Compliance Certificate
(see attached)
Exhibit C:
Form of Amended and Restated Security Agreement
(see attached)
Exhibit D:
Form of Borrowing Base Certificate
(see attached)
Exhibit E:
Form of Guaranty
(see attached)
PRICING SCHEDULE
The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the LC Fee
Rate shall be determined as set forth below. As of the date hereof, the
applicable rates shall be at the "Tier III" level referenced below until the
next Adjustment Date.
The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the LC Fee
Rate shall be equal to the applicable rate per annum set forth in the table
below opposite the applicable Total Debt to Adjusted EBITDA Ratio:
TOTAL DEBT LIBOR BASE RATE NON-USE LC FEE
TIERS TO ADJUSTED EBITDA RATIO MARGIN MARGIN FEE RATE RATE
----- ------------------------ ------ --------- -------- ------
Tier IV Greater than 2.50:1 2.00% .25% .375% 2.00%
Tier III Greater than 2.00:1 but less than
or equal to 2.50:1 1.75% .0% .25% 1.75%
Tier II Greater than 1.50 to 1.00 but
less than or equal to 2.00:1 1.50% 0% .25% 1.50%
Tier I Less than or equal to 1.50:1 1.25% 0% .25% 1.25%
The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the LC Fee Rate
shall be adjusted, to the extent applicable, on the 45th or, in the case of the
last Fiscal Quarter of each Fiscal Year, 120th day after the end of each Fiscal
Quarter (each such date, an "Adjustment Date"), retroactively to the first day
of such Fiscal Quarter, based on the Total Debt to Adjusted EBITDA Ratio as of
the last day of such Fiscal Quarter; it being understood that if the Company
fails to deliver the financial statements required by Section 10.1.1 or 10.1.2,
as applicable, and the related Compliance Certificate, required by Section
10.1.3 by the 45th day (or, if applicable, the 120th day) after any Fiscal
Quarter, the LIBOR Margin shall be 2.00%, the Base Rate Margin shall be .25%,
the Non-Use Fee Rate shall be .375% and the LC Fee Rate shall be 2.00% until
such financial statements and Compliance Certificate are delivered.
Notwithstanding the foregoing, no reduction to the foregoing interest rate
margins or fee rates shall become effective at any time when an Event of Default
or Unmatured Event of Default has occurred and is continuing.
