DATED: October 4, 1996
THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation (hereinafter "CITBC"), with offices located at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (CITBC, and any
other party hereafter becoming a Lender hereunder pursuant to
Section 14, Paragraph 9 hereof each individually sometimes
referred to as a "Lender" and collectively the "Lenders") and
CITBC as Agent for the Lenders (hereinafter the "Agent") are
pleased to confirm the terms and conditions under which the
Lenders acting through the Agent shall make revolving loans, term
loans and other financial accommodations to Harvard Industries,
Inc., a Florida corporation (herein "Harvard"), The Xxxxxxxx-
Xxxxxx Corporation, a New Hampshire corporation ("Xxxxxxxx
Xxxxxx"), Xxxxxx Automotive, Inc., a Michigan corporation
("Xxxxxx Automotive"), Xxxxx-Albion Corporation, a Michigan
corporation ("Xxxxx-Albion"), and Xxxxxxx-Xxxxxx, Inc., a
Delaware corporation ("DJ Inc."), Xxxxxxx-Xxxxxx Greeneville,
Inc., a Delaware corporation ("DJ Greeneville"), Xxxxxxx-Xxxxxx
Pottstown, Inc., a Delaware corporation ("DJ Pottstown"),
Xxxxxxx-Xxxxxx Technologies, Inc., a Delaware corporation ("DJ
Technologies"), and Xxxxxxx-Xxxxxx Toledo, Inc., a Delaware
corporation ("XX Xxxxxx"). Harvard and each of the entities
subsequently identified above are referred to herein individually
as a "Company" and collectively as the Companies.
SECTION 1. DEFINITIONS
(a) As used herein the following terms have the
meanings indicated (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
ACCOUNTS means all of each Company's now existing and
future accounts (as defined in the U.C.C.) and any and all other
receivables (whether or not specifically listed on schedules
furnished to the Agent), including, without limitation, all
accounts created by or arising from all of its sales of goods or
rendition of services to its customers, and all accounts arising
from sales or rendition of services made under any of its trade
names or styles, or through any of its divisions.
ACCOUNTS RECEIVABLE ADVANCE PERCENTAGE means eighty-
five percent (85%).
AGENT COMMITMENT LETTER means the commitment letter
dated September 16, 1996 issued by the Agent to, and accepted by,
the Companies.
AGENT FEE means the amount set forth in the Agent Fee
Letter, which shall be paid to the Agent in accordance with
Section 8, Paragraph 9 hereof to offset the expenses and costs of
the Agent in connection with record-keeping, periodic
examinations, analyzing and evaluating the Collateral.
AGGREGATE NET AVAILABILITY means the sum of the
Availability for each of the Companies less the Availability
Reserve then in effect.
APPLICABLE BASE RATE MARGIN means the margin on all
Revolving Loans the interest in respect of which is calculated by
reference to The Chase Manhattan Bank Rate, in the amount set
forth in the Fee Letters.
APPLICABLE EURODOLLAR RATE MARGIN means the margin on
all Revolving Loans which are Libor Loans, in the amount set
forth in the Fee Letters.
APPLICABLE TERM LOAN MARGIN means the margin on all
Term Loans, in the amount set forth in the Fee Letters.
ASSET SALE PROCEEDS means cash payments in respect of
asset sales permitted under Section 7, Paragraph 10(d)(iii)
received by any of the Companies (including, without limitation,
any cash payments received by way of deferred payment of
principal (but not interest) pursuant to a note or receivable or
otherwise), and any amount eliminated from any reserve referred
to in clause (e) below upon receipt of final cash proceeds, in
each case net of the amount of (a) brokers' and advisors' fees
and commissions payable in connection with such sale, (b) the
fees and expenses attributable to such sale, to the extent not
included in clause (a) above, (c) the amount of any Indebtedness
secured by a Lien on the property sold, (d) any amount required
to be paid to any Person (other than the Companies) owning a
beneficial interest in the property or assets subject to such
sale, (e) deduction for the amount of any reserve established in
the Consolidated Financial Statements in respect of liabilities
retained or representations or warranties made in connection with
such sale, including, without limitation, any indemnification
associated therewith and (f) all sales taxes and other stamp or
documentary taxes paid by the relevant Company in connection with
such sale; provided, however that Asset Sale Proceeds shall not
include proceeds arising from the sale of assets that are or were
at any time owned by ESNA.
ASSIGNMENT AND TRANSFER AGREEMENT means each Assignment
and Transfer Agreement in the form of Exhibit C hereto.
AVAILABILITY means, as to any Company, at any time the
excess of (i) the sum of a) Eligible Accounts Receivable of such
Company multiplied by the Accounts Receivable Advance Percentage
and b) the Eligible Inventory of such Company multiplied by the
Inventory Advance Percentage over (ii) the sum of (x) the
outstanding aggregate amount of all Revolving Loans made to such
Company and (y) the outstanding stated amount of all Letters of
Credit issued for the account of such Company and all matured
unpaid reimbursement or repayment obligations of such Company to
the Issuer for payment of any draft drawn under such Letters of
Credit.
AVAILABILITY RESERVE means, as to all of the Companies
in the aggregate, at any date, $5,000,000 plus (i) such
additional amounts as the Agent, in the exercise of its sole
discretion exercised in a commercially reasonable manner, may
from time to time establish against the Availability either (A)
to preserve the value of, or the Agent's Lien on, the Collateral
or (B) to reserve the availability of cash sufficient to meet
certain future liabilities of the Companies, and (ii) such
additional amounts as may be added thereto pursuant to Section 7,
Paragraph 6(b)(ii) or Section 11, Paragraph 2 hereof.
BANK ACCOUNTS means all now owned and hereafter
acquired accounts maintained with any bank or financial
institutions.
BOARD means the Board of Governors of the Federal
Reserve System of the United States.
BUSINESS DAY means any day that the Agent is open for
business in New York, New York, which is not (i) a Saturday,
Sunday or legal holiday in the state of New York or (ii) a day on
which banking institution chartered by the state of New York or
the United States are legally required to close.
CANADIAN SUBSIDIARY means Trim Trends Canada Limited, a
corporation organized under the federal laws of Canada, but only
so long as such entity is a Subsidiary of a Company.
CAPITAL EXPENDITURES for any period means the aggregate
of all amounts (whether representing expenditures of or
Indebtedness incurred by the Companies) that are required to be
included in or reflected in the Consolidated Financial Statements
as additions to the property, plant or equipment or similar fixed
asset of the Companies.
CAPITAL LEASE means any lease of property (whether
real, personal or mixed) which, in conformity with GAAP, is
accounted for as a capital lease or a Capital Expenditure on the
balance sheet of the Companies.
CAPITAL LEASE OBLIGATIONS means, as to any person, the
capitalized amount of all obligations of such person or any of
its subsidiaries under Capital Leases, as determined on a
consolidated basis in conformity with GAAP.
THE CHASE MANHATTAN BANK RATE means the rate of
interest per annum announced by The Chase Manhattan Bank from
time to time as its prime rate in effect at its principal office
in the City of New York. (The prime rate is not intended to be
the lowest rate of interest charged by The Chase Manhattan Bank
to its borrowers.)
CLOSING DATE means the date on or after the date hereof
upon which the Agent on behalf of the Lenders makes the initial
extension of credit hereunder whether in the form of Revolving
Loans, Letters of Credit or the Term Loans.
CODE means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
COLLATERAL means all present and future Accounts,
Equipment, Inventory, Documents, General Intangibles, Bank
Accounts and Pledged Collateral of the Companies, or any of them.
COMMITMENT means, as to any Lender, the sum of (i) the
commitment of such Lender to make Revolving Loans to the
Companies under the Revolving Line of Credit and to participate
in the Letter of Credit Guaranty within the Revolving Line of
Credit and (ii) the principal amount of Term Loans owed to such
Lender.
CONSOLIDATED BALANCE SHEET means a consolidated balance
sheet for the Companies and the Subsidiaries of each Company
eliminating all inter-company transactions and prepared in
accordance with GAAP.
CONSOLIDATING BALANCE SHEET means a Consolidated
Balance Sheet for the Companies and the subsidiaries of each
Company showing all eliminations of inter-company transactions
and prepared in accordance with GAAP except that investments in
Subsidiaries are accounted for under the cost method, "push down"
accounting resulting from the 1992 reorganization and the 1995
acquisition of DJ Inc. is utilized in the elimination column and
corporate allocations are effected on an annual basis.
CONSOLIDATED FINANCIAL STATEMENTS means the
Consolidated Balance Sheet and the related consolidated
statements of profit and loss, cash flow and surplus of the
Companies and the Subsidiaries of each Company eliminating all
inter-company transactions and prepared in accordance with GAAP.
CONTAMINANT means any substance regulated or forming
the basis of liability under any Environmental Law, including,
without limitation, any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, or any constituent of any
such substance or waste.
CUSTOMARILY PERMITTED LIENS means: (i) Liens of local
or state authorities for franchise or other like taxes, provided
the aggregate amounts of such Liens shall not exceed $500,000 in
the aggregate for the Companies at any one time; (ii) statutory
Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other like Liens imposed by law,
created in the ordinary course of business and for amounts not
yet due (or which are being contested in good faith by
appropriate proceedings or other appropriate actions which are
sufficient to prevent imminent foreclosure of such Liens) and
with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; and
(iii) deposits made (and the Liens thereon) in the ordinary
course of business (including, without limitation, security
deposits for leases, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other
types of social security benefits or to secure the performance of
tenders, bids and contracts (other than for the repayment or
guarantee of borrowed money or purchase money obligations)
entered into in the ordinary course of business, statutory
obligations and other similar obligations arising as a result of
progress payments under government contracts.
DEFAULT means any event or condition which upon notice
or lapse of time or both would constitute an Event of Default.
DEFAULT RATE OF INTEREST means a rate of interest per
annum equal to the sum of: (i) two percent (2%) plus (ii) the
applicable contract rate of interest on the Revolving Loans and
Term Loans based upon the applicable increment over The Chase
Manhattan Bank Rate as determined under Section 8, Paragraph 1
hereof, which the Agent on behalf of the Lenders shall be
entitled to charge the Companies on the Obligations to the extent
provided in Section 10, Paragraph 2 hereof.
DEPOSITORY ACCOUNTS has the meaning specified in
Section 3, Paragraph 4 hereof.
DISBURSEMENT ACCOUNT has the meaning specified in
Section 3, Paragraph 6 hereof.
DOCUMENTARY LETTERS OF CREDIT means Letters of Credit
in support of trade obligations of the Companies incurred in the
ordinary course of business.
DOCUMENTS means all present and future documents (as
defined in the U.C.C.) including, without limitation, all
warehouse receipts, bills of lading, shipping documents, chattel
paper, instruments and similar documents, all whether negotiable
or not and all goods and Inventory relating thereto.
EARLY TERMINATION FEE means the fee in the amount of
3/4 of 1% of the Line of Credit which the Agent on behalf of the
Lenders is entitled to charge the Companies in the event the
Companies terminate the Line of Credit or this Financing
Agreement on a date prior to the first anniversary of the Closing
Date.
EBITDA means, in any period, the consolidated earnings
of the Companies (a) before all (i) interest and tax obligations,
(ii) depreciation, (iii) amortization for said period and (iv)
the non-cash portion of post retirement benefits and (b) before
any other non-cash charges other than relating to cost of sales
or selling, general and administrative expenses and (c) plus or
minus any losses or gains on the disposition of fixed assets out
of the ordinary course of business, all determined in accordance
with GAAP on a basis consistent with the latest audited
Consolidated Financial Statements.
ELIGIBLE ACCOUNTS RECEIVABLE means, as to any Company,
the gross amount of such Company's Trade Accounts Receivable that
are subject to a valid, first priority and fully perfected
security interest in favor of the Agent on behalf of the Lenders
and which conform to the warranties contained herein less,
without duplication, the sum of a) any returns, discounts,
claims, credits and allowances of any nature (whether issued,
owing, granted or outstanding) and b) reserves for: (i) sales to
the United States of America or to any agency, department or
division thereof unless the Agent shall have received an executed
assignment of claims form in respect thereof satisfactory to the
Agent; (ii) foreign sales other than sales (A) secured by
stand-by letters of credit (in form and substance satisfactory to
the Agent) issued or confirmed by, and payable at, banks having a
place of business in the United States of America and payable in
United States currency or (B) to customers residing in Canada
provided such sales otherwise comply with all of the other
criteria for eligibility hereunder, are payable in United States
currency and such sales do not exceed $5,000,000 in the aggregate
at any one time; (iii) Accounts that remain unpaid more than
ninety (90) days from invoice date; (iv) contras; (v) sales to
any Subsidiary or to any Person affiliated with the Companies in
any way; (vi) xxxx and hold (deferred shipment) or consignment
sales; (vii) sales to any customer which is (A) insolvent, (B)
the debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceeding under any
federal or state law, (C) negotiating, or has called a meeting of
its creditors for purposes of negotiating, a compromise of its
debts or (D) financially unacceptable to the Agent or has a
credit rating unacceptable to the Agent; (viii) all sales to any
customer if fifty percent (50%) or more of either (A) all
outstanding invoices or (B) the aggregate dollar amount of all
outstanding invoices, are unpaid more than ninety (90) days from
invoice date; (x) any other reason deemed appropriate by the
Agent in its reasonable business judgment and which is customary
either in the commercial finance industry or in the lending
practices of the Agent and/or the Lenders and relating to the
Agent's belief, in its sole discretion, that the collection of
any of such Trade Accounts Receivable is insecure or that any of
such Trade Accounts Receivable may not be paid in accordance with
its terms; and (xi) an amount representing, historically,
returns, discounts, claims, credits and allowances.
ELIGIBLE INVENTORY means, as to any Company, the gross
amount of such Company's Inventory that is subject to a valid,
first priority and fully perfected security interest in favor of
the Agent on behalf of the Lenders and which conform to the
warranties contained herein and which at all times continue to be
acceptable to the Agent in the exercise of its reasonable
business judgment less any supplies (other than raw materials),
goods not present in the United States of America, goods returned
or rejected by its customers other than goods that are undamaged
and resalable in the normal course of business, goods to be
returned to its suppliers, goods in transit to third parties
(other than its agents or warehouses), Inventory in possession of
a warehouseman, bailee or other third party unless such
warehouseman, bailee or third party has executed a notice of
security interest agreement (in form and substance satisfactory
to the Agent) and the Agent has taken all other action required
in its judgment to perfect its security interest in such
Inventory, and less any reserves required by the Agent in its
sole reasonable discretion for special order goods, market value
declines and xxxx and hold (deferred shipment) or consignment
sales or otherwise which are customary either in the commercial
finance industry or in the lending practices of the Agent and/or
the Lenders, based upon such credit and collateral considerations
as the Agent and/or the Lenders may deem appropriate; provided,
however, that for the purposes of determining Availability
hereunder, the outstanding principal amount of Revolving Loans to
any Company supported by Eligible Inventory cannot exceed
$20,000,000 at any time.
ELIGIBLE TOOLING RECEIVABLE means an Eligible Accounts
Receivable in respect of tooling and dies for a customer of a
Company, provided, however, that no Trade Accounts Receivable
shall be an Eligible Tooling Receivable until (i) the last and
final balance in respect of the completed item has been invoiced
by such Company and (ii) such item has been accepted by the
customer.
ENVIRONMENTAL ACTIONS means any complaint, summons,
citation, notice, directive, order, claim, litigation,
investigation, proceeding, judgment, letter or other
communication from any Governmental Authority or any third party
involving a Release (i) from or onto any of the properties
presently or formerly owned or leased by any of the Companies or
(ii) from or onto any facilities which received Hazardous
Materials from any of the Companies or involving any violation of
any Environmental Law.
ENVIRONMENTAL LAWS means all applicable federal, state
and local laws, statutes, ordinances and regulations, now or
hereafter in effect, and in each case as amended or supplemented
from time to time, and any judicial or administrative
interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment
relating to the regulation and protection of human health,
safety, the environment or natural resources (including, without
limitation, ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and
vegetation). Environmental Laws include but are not limited to
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. SECTION 9601 et seq.)
("CERCLA"); the Hazardous Material Transportation Act, as amended
(49 U.S.C. SECTION 180 et seq.); the Federal Insecticide, Fungicide,
and Rodenticide Act, as amended (7 U.S.C. SECTION 136 et seq.); the
Resource Conservation and Recovery Act, as amended (42 U.S.C.
SECTION 6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as
amended (15 U.S.C. SECTION 2601 et seq.); the Clean Air Act, as amended
(42 U.S.C. SECTION 7401 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. SECTION 1251 et seq.); the Occupational
Safety and Health Act, as amended (29 U.S.C. SECTION 651 et seq.); and
the Safe Drinking Water Act, as amended (42 U.S.C. SECTION 300f et
seq.), and their state and local counterparts or equivalents and
any transfer of ownership notification or approval statute,
including, without limitation, the New Jersey Industrial Site
Recovery Act (N.J. Stat. Xxx. SECTION 13:1K-6 et seq.) ("ISRA").
ENVIRONMENTAL LIABILITIES AND COSTS means, as to any
Person, all liabilities, obligations, responsibilities, Remedial
Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including, without
limitation, all fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest
incurred as a result of any claim or demand by any other person,
whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including, without
limitation, any thereof arising under any Environmental Law,
Permit, order or agreement with any Governmental Authority or
other person, and which relate to any environmental, health or
safety condition, or a Release or threatened Release, and result
from the past, present or future operations of, or ownership of
property by, such person or any of its Subsidiaries.
ENVIRONMENTAL LIEN means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
EQUIPMENT means all of a Company's present and
hereafter acquired equipment (as defined in the U.C.C.)
including, without limitation, all machinery, equipment,
furnishings and fixtures, and all additions, substitutions and
replacements thereof, wherever located, together with all
attachments, components, parts, equipment and accessories
installed thereon or affixed thereto, provided, however, that
Equipment shall not include Excluded Equipment.
ERISA means the Employee Retirement Income Security Act
or 1974, as amended from time to time and the rules and
regulations promulgated thereunder from time to time.
ERISA AFFILIATE means any trade or business (whether
or not incorporated) under common control or treated as a single
employer with any of the Companies within the meaning of Section
414 (b), (c), (m) or (o) of the Code.
ERISA EVENT means (i) a Reportable Event with respect
to a Title IV Plan or a Multiemployer Plan; (ii) the withdrawal
of any of the Companies or any ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (iii) the complete or partial withdrawal of any of the
Companies or any ERISA Affiliate from any Multiemployer Plan;
(iv) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA of a Title IV Plan; (v) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by
the PBGC; (vi) the failure to make any required contribution to a
Qualified Plan; or (vii) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee
to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of
ERISA.
ESNA means Harvard's Elastic Stop Nut Division
EVENT(S) OF DEFAULT has the meaning provided for in
Section 10, Paragraph 1 hereof.
EXCLUDED EQUIPMENT means Equipment and any Documents
and General Intangibles relating specifically to such Equipment
in existence on the Closing Date and listed on Schedule 1(i)
which is the subject to a Capital Lease among USL Capital
Corporation as lessor and any Company as lessee, which Capital
Lease by its terms prohibits the Agent and the Lenders from
taking a security interest in the Equipment financed by such
Capital Lease.
EXECUTIVE OFFICERS means any of the Chairman,
President, Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, Chief Accounting Officer, Vice
Presidents, Treasurer, Controller and Secretary of Harvard.
EXISTING LETTERS OF CREDIT means each letter of credit
that (a) was issued under the Existing Revolving Credit Agreement
for the account of any Company, (b) is outstanding on the Closing
Date and (c) is listed on Schedule 1(ii).
EXISTING LIENS means all Liens existing on the date
hereof which are listed on Schedule 1(iii).
EXISTING REVOLVING CREDIT AGREEMENT means the credit
agreement dated as of July 28, 1995 among the companies party
thereto as borrowers, The Chase Manhattan Bank as Administrative
Agent and Collateral Agent and the other lenders and the issuing
bank party thereto.
FEE LETTERS means the Agent Fee Letter and the Agent
Commitment Letter.
FISCAL QUARTER means each three (3) month period ending
on December 31, March 31, June 30, and September 30 of each year.
FISCAL YEAR means each twelve (12) month period
commencing on October 1 of each year and ending on the following
September 30.
GAAP means generally accepted accounting principles in
the United States of America as in effect from time to time and
for the period as to which such accounting principles are to
apply except that, for the purposes of Section 7 Paragraphs, 11,
12 and 13, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those
used in the preparation of the Consolidated Financial Statements
referred to in Section 7 Paragraph 2(g)(i).
GENERAL INTANGIBLES means all of a Company's "general
intangibles" as such term is defined in the U.C.C. and shall
include, without limitation, all present and future right, title
and interest in and to all trade names, Trademarks (together with
the goodwill associated therewith), Patents, licenses, customer
lists, distribution agreements, supply agreements and tax
refunds, together with all monies and claims for monies now or
hereafter due and payable in connection with any of the foregoing
or otherwise.
GOVERNMENTAL AUTHORITY means any nation or government,
any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
HARVARD NOTES means Harvard's 11 1/8% Senior Notes due
2005 and 12% Senior Notes due 2004.
HAZARDOUS MATERIALS shall mean (i) any element,
compound or chemical that is defined, listed or otherwise
classified as a solid waste, contaminant, pollutant, toxic
pollutant, hazardous substance, extremely hazardous substance,
toxic substance, hazardous waste, or special waste under any
Environmental Law; (ii) petroleum and its refined fractions;
(iii) any polychlorinated biphenyls; (iv) any flammable,
explosive or radioactive materials; and (v) any asbestos-
containing materials.
INDEBTEDNESS means, without duplication, all
liabilities, contingent or otherwise, which are any of the
following: (a) obligations in respect of money (borrowed or
otherwise and including, without limitation, reimbursement and
all similar obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured) or for
the deferred purchase price of property, services or assets,
other than Inventory, (excluding trade payables not more than 30
days overdue incurred in the ordinary course of business) or (b)
lease obligations which, in accordance with GAAP, have been or
which should be capitalized.
INTEREST RATE PROTECTION AGREEMENT means any interest
rate cap agreement, interest rate swap agreement or other
agreement or arrangement that is entered into by any Company in
order to protect such Company against fluctuations in interest
rates.
INVENTORY means all of a Company's present and
hereafter acquired inventory (as defined in the U.C.C.),
including, without limitation, all merchandise, inventory and
goods, and all additions, substitutions and replacements thereof,
wherever located, together with all goods and materials used or
usable in manufacturing, processing, packaging or shipping same;
in all stages of production from raw materials through
work-in-process to finished goods.
INVENTORY ADVANCE PERCENTAGE means (a) fifty percent
(50%) in the case of raw material and finished goods Inventory
and (b) twenty-five percent (25%) in the case of work-in-process
Inventory.
IRS means the Internal Revenue Service, or any
successor thereto.
ISSUING BANK means the bank issuing Letters of Credit
for the Companies.
LEASES means, with respect to the Companies, all of
those leasehold interests in real property owned by any of the
Companies, as lessee, as such may be amended, supplemented or
otherwise modified from time to time to the extent permitted by
the Financing Agreement.
LETTERS OF CREDIT means all letters of credit issued
with the assistance of the Agent on behalf of the Lenders by the
Issuing Bank for or on behalf of the Companies.
LETTER OF CREDIT GUARANTY means the guaranty delivered
by the Agent on behalf of the Lenders to the Issuing Bank of any
Company's reimbursement obligation under the Issuing Bank's
Reimbursement Agreement, Application for Letter of Credit or
other like document.
LETTER OF CREDIT GUARANTY FEE means the fee the Agent
on behalf of the Lenders may charge the Companies under Section
8, Paragraph 4 hereof for: (a) issuing the Letter of Credit
Guaranty or (b) otherwise aiding the Companies in obtaining
Letters of Credit.
LETTER OF CREDIT SUB-LINE means $25,000,000 in the
aggregate for the Companies; provided, however, that no more than
$3,000,000 of this Letter of Credit Sub-Line shall be available
for the issuance or guarantee of Documentary Letters of Credit.
LIBOR means at any time of determination, and subject
to availability, for each interest period the rate determined by
the Agent to be the applicable London Interbank Offered rate paid
in London on dollar deposits from other banks as (a) quoted by
The Chase Manhattan Bank or, if such quotation is not available,
the rate published under "Money Rates" in the New York City
edition of The Wall Street Journal or if there is no such
publication or statement therein as to Libor then in any
publication used in the New York City financial community or (b)
if no rate is available to the Agent using the sources in clause
(a) above, the rate determined by the Agent based upon
information presented on Telerate Systems at Page 3750 as of
11:00 a.m. (London Time).
LIBOR LOAN means each portion of the Revolving Loans
for which the Companies have elected to use Libor for interest
rate computations.
LIBOR PERIOD means the Libor for one month, two month,
three month or six month U.S. dollar deposits, as selected by the
Companies.
LIEN means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), security interest or preference, priority
or other security agreement or preferential arrangement of any
kind or nature whatsoever intended to assure payment of any
Indebtedness or other obligation, and includes, without
limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as
any of the foregoing, and the filing, under the U.C.C. or
comparable law of any jurisdiction, of any financing statement
naming the owner of the asset to which such Lien relates as
debtor.
LINE OF CREDIT means the commitment of the Lenders to
make Revolving Loans pursuant to Section 3 hereof, to make Term
Loans pursuant to Section 4 hereof and to assist the Companies in
opening Letters of Credit pursuant to Section 5 hereof, in the
aggregate amount equal to $120,000,000 for all of the Companies.
LOAN DOCUMENTS mean this Financing Agreement, the
Promissory Notes, the Fee Letters, and each agreement to which
any Company is or hereafter becomes a party evidencing, creating
or otherwise giving rise to Obligations or relating to the
Collateral in respect thereof.
LOAN FACILITY FEE means the fee payable to the Agent
for the benefit of the Lenders in accordance with, and pursuant
to, the provisions of Section 8, Paragraph 8 hereof.
MATERIAL ADVERSE CHANGE means a material adverse change
in any of (i) the condition (financial or otherwise), business,
performance, operations or properties of any of the Companies
taken as one enterprise, (ii) the legality, validity or
enforceability of any Loan Document, (iii) the perfection or
priority of the Liens granted pursuant to this Financing
Agreement, (iv) the ability of the Companies to repay the
Obligations or to perform their obligations under any of the Loan
Documents, or (v) the rights and remedies of the Lenders or the
Agent under the Loan Documents.
MATERIAL ADVERSE EFFECT means an effect that results in
or causes, or has a reasonable likelihood of resulting in or
causing, a Material Adverse Change.
MULTIEMPLOYER PLAN means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, and to which any of the
Companies or any ERISA Affiliate is making, is obligated to make,
has made or been obligated to make, contributions on behalf of
participants who are or were employed by any of them.
OBLIGATIONS shall mean all loans and advances made or
to be made by the Agent and/or the Lenders to the Companies or to
others for the Companies' account (including, without limitation,
all Revolving Loans, Term Loans and Letters of Credit) arising
under or in connection with this Financing Agreement; any and all
other indebtedness and obligations which may at any time be owing
by the Companies to the Agent and/or the Lenders arising under or
in connection with this Financing Agreement or any of the other
Loan Documents and, whether now in existence or incurred by the
Companies from time to time hereafter; whether secured by pledge,
Lien upon or security interest in any of the Companies' assets or
property or the assets or property of any other Person; whether
such indebtedness is absolute or contingent, joint or several,
matured or unmatured, direct or indirect and whether the
Companies are liable to the Agent and/or the Lenders for such
indebtedness as principal, surety, endorser, guarantor or
otherwise. Obligations include indebtedness or obligations owing
to the Agent and/or the Lenders by the Companies under this
Financing Agreement or any of the other Loan Documents or under
any other agreement or arrangement now or hereafter entered into
between the Companies and the Agent and/or the Lenders under or
in connection with this Financing Agreement or any of the other
Loan Documents; indebtedness or obligations incurred by, or
imposed on, the Agent and/or the Lenders as a result of
environmental claims (other than solely as a result of actions of
the Agent and/or the Lenders) arising out of any one or more of
the Companies' operations, premises or waste disposal practices
or sites; any Company's liability to the Agent and/or the Lenders
as maker or endorser on any promissory note or other instrument
for the payment of money; the Companies' liability to the Agent
and/or the Lenders under any instrument of guaranty or indemnity,
or arising under any guaranty, endorsement or undertaking which
the Agent and/or the Lenders may make or issue to others for any
Company's account, including any accommodation extended with
respect to applications for Letters of Credit, the Agent's (on
behalf of the Lenders) acceptance of drafts or the Agent's (on
behalf of the Lenders) endorsement of notes or other instruments
for any Company's account and benefit, in each case under or in
connection with this Financing Agreement or any of the other Loan
Documents.
OPERATING LEASES means all leases of property (whether
real, personal or mixed) other than Capital Leases.
OUT-OF-POCKET EXPENSES shall mean all of the Agent's
and/or the Lenders' present and future expenses incurred relative
to this Financing Agreement, whether incurred heretofore or
hereafter, which expenses shall include, without being limited
to, the cost of record searches, all costs and expenses incurred
by the Agent and/or the Lenders in opening bank accounts,
depositing checks, receiving and transferring funds, and any
charges imposed on the Agent and/or the Lenders due to
"insufficient funds" of deposited checks and the Agent's and/or
the Lenders' standard fee relating thereto, any amounts paid by
the Agent and/or the Lenders, incurred by or charged to the Agent
and/or Lenders by the Issuing Bank under any Letter of Credit
Guaranty or any Company's reimbursement agreement, application
for Letter of Credit or other like document which pertain either
directly or indirectly to such Letters of Credit, and the Agent's
and/or the Lenders' standard fees relating to the Letters of
Credit and any drafts thereunder, reasonable local counsel fees,
and fees and taxes relative to the filing of financing
statements.
PATENTS shall mean all present and hereafter acquired
patents and/or patent rights of the Companies.
PBGC means the Pension Benefit Guaranty Corporation, or
any successor thereto.
PENSION PLAN means an employee pension benefit plan,
as defined in Section 3(2) of ERISA (other than a Multiemployer
Plan), which is not an individual account plan, as defined in
Section 3(34) of ERISA, and which any of the Companies, if a
Title IV Plan, any ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who
are or were employed by any of them.
PERMIT means any permit, approval, authorization,
license, variance or permission required from a Governmental
Authority under an applicable Requirement of Law.
PERMITTED ENCUMBRANCES shall mean: (i) the Existing
Liens; (ii) any Lien created under the Loan Documents; (iii)
Permitted Purchase Money Liens; (iv) Liens of judgment creditors
provided such Liens do not exceed, in the aggregate for the
Companies, $2,500,000 (other than Liens bonded or insured to the
reasonable satisfaction of the Agent); (v) Liens on assets,
property or shares of stock of a Person at the time such Person
becomes a Subsidiary; provided, however, that (x) the Lien is not
created, incurred or assumed in contemplation of the acquisition
thereof by the relevant Company and (y) the Lien may not extend
to any other property owned by such Company or any Subsidiary;
(vi) Liens incurred in connection with Capital Lease Obligations;
and (vii) Customarily Permitted Liens.
PERMITTED INDEBTEDNESS shall mean: (i) current
Indebtedness maturing in less than one year and incurred in the
ordinary course of business for raw materials, supplies,
equipment, services, taxes or labor; (ii) the Indebtedness
secured by Permitted Purchase Money Liens; (iii) Capital Lease
Obligations; (iv) Indebtedness arising under the Letters of
Credit and this Financing Agreement; (v) deferred taxes and other
expenses incurred in the ordinary course of business; (vi)
Indebtedness created by the Harvard Notes and the guaranties
thereof; (vii) inter-company Indebtedness to the extent permitted
herein; (viii) Obligations of the Companies pursuant to Interest
Rate Protection Agreements entered into with the Agent's consent;
(ix) Indebtedness owed by the Canadian Subsidiary in an aggregate
amount outstanding at any time not exceeding $5,000,000; (x)
Indebtedness the net proceeds of which are used substantially
concurrently to refinance Indebtedness described in subparagraph
(v) above so long as (a) such refinancing Indebtedness is in an
aggregate principal amount not greater than the aggregate
principal amount of the Indebtedness being refinanced plus the
amount of any premiums required to be paid thereon and fees and
expenses associated therewith, (b) such Indebtedness has a later
final maturity and a longer weighted average life than the
Indebtedness being refinanced, (c) the interest rate applicable
to such Indebtedness shall be a market interest rate as of the
time of the incurrence thereof and (d) each of the covenants,
events of default and other provisions thereof (including any
guarantees thereof and if the Indebtedness being refinanced is
subordinated, the subordination provisions thereof) shall be no
less favorable to the Lenders than those contained in the
Indebtedness being refinanced; (xi) other Indebtedness existing
on the date of execution of this Financing Agreement and listed
in the most recent financial statement delivered to the Agent or
otherwise disclosed to the Agent in writing prior to the date
hereof; and (xii) to the extent that the Term Loans have been
prepaid in an amount which would permit such Indebtedness to be
incurred, unsecured Indebtedness in addition to that specified in
clauses (i) through (xi) above in an aggregate amount not to
exceed $5,000,000 at any time outstanding.
PERMITTED PURCHASE MONEY LIENS shall mean Liens on any
item of equipment acquired after the date of this Financing
Agreement, provided that (i) each such Lien shall attach only to
the property to be acquired, (ii) a description of the property
so acquired is furnished to the Agent, (iii) the Indebtedness
secured by such Lien shall not exceed at the time of issuance of
such Indebtedness the lesser of the cost or fair market value of
the equipment acquired thereby and (iv) the Indebtedness incurred
in connection with all such acquisitions shall not exceed in the
aggregate $30,000,000 at any time outstanding.
PERSON means an individual, partnership, corporation
(including, without limitation, a business trust), joint stock
company, trust, unincorporated association, joint venture or
other entity, or a Governmental Authority.
PIK PREFERRED STOCK means Harvard's 14 1/4% Pay-in-Kind
Exchangeable Preferred Stock, par value $.01 per share.
PLAN means an employee benefit plan, as defined in
Section 3(3) of ERISA, which any of the Companies maintains,
contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
PLEDGED COLLATERAL shall mean (i) all of the Pledged
Shares; (ii) all additional shares of stock or other securities
of any issuer of the Pledged Shares from time to time acquired by
any of the Companies in any manner of any Person who, after the
date of this Financing Agreement, becomes, as a result of any
occurrence, a Subsidiary of any of the Companies (any such shares
being "Additional Shares"); (iii) the certificates representing
the shares referred to in clauses (i) and (ii) above; and (iv)
all dividends, cash, instruments and other property or proceeds,
from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the foregoing to
the extent provided herein.
PLEDGED SHARES shall mean all of the shares of capital
stock of a Subsidiary (other than the Canadian Subsidiary and
000000 Xxxxxx Inc.) owned at the date hereof by any of the
Companies.
PROCEEDS means "proceeds," as such term is defined in
Section 9-306(1) of the U.C.C., and, in any event, shall include,
without limitation, (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Company from time
to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to any
Company from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any
Person acting under color of Governmental Authority), and (c) any
and all other amounts from time to time paid or payable under or
in connection with any of the Collateral.
PROMISSORY NOTES shall mean the notes, in the form of
Exhibits A and B attached hereto, delivered by the Companies to
the Agent to evidence the Revolving Loans and the Term Loans
pursuant to, and repayable in accordance with, the provisions of
Sections 3 and 4 hereof.
QUALIFIED PLAN means an employee pension benefit plan,
as defined in Section 3(2) of ERISA, which is intended to be
tax-qualified under Section 401(a) of the Code, and which any of
the Companies or any ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who
are or were employed by any of them.
RATABLE PORTION or RATABLY means, with respect to any
Lender, the quotient obtained by dividing the Commitment of such
Lender by the Commitments of all Lenders.
REAL ESTATE shall mean the Companies' fee and/or
leasehold interests in real property.
RELEASE means, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration, in each case of any
Hazardous Material, into the indoor or outdoor environment or
into or out of any property owned by such Person, including,
without limitation, the movement of Contaminants through or in
the air, soil, surface water, ground water or property.
REMEDIAL ACTION means all actions required to (i) clean
up, remove, treat or in any other way address Contaminants in the
indoor or outdoor environment, (ii) prevent the Release or threat
of Release or minimize the further Release of Contaminants so
they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
REQUIRED LENDERS means, at any time, Lenders holding
more than sixty-six and two-thirds percent (66 2/3%) of the sum
of (a) the then aggregate unpaid principal amount of the Term
Loans and (b) the Revolving Line of Credit or, if no Term Loans
or Revolving Loans are outstanding, Lenders holding more than
sixty-six and two-thirds percent (66 2/3%) of the Revolving Line
of Credit; provided, however, that if the Revolving Line of
Credit has been terminated, it means Lenders holding more than
sixty-six and two-thirds percent (66 2/3%) of the aggregate
amount of outstanding Term Loans and Revolving Loans.
REPORTABLE EVENT means any of the events described in
Sections 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
REQUIREMENT OF LAW means, as to any Person, the
certificate of incorporation and by-laws or other organizational
or governing documents of such person, and all federal, state and
local laws, rules and regulations, and all orders, judgments,
decrees or other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such person or any of
its property or to which such Person or any of its property is
subject.
REVOLVING LINE OF CREDIT means the commitment of the
Lenders to make Revolving Loans pursuant to Section 3 hereof in
an aggregate amount of up to $90,000,000.
REVOLVING LINE OF CREDIT FEE shall: (i) mean the fee
due the Agent for the benefit of the Lenders at the end of each
month for the Revolving Line of Credit, and (ii) be determined by
multiplying the difference between the Revolving Line of Credit
and the sum of (x) the average daily balance of Revolving Loans
of the Companies plus (y) the average daily balance of Letters of
Credit of the Companies for said month by the percentage per
annum set forth in the Fee Letter for the number of days in said
month.
REVOLVING LOAN PROMISSORY NOTE means the promissory
note in the form of Exhibit A hereto executed by the Companies to
evidence Revolving Loans made by the Agent on behalf of the
Lenders to the Companies pursuant to Section 3 hereof.
REVOLVING LOANS means the loans and advances made, from
time to time, to or for the account of the Companies by the Agent
on behalf of the Lenders pursuant to Section 3 hereof and any
advances deemed made from time to time pursuant to Section 4,
Paragraph 3 hereof.
REVOLVING LOAN ACCOUNT(S) shall have the meaning
specified in Section 3, Paragraph 6 hereof.
SETTLEMENT DATE shall mean the date, weekly and more
frequently, at the discretion of the Agent, upon the occurrence
of an Event of Default or a continuing decline or increase of the
Revolving Loans that the Agent and the Lenders shall settle
amongst themselves so that x) the Agent shall not have, as the
Agent, any money at risk and y) on such Settlement Date the
Lenders shall have a pro rata amount of all outstanding Revolving
Loans and Letters of Credit, provided that each Settlement Date
for a Lender shall be a Business Day on which such Lender and its
bank are open for business.
SUBSIDIARY means any corporation, association,
partnership or other business entity of which more than 50% of
the equity or more than 50% of the ordinary voting power or more
than 50% of other interests (including partnership interests) are
at the time owned or controlled, directly or directly, by any
Company or any Subsidiary of any Company.
TAX RETURN means, as to any of the Companies, all
federal, state, local and foreign tax returns, reports and
statements required to be filed by the Companies.
TAXES means all taxes, charges and other impositions
reflected therein or otherwise due and payable by any of the
Companies, including but not limited to all federal, state,
county, city, municipal, local, foreign or other taxes,
assessments, claims, charges, liens and levies, including
interest and penalties imposed thereon, upon their income,
profits, property, real, personal, tangible, intangible or mixed,
or any part thereof, or operations.
TERM LOAN PROMISSORY NOTE means the promissory note in
the form of Exhibit B hereto executed by the Companies to
evidence the Term Loans made by the Agent on behalf of the
Lenders under Section 4 hereof.
TERM LOANS means the term loans in the principal amount
of $30,000,000 made by the Agent on behalf of the Lenders
pursuant to, and repayable in accordance with, the provisions of
Section 4 hereof.
TERMINATION DATE means the date occurring three (3)
years from the Closing Date, as such date may be extended
pursuant to Section 11, Paragraph 1.
TITLE IV PLAN means any retirement plan subject to
Title IV of ERISA or Section 412 of the Code (other than a
Multiemployer Plan) to which any of the Companies or any ERISA
Affiliate has any liability (contingent or otherwise) with
respect to its former or active employees (or their
beneficiaries).
TRADE ACCOUNTS RECEIVABLE means that portion of
Accounts which arises from the sale of Inventory or the rendition
of services in the ordinary course of business.
TRADEMARKS means all present and hereafter acquired
trademarks and/or trademark rights (together with the goodwill
associated therewith) and all cash and non-cash proceeds thereof.
U.C.C. means the Uniform Commercial Code as in effect
from time to time in the State of New York.
UNFUNDED PENSION LIABILITY means, as to any of the
Companies at any time, the aggregate amount, if any, of the sum
of (i) the amount by which the present value of all accrued
benefits under each Title IV Plan of such Company, or any ERISA
Affiliate exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date
for each such Title IV Plan using the actuarial assumptions in
effect under such Title IV Plan, and (ii) for a period of five
years following a transaction reasonably likely to be covered by
Section 4069 of ERISA, the liabilities (whether or not accrued)
that could be avoided by [any of the Companies or any ERISA
Affiliate as a result of such transaction.
WELFARE BENEFIT PLAN means an employee welfare benefit
plan, as defined in Section 3(1) of ERISA, to which any of the
Companies maintains, contributes to, contributed to within the
six year period prior to the Closing Date, or has an obligation
to contribute to, on behalf of its former or active employees (or
their beneficiaries).
WITHDRAWAL LIABILITY means, as to any of the
Companies, at any time, the aggregate amount of the liabilities
of any of the Companies or any ERISA Affiliate pursuant to
Section 4201 of ERISA, and any increase in contributions required
to be made pursuant to Section 4243 of ERISA, with respect to all
Multiemployer Plans.
(b) References in this Financing Agreement refer to
this Financing Agreement as a whole, including the Exhibits and
Schedules hereto. As used in this Financing Agreement, the terms
"herein" and "hereof" refer to this Financing Agreement as a
whole and not to a particular Section, Paragraph or clause.
SECTION 2. CONDITIONS PRECEDENT
The obligation of the Agent and the Lenders to make
loans and other financial accommodations hereunder is subject to
the satisfaction of, or waiver of, immediately prior to or
concurrently with the initial making of such loans or financial
accommodations, the following conditions precedent:
(a) Lien Searches - The Agent shall have received tax,
judgment and Uniform Commercial Code searches satisfactory to the
Agent for all locations presently occupied or used by the
Companies.
(b) Casualty Insurance - The Companies shall have
delivered to the Agent evidence satisfactory to the Agent that
casualty insurance policies listing the Agent as loss payee are
in full force and effect, all as set forth in Section 7,
Paragraph 5 hereof.
(c) U.C.C. Filings - Any documents (including without
limitation, financing statements) required to be filed in order
to create, in favor of the Agent for the benefit of the Lenders,
a first and exclusive perfected security interest in the
Collateral with respect to which a security interest may be
perfected by a filing under the U.C.C. shall have been properly
filed in each office in each jurisdiction required in order to
create in favor of the Agent a perfected Lien on the Collateral.
The Agent shall have received acknowledgment copies of all such
filings (or, in lieu thereof, the Agent shall have received other
evidence satisfactory to the Agent that all such filings have
been made); and the Agent shall have received evidence that all
necessary filing fees and all taxes or other expenses related to
such filings have been paid in full.
(d) Opinions - Counsel for the Companies shall have
delivered to the Agent opinions satisfactory to the Agent, in
substantially the form of Exhibit E, and as to such other matters
as the Agent may reasonably request.
(e) Additional Documents - The Companies shall have
executed and delivered to the Agent all loan documents necessary
to consummate the lending arrangement contemplated between the
Companies and the Agent.
(f) Board Resolutions - The Agent shall have received
a copy of the resolutions of the Board of Directors of each of
the Companies authorizing the execution, delivery and performance
of (i) this Financing Agreement, (ii) the Promissory Notes, and
(iii) any related agreements, in each case certified by the
Secretary or Assistant Secretary of each of the Companies as of
the date hereof, together with a certificate of the Secretary or
Assistant Secretary of each of the Companies as to the incumbency
and signature of the officers of the Companies executing such
agreements and any certificate or other documents to be delivered
by them pursuant hereto, together with evidence of the incumbency
of such Secretary or Assistant Secretary.
(g) Corporate Organization - The Agent shall have
received (i) a copy of the Certificate of Incorporation of each
of the Companies certified by the Secretary of State of its
incorporation together with a good standing certificate as of a
recent date, and (ii) a copy of the By-Laws (as amended through
the date hereof) of each of the Companies certified by the
Secretary or Assistant Secretary thereof which certificate shall
state that there has been no amendment to the Certificate of
Incorporation since the date of the certified copy thereof.
(h) Officer's Certificate - The Agent shall have
received an executed Officer's Certificate of each of the
Companies, satisfactory in form and substance to the Agent,
executed by two Executive Officers, certifying that (i) the
representations and warranties contained herein are true and
correct in all material respects on and as of the date hereof,
(ii) each of the Companies is in compliance with all of the terms
and provisions set forth herein, and (iii) no Default or Event of
Default has occurred.
(i) Absence of Default - No Default, Event of Default
or, except as disclosed to the Agent in writing prior to the date
hereof, Material Adverse Change shall have occurred since June
30, 1996.
(j) Appraisals - The Agent shall have received
appraisals on the Companies' fixed assets which appraisals shall
be by an appraiser acceptable to the Agent and shall indicate an
auction sale value of at least $40,000,000.
(k) Legal Restraints/Litigation - At the date of
execution of this Financing Agreement, except as set forth on
Schedule 2(k) hereto, there shall be no (i) litigation,
investigation or proceeding (judicial or administrative) pending
or threatened against any of the Companies or its assets, by any
agency, division or department of any county, city, state or
federal government arising out of this Financing Agreement, (ii)
injunction, writ or restraining order restraining or prohibiting
the consummation of the financing arrangements contemplated under
this Financing Agreement or (iii) to the best knowledge of the
Companies, suit, action, investigation or proceeding (judicial or
administrative) pending or threatened against the Companies or
their assets, which if adversely determined would be reasonably
likely to have a Material Adverse Effect.
(l) Disbursement Authorization - The Companies shall
have delivered to the Agent all information necessary for the
Agent to issue wire transfer instructions on behalf of the
Companies for the initial and subsequent loans and/or advances to
be made under this Financing Agreement including, but not limited
to, disbursement authorizations in form acceptable to the Agent.
(m) Examination & Verification - The Agent shall have
completed to the satisfaction of the Agent an examination and
verification of the Accounts, Inventory and books and records of
the Companies.
(n) Opening Availability - After giving effect to all
loans, advances and extensions of credit to be made at closing,
the Companies shall have an opening aggregate Availability of
$20,000,000.
(o) Cash Budget Projections - The Agent shall have
received, reviewed and be satisfied with a 12-month cash budget
projection prepared by the Companies in the form provided by the
Agent.
(p) Collection Accounts - The Companies shall have
established a system of bank accounts with respect to the
collection of Accounts and the deposit of proceeds of Inventory
as shall be acceptable to the Agent in all respects.
(q) Existing Revolving Credit Agreement - The Existing
Revolving Credit Agreement shall be (i) terminated, (ii) all
loans and obligations of the Companies thereunder shall be paid
or satisfied in full utilizing the proceeds of the initial
Revolving Loans and the Term Loans to be made under this
Financing Agreement, (iii) all existing Letters of Credit issued
under the Existing Revolving Credit Agreement shall be replaced
or deemed reissued under this Financing Agreement, and (iv) all
Liens upon and security interest in favor of The Chase Manhattan
Bank as agent, in connection therewith shall be terminated and/or
released upon such payment.
(r) Environmental Compliance - The Agent shall be
satisfied as to (i) the amount and nature of any environmental
exposures and (ii) the Companies' compliance with all
Environmental Laws, except those such noncompliance would have no
Material Adverse Effect.
Upon the execution of this Financing Agreement and the initial
disbursement of loans hereunder, all of the above Conditions
Precedent shall have been deemed satisfied except as the Company
and the Agent shall otherwise agree herein or in a separate
writing.
SECTION 3. REVOLVING LOANS
1. Upon the Agent's receipt of an executed Revolving
Loan Promissory Note in the form of Exhibit A hereto from each of
the Companies, the Lenders agree, subject to the terms and
conditions of this Financing Agreement from time to time from the
Closing Date through the Termination Date, and within (a) the
Aggregate Net Availability and (y) the Revolving Line of Credit,
but subject to Lenders' rights to make "overadvances," to make
loans and advances to each of the Companies on a revolving basis
(i.e., subject to the limitations set forth herein, each Company
may borrow, repay and re-borrow Revolving Loans). Such loans and
advances shall be (a) in amounts up to $90,000,000 in the
aggregate and, (b) shall not exceed as to each Company (i) the
sum of (A) the aggregate outstanding Eligible Accounts Receivable
of such Company multiplied by the Accounts Receivable Advance
Percentage, plus (B) the value of Eligible Inventory of such
Company as determined at the lower of cost or market multiplied
by the Inventory Advance Percentage; provided, however, that
outstanding advances against Eligible Tooling Receivables shall
not exceed $5,000,000 in the aggregate at any one time. Each
request shall be delivered by each Company with respect to each
advance requested by it or by Harvard on behalf of itself or as
agent for the other Companies borrowing an advance and shall
constitute, unless otherwise disclosed in writing to the Agent
and the Lenders, a representation and warranty by the relevant
Company that (a) the representations and warranties contained in
this Financing Agreement are true and correct on and as of such
date as though made on and as of such date, (b) after giving
effect to the requested advance, no Default or Event of Default
has occurred and (c) such requested Revolving Loan, when added to
the aggregate Revolving Loans which are then outstanding or in
respect of which requests have been delivered to the Agent by the
Companies, is within the Revolving Line of Credit and
Availability. All requests for loans and advances must be
received by an officer of the Agent no later than 1:00 p.m., New
York time, of the day on which such loans and advances are
required. Should the Agent for any reason honor requests for
advances in excess of the limitations set forth herein, such
advances shall be considered "overadvances" and shall be made in
the Agent's sole discretion, subject to any additional terms the
Agent deems necessary. No Lender shall be required to advance
any amount in excess of such Lender's Ratable Portion of the
amount requested.
2. In furtherance of the continuing assignment and
security interest in the Companies' Accounts, each of the
Companies will, upon the creation of Accounts, execute and
deliver to the Agent in such form and manner as the Agent may
reasonably require, solely for the Agent's convenience in
maintaining records of collateral, such confirmatory schedules of
Accounts as the Agent may reasonably request, and such other
appropriate reports designating, identifying and describing the
Accounts as the Agent may reasonably require. In addition, upon
the Agent's request each of the Companies shall provide the Agent
with copies of agreements with, or purchase orders from, the
Companies' customers, and copies of invoices to customers, proof
of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the
Agent may reasonably require. Failure to provide the Agent with
any of the foregoing shall in no way affect, diminish, modify or
otherwise limit the security interests granted herein. The
Companies hereby authorize the Agent to regard a Company's
printed name or rubber stamp signature on assignment schedules or
invoices as the equivalent of a manual signature by such
Company's authorized officers or agents.
3. Each of the Companies hereby represents and
warrants with respect to itself and, in the case of Harvard, with
respect to itself and the other Companies that: each of its
Trade Accounts Receivable is based on an actual and bona fide
sale and delivery of goods or rendition of services to customers,
made by it in the ordinary course of its business; the goods and
Inventory being sold and the Trade Accounts Receivable thereby
created are its exclusive property and are not and shall not be
subject to any Lien, consignment arrangement, encumbrance,
security interest or financing statement whatsoever, other than
the Permitted Encumbrances; the invoices evidencing such Trade
Accounts Receivable are in its name; and its customers have
accepted the goods or services, owe and are obligated to pay the
full amounts stated in the invoices according to their terms,
without dispute, offset, defense, counterclaim or contra, except
for disputes and other matters arising in the ordinary course of
business with respect to which it has complied with the
notification requirements of Paragraph 5 of this Section 3. Each
of the Companies confirms to the Agent that any and all taxes or
fees relating to its business, its sales, the Accounts or goods
relating thereto, are its sole responsibility and that same will
be paid by it when due and that none of said taxes or fees
represent a Lien on or claim against the Accounts. Each of the
Companies also warrants and represents that it is a duly and
validly existing corporation and is qualified in all states where
the failure to so qualify would have an adverse effect on its
business or its ability to enforce collection of Accounts due
from customers residing in that state. Each of the Companies
agrees to maintain such books and records regarding Accounts as
the Agent may reasonably require, shall provide the Agent with
reports thereon as required by Section 7, Paragraph 8 hereof and
agrees that such books and records will reflect the Agent's
interest in the Accounts. All of the books and records of the
Companies will be available to the Agent at normal business
hours, including any records handled or maintained for the
Companies by any other company or entity.
4. Until the Agent has advised the Companies to the
contrary after the occurrence of an Event of Default (unless and
until such Event of Default is waived in writing by the Agent),
the Companies may and will enforce, collect and receive all
amounts owing on the Accounts for the Agent's and Lenders'
benefit and on their behalf, but at the Companies' expense; such
privilege shall terminate automatically upon the institution by
or against the Companies or any of them of any proceeding under
any bankruptcy or insolvency law or, at the election of the
Agent, upon the occurrence of any other Event of Default and
until such Event of Default is waived in writing by the Agent.
Any checks, cash, notes or other instruments or property received
by any of the Companies with respect to any Accounts shall be
held by it in trust for the Agent for the benefit of the Lenders,
separate from its own property and funds, and immediately turned
over to the Agent with proper assignments or endorsements by
deposit to the special depository accounts in the Agent's name
designated by the Agent for such purposes (collectively, the
"Depository Accounts"). All amounts received by the Agent in
payment of the Accounts will be credited to the appropriate
Company's Revolving Loan Account upon (i) the Agent's receipt of
"collected funds" at the Agent's bank account in New York, New
York on the Business Day of receipt if received no later than
1:00 pm and on the next succeeding Business Day if received after
1:00 pm and (ii) notification in writing from the Companies or
any of them (in form and substance satisfactory to the Agent)
stating which Companies' Revolving Loan Accounts should be
credited with such collected funds. No checks, drafts or other
instrument received by the Agent shall constitute final payment
to the Agent unless and until such instruments have actually been
collected.
5. Each of the Companies agrees to notify the Agent
promptly of any matters materially affecting the value,
enforceability or collectibility of any Account and of all
material customer disputes, offsets, defenses, counterclaims,
returns, rejections and all reclaimed or repossessed merchandise
or goods. Each of the Companies agrees to issue credit memoranda
promptly (with duplicates to the Agent upon request after the
occurrence of an Event of Default) upon accepting returns or
granting allowances, and may continue to do so until the Agent
has notified the Companies that an Event of Default has occurred
and that all future credits or allowances are to be made only
after the Agent's prior written approval.
6. The Agent shall maintain a separate account on its
books in each of the Companies' names (herein each a "Revolving
Loan Account" and collectively the "Revolving Loan Accounts") in
which the Companies will be charged with loans and advances made
by the Agent to them or for their account. Each of the Companies
will be credited with all amounts received by the Agent and/or
the Lenders from them or from others for their account,
including, as above set forth, all amounts received by the Agent
in payment of assigned Accounts and such amounts will be applied
to payment of the Obligations. In addition, the Agent may charge
the Company's Revolving Loan Account with any other Obligations,
including any and all costs, expenses and reasonable attorneys'
fees which the Agent may incur in connection with the exercise by
or for the Agent of any of the rights or powers herein conferred
upon the Agent, or in the prosecution or defense of any action or
proceeding to enforce or protect any rights of the Agent in
connection with this Financing Agreement or the Collateral
assigned hereunder, or any other Financing Agreement Obligations
owing to the Agent and the Lenders by the Companies. In no event
shall prior recourse to any Accounts or other security granted to
or by the Companies or any of them be a prerequisite to the
Agent's right to demand payment of any Obligation. Further, it
is understood that the Agent and/or the Lenders shall have no
obligation whatsoever to perform in any respect any of the
Companies' contracts or obligations relating to the Accounts.
7. After the end of each month, the Agent shall
promptly send the Companies a statement showing the accounting
for the charges, loans, advances and other transactions occurring
between the Agent and the Companies during that month. The
monthly statements shall be deemed correct and binding upon the
Companies and shall constitute an account stated between the
Companies and the Agent unless the Agent receives a written
statement of the exceptions within thirty (30) days of the date
of the monthly statement.
8. In the event that (a) the sum of (i) the
outstanding balance of Revolving Loans of any Company (including
any accrued but unpaid interest thereon and any fees and expenses
relating thereto) and (ii) outstanding balance of Letters of
Credit issued for the account of such Company (including all
matured reimbursement or repayment obligations with respect
thereto) exceeds, as to any Company, the maximum amount thereof
available to such Company under Sections 3 and 5 hereof or (b)
the aggregate amounts referred to in clause (a) above for all of
the Companies exceed the Line of Credit (herein the amount of any
such excess shall be referred to as the "Excess") such Excess
shall be due and payable to the Agent for the benefit of the
Lenders immediately upon the Agent's demand therefor.
9. The proceeds of the Revolving Loans shall be used
by each Company to refinance the Existing Revolving Credit
Agreement, to support the payment obligations of any of the
Companies for which the recipient Company is liable, for working
capital purposes and for other general corporate purposes.
SECTION 4. TERM LOANS
1. Each of the Companies hereby agrees to execute and
deliver to the Agent a Term Loan Promissory Note, in the form of
Exhibit B attached hereto, to evidence the Term Loans to be
extended by the Lenders. The Term Loans shall be made to the
Companies as follows:
NAME PRINCIPAL AMOUNT OF TERM LOAN
Harvard $ 445,104
Xxxxxxxx Xxxxxx 3,679,525
Xxxxxx Automotive 1,622,156
Xxxxx Albion 12,462,908
DJ Greeneville 1,701,286
DJ Pottstown 1,780,415
DJ Technologies 100,000
XX Xxxxxx 8,208,606
TOTAL: 30,000,000
2. Upon receipt of such Term Loan Promissory Note
from each of the Companies, the Lenders hereby agree to extend to
the Companies the Term Loans in the aggregate principal amount of
$30,000,000. No Lender shall be required to advance any amount
in excess of its Ratable Portion of the Term Loans requested.
3. In the event this Financing Agreement or the Line
of Credit is terminated by either the Lenders acting through the
Agent or the Companies for any reason whatsoever, the Term Loans
shall become due and payable on the effective date of such
termination notwithstanding any provision to the contrary in the
Promissory Notes or this Financing Agreement.
4. The Companies shall have no right to prepay the
Term Loans, in whole or in part, except as provided in Section 7,
Paragraph 6(b)(ii) and Section 11, Paragraph 2 hereof.
5. The proceeds of the Term Loans shall be used by
each Company to refinance the Existing Revolving Credit
Agreement.
SECTION 5. LETTERS OF CREDIT
In order to assist the Companies in establishing or
opening Letters of Credit with an Issuing Bank the Companies have
requested the Agent on behalf of the Lenders to join in the
applications for such Letters of Credit, and/or guarantee payment
or performance of such Letters of Credit or Existing Letters of
Credit and any drafts or acceptances thereunder through the
issuance of the Letters of Credit Guaranty, thereby lending the
Agent's and the Lenders' credit to the Companies and the Agent
and the Lenders have agreed to do so. These arrangements shall
be handled by the Agent subject to the terms and conditions set
forth below.
1. Within the Revolving Line of Credit and the
Aggregate Net Availability, the Agent and the Lenders shall
assist the Companies in obtaining Letter(s) of Credit or
replacing or guaranteeing the Existing Letters of Credit in an
amount not to exceed the Letter of Credit Sub-Line in the
aggregate outstanding at any one time. The Agent's and Lenders'
assistance for amounts in excess of the limitation set forth
herein shall at all times and in all respects be in the Agent's
sole discretion. It is understood that the form and purpose of
each Letter of Credit must be acceptable to the Agent in its
reasonable business judgment. Any and all outstanding Letters of
Credit shall be treated as a Revolving Loan for Availability
purpose. Notwithstanding anything herein to the contrary, upon
the occurrence of a Default and/or Event of Default, the Agent's
assistance in connection with the Letter of Credit Guaranty shall
be in the Agent's sole discretion unless such Default and/or
Event of Default is cured to the Agent's satisfaction or waived
by the Agent in writing.
2. The Agent shall have the right, without notice to
any of the Companies, to charge the Companies' Revolving Loan
Accounts on the Agent's books (without double-counting) with the
amount of any and all indebtedness, liability or obligation of
any kind incurred by the Agent under the Letters of Credit
Guaranty at the earlier of (a) payment by the Agent under the
Letters of Credit Guaranty or (b) the occurrence of an Event of
Default. Any amount charged to a Company's Revolving Loan
Account shall be deemed a Revolving Loan hereunder and shall
incur interest at the rate provided in Section 8, Paragraph 1
hereof.
3. In order to request the issuance of a Letter of
Credit (or to amend, renew, extend or guaranty an Existing Letter
of Credit), the Company shall deliver a notice to the Agent in
form and substance satisfactory to the Agent requesting the
issuance of a Letter of Credit or identifying the Letter of
Credit to be amended, renewed, extended or guaranteed. All of
the Existing Letters of Credit which are covered by the Letters
of Credit Guaranty shall be deemed issued pursuant to this
Financing Agreement. Each request shall be delivered by Harvard
as agent for each Company with respect to each Letter of Credit
requested by such Company or by Harvard on behalf of itself or as
agent for the other Companies requesting the issuance of a Letter
of Credit and shall constitute, unless otherwise disclosed in
writing to the Agent and the Lenders, a representation and
warranty by the relevant Company that (a) the representations and
warranties contained in this Financing Agreement are true and
correct on and as of such date as though made on and as of such
date, (b) after the issuance of the requested Letter of Credit,
no Default or Event of Default has occurred and (c) such
requested Letter of Credit, when added to the stated amount of
outstanding Letters of Credit, any matured reimbursement
obligations with respect to any Letters of Credit and the
requested amount of any Letters of Credit which have been
delivered to the Agent by the Companies, is within the Letter of
Credit Sub-Line and Availability. The accuracy of all the
matters referred to in the preceding sentence shall be a
condition precedent to the Agent's and the Lenders' obligations
to issue any Letter of Credit Guaranty.
4. Each of the Companies unconditionally indemnifies
the Agent and the Lenders and holds the Agent and the Lenders
harmless from any and all loss, claim or liability incurred by
the Agent and/or the Lenders arising from any transactions or
occurrences relating to Letters of Credit established or opened
for such Company's account, the collateral relating thereto and
any drafts or acceptances thereunder, and all Obligations
thereunder, including any such loss or claim due to any action
taken by any Issuing Bank, other than for any such loss, claim or
liability arising out of the gross negligence or willful
misconduct by the Agent and/or the Lenders under the Letters of
Credit Guaranty. Each of the Companies further agrees to hold
the Agent and the Lenders harmless from any error or omission,
negligence or misconduct by the Issuing Bank with respect
thereto. The Companies' unconditional obligation to the Agent
and the Lenders hereunder shall not be modified or diminished for
any reason or in any manner whatsoever, other than as a result of
the Agent's gross negligence or willful misconduct. Each of the
Companies agrees that any charges incurred by the Agent and/or
the Lenders for its account to the Issuing Bank shall be
conclusive on such Company and may be charged to its Revolving
Loan Account.
5. The Agent and/or the Lenders shall not be
responsible for: the existence, character, quality, quantity,
condition, packing, value or delivery of the goods purporting to
be represented by any documents; any difference or variation in
the character, quality, quantity, condition, packing, value or
delivery of the goods from that expressed in the documents; the
validity, sufficiency or genuineness of any documents or of any
endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, insufficient, fraudulent or
forged; the time, place, manner or order in which shipment is
made; partial or incomplete shipment, or failure or omission to
ship any or all of the goods referred to in the Letters of Credit
or documents; any deviation from instructions; delay, default, or
fraud by the shipper and/or anyone else in connection with the
Collateral or the shipping thereof; or any breach of contract
between the shipper or vendors and any of the Companies.
Furthermore, without being limited by the foregoing, the Agent
and/or the Lenders shall not be responsible for any act or
omission with respect to or in connection with any Collateral,
except for the Agent's and/or such Lender's gross negligence or
willful misconduct.
6. Each of the Companies agrees that any action taken
by the Agent and/or the Lenders, if taken in good faith, or any
action taken by any Issuing Bank, under or in connection with the
Letters of Credit, the guarantees, the drafts or acceptances, or
the Collateral, shall be binding on them and shall not put the
Agent and/or the Lenders in any resulting liability to the
Companies. In furtherance thereof, the Agent shall have the full
right and authority to clear and resolve any questions of
non-compliance of documents; to give any instructions as to
acceptance or rejection of any documents or goods; to execute any
and all steamship or airways guaranties (and applications
therefor), indemnities or delivery orders; to grant any
extensions of the maturity of, time of payment for, or time of
presentation of, any drafts, acceptances or documents; and to
agree to any amendments, renewals, extensions, modifications,
changes or cancellations of any of the terms or conditions of any
of the applications, Letters of Credit, drafts or acceptances,
all in the Agent's sole name, and the Issuing Bank shall be
entitled to comply with and honor any and all such documents or
instruments executed by or received solely from the Agent, all
without any consent from the Companies; provided, however, that
the Agent, in agreeing to any such amendments, renewals,
extensions, modifications, changes or cancellations, shall at all
times act reasonably and will notify the relevant Company thereof
as soon as reasonably practicable thereafter.
7. Without the Agent's express consent and
endorsement in writing, each of the Companies agrees: (a) not to
execute any and all applications for steamship or airway
guaranties, indemnities or delivery orders, or grant any
extensions of the maturity of, time of payment for, or time of
presentation of, any drafts, acceptances or documents or agree to
any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the
applications, Letters of Credit, drafts or acceptances; and (b)
after the occurrence of an Event of Default which is not waived
by the Agent, not to (i) clear and resolve any questions of
non-compliance of documents or (ii) give any instructions as to
acceptances or rejection of any documents or goods.
8. Each of the Companies agrees that any necessary
import, export or other licenses or certificates for the import
or handling of the Collateral will have been promptly procured;
all foreign and domestic governmental laws and regulations
applicable to the Companies in regard to the shipment and
importation of the Collateral, or the financing thereof, will
have been promptly and fully complied in all material respects;
and any certificates in that regard that the Agent may at any
time request will be promptly furnished. In this connection,
each of the Companies warrants and represents, to the best of its
knowledge and belief, that all shipments made under any such
Letters of Credit are in accordance with the laws and regulations
of the countries in which the shipments originate and terminate,
and are not prohibited by any such laws and regulations. The
Companies assume all risk, liability and responsibility for, and
agree to pay and discharge, all present and future local, state,
federal or foreign taxes, duties or levies. Any embargo,
restriction, laws, customs or regulations of any country, state,
city or other political subdivision, where the Collateral is or
may be located, or wherein payments are to be made, or wherein
drafts may be drawn, negotiated, accepted or paid, shall be
solely the Companies' risk, liability and responsibility.
9. Upon any payments made to the Issuing Bank under
the Letter of Credit Guaranty, the Agent for the benefit of the
Lenders shall acquire by subrogation, any rights, remedies,
duties or obligations granted or undertaken by any and all of the
Companies to the Issuing Bank in any application for Letters of
Credit, any standing agreement relating to Letters of Credit or
otherwise, all of which shall be deemed to have been granted to
the Agent and apply in all respects to the Agent for the benefit
of the Lenders and shall be in addition to any rights, remedies,
duties or obligations contained herein.
SECTION 6. COLLATERAL
1. As security for the prompt payment in full of all
Revolving Loans and Letters of Credit (including the Existing
Letters of Credit) made, deemed made and to be made to the
Companies from time to time by the Agent and/or the Lenders
pursuant hereto, as well as to secure the payment in full of the
other Obligations, including without limitation all amounts
payable with respect to the Term Loans and the guaranty provided
for in Section 12 hereof, each of the Companies hereby pledges
and grants to the Agent for the benefit of the Lenders a
continuing general Lien upon and security interest in all of its:
(a) present and hereafter acquired Inventory;
(b) present and future Accounts;
(c) present and future Documents;
(d) present and future General Intangibles (to
the extent necessary to realize upon Accounts
and Inventory); and
(e) present and future Bank Accounts;
together with all Proceeds of each of the foregoing and all
accessions to, substitutions and replacements for, and profits
and products of, each of the foregoing.
2. In addition, as security for the prompt payment in
full of the Term Loans by the Agent and/or the Lenders pursuant
hereto and the guaranty of the Term Loans provided for in Section
12 hereof each of the Companies hereby pledges and grants to the
Agent for the benefit of the Lenders a continuing general Lien
upon and security interest in all of its:
(a) present and hereafter acquired Equipment;
(b) all present and future Pledged Collateral;
(c) all present and future General Intangibles
not described in Section 6, Paragraph 1
above;
together with all Proceeds of each of the foregoing and all
accessions to, substitutions and replacements for, and profits
and products of, each of the foregoing.
3. Each of the Companies agrees to safeguard, protect
and hold all Inventory for the Agent's account and make no
disposition thereof except in the regular course of the business
of the Companies as herein provided. Until the Agent has given
the Companies notice to the contrary, as provided for below, any
Inventory may be sold and shipped by the Companies to their
customers in the ordinary course of their business, on open
account and on terms currently being extended by them to their
customers, provided that all proceeds of all sales (including
cash, accounts receivable, checks, notes, instruments for the
payment of money and similar proceeds) are forthwith transferred,
endorsed, and turned over and delivered to the Agent for the
benefit of the Lenders in accordance with Section 3, Paragraph 4
hereof. The Agent shall have the right to withdraw this
permission at any time upon the occurrence of any Event of
Default specified in Section 10 and until such time as such Event
of Default is waived in writing by the Agent, in which event no
further disposition shall be made of the Inventory by the
Companies without the Agent's prior written approval. Cash sales
or sales of inventory in which a Lien upon, or security interest
in, Inventory is retained by the Companies shall be made by the
Companies only with the approval of the Agent, and the proceeds
of such sales or sales of Inventory for cash shall not be
commingled with a Company's other property, but shall be
segregated, held by the Companies in trust for the Agent for the
benefit of the Lenders as the Agent's exclusive property, and
shall be delivered immediately by the Companies to the Agent in
the identical form received by the Companies by deposit to the
Depository Accounts. Upon the sale, exchange or other
disposition of Inventory, as herein provided, the security
interest in the Companies' Inventory provided for herein shall,
without break in continuity and without further formality or act,
continue in, and attach to, all proceeds, including any
instruments for the payment of money, accounts receivable,
contract rights, documents of title, shipping documents, chattel
paper and all other cash and non-cash proceeds of such sale,
exchange or disposition. As to any such sale, exchange or other
disposition, the Agent shall have all of the rights of an unpaid
seller, including stoppage in transit, replevin, rescission and
reclamation. Notwithstanding the foregoing, the Companies may
make cash sales of Inventory, provided that (a) the aggregate
amount thereof for the Companies during any Fiscal Year does not
exceed $1,000,000 and (b) the proceeds of such sales are turned
over to the Agent by deposit in the Depository Accounts.
4. Each of the Companies agrees at its own cost and
expense to keep the Equipment in as good and substantial repair
and condition as the same is now or at the time the Lien and
security interest granted herein shall attach thereto, reasonable
wear and tear excepted, making any and all repairs and
replacements when and where necessary. Each of the Companies
also agrees to safeguard, protect and hold all Equipment for the
Agent's account and make no disposition thereof unless it first
obtains the prior written approval of the Agent. Any sale,
exchange or other disposition of any Equipment shall only be made
by the Companies with the prior written approval of the Agent,
and the proceeds of any such sales shall not be commingled with
the Companies' other property, but shall be segregated, held by
the Companies in trust for the Agent for the benefit of the
Lenders as the Agent's exclusive property, and shall be delivered
immediately by the Companies to the Agent in the identical form
received by the Companies by deposit to the Depository Accounts.
Upon the sale, exchange or other disposition of the Equipment, as
herein provided, the security interest provided for herein shall,
without break in continuity and without further formality or act,
continue in, and attach to, all proceeds, including any
instruments for the payment of money, accounts receivable,
contract rights, documents of title, shipping documents, chattel
paper and all other cash and non-cash proceeds of such sales,
exchange or disposition. As to any such sale, exchange or other
disposition, the Agent shall have all of the rights of an unpaid
seller, including stoppage in transit, replevin, rescission and
reclamation. Notwithstanding anything hereinabove contained to
the contrary, the Companies may sell, exchange or otherwise
dispose of obsolete Equipment or Equipment no longer needed in
the Companies' operations; provided, however, that (a) the then
book value of the Equipment so disposed of does not exceed
$5,000,000 in the aggregate for the Companies in any Fiscal Year
and (b) the proceeds of such sales or dispositions are delivered
to the Agent in accordance with the foregoing provisions of this
Paragraph 6, except that the Companies may retain and use such
proceeds to purchase forthwith replacement Equipment which the
Companies determine in their reasonable business judgment to have
a collateral value at least equal to the Equipment so disposed of
or sold; provided, however, that the aforesaid right shall
automatically cease upon the occurrence of an Event of Default
which is not waived.
5. The rights and security interests granted to the
Agent for the benefit of the Lenders hereunder are to continue in
full force and effect, notwithstanding the termination of this
Financing Agreement or the fact that any account maintained in
any Company's name on the books of the Agent may from time to
time be temporarily in a credit position, until the final payment
in full to the Agent and the Lenders of all Obligations secured
thereby and the termination of this Financing Agreement, it being
understood that certain of the Collateral is security for some
but not all of the Obligations as expressly provided in Section
6. Any delay, or omission by the Agent and/or the Lenders to
exercise any right hereunder, shall not be deemed a waiver
thereof, or be deemed a waiver of any other right, unless such
waiver be in writing and signed by the Agent. A waiver on any
one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion.
6. To the extent that the Obligations are now or
hereafter secured by any assets or property other than the
Collateral or by the guarantee, endorsement, assets or property
of any other Person, or that certain of the Collateral is
security for some but not all of the Obligations, the Agent shall
have the right in its sole discretion to determine which rights,
security, Liens, security interests or remedies the Agent shall
at any time pursue, foreclose upon, relinquish, subordinate,
modify or take any other action with respect to, without in any
way modifying or affecting any of them, or any of the Agent's or
Lenders' rights hereunder.
7. Any reserves or balances to the credit of the
Companies and any other property or assets of the Companies in
the possession of the Agent and/or the Lenders may be held by the
Agent as security for the Obligations and applied in whole or
partial satisfaction of the Obligations when due. The Agent may
in its discretion charge any or all of the Financing Agreement
Obligations to one or more Revolving Loan Accounts of the
Companies when due.
8. In the enforcement of its rights hereunder the
Agent shall be entitled to liquidate any Collateral and apply the
proceeds thereof to any of the Obligations secured thereby, it
being understood that certain of the Collateral is security for
some but not all of the Obligations as expressly provided in
Section 6.
9. All certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Agent. The Agent
shall have the right, at any time in its discretion following the
occurrence of an Event of Default which is continuing and without
notice to the Companies, to transfer to or to register in its
name or in the name of any of its nominees any or all of the
Pledged Collateral. In addition, the Agent shall have the right
at any time to exchange certificates or instruments representing
or evidencing any of the Pledged Collateral for certificates or
instruments of smaller or larger denominations.
10. (a) Each of the Companies agrees that at any time
and from time to time, at the cost and expense of the Companies,
the Companies will promptly execute and deliver all further
instruments and documents, and take all further action, that may
be necessary or desirable, or that the Agent may request, in
order to perfect and protect the Lien granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its
rights and remedies hereunder with respect to the Pledged
Collateral.
(b) Each of the Companies agrees to defend the title
to the Pledged Collateral pledged by it and the Lien thereon of
the Agent against the claim of any other Person and to maintain
and preserve such Lien until indefeasible payment in full of all
of the Term Loans.
11. (a) As long as no Default or Event of Default
shall have occurred and be continuing (or, in the case of
subsection (a)(i) of this Paragraph 13, as long as no notice
thereof shall have been given by the Agent to the Companies):
(i) Each of the Companies shall be entitled to
exercise any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with the terms of this
Financing Agreement or any other loan document; provided,
however, that the Companies shall not exercise or shall
refrain from exercising any such right if, in the Agent's
judgment, such action would have a Material Adverse Effect
on the value of the Pledged Collateral or any part thereof
and provided, further, that the Companies shall give the
Agent at least five Business Days' written notice of the
manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right.
(ii) Each of the Companies shall be entitled to
receive and retain any and all dividends paid in respect of
the Pledged Collateral, other than any and all
(A) dividends paid or payable other than in cash
in respect of, and instruments and other property
received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares or
Additional Pledged Shares in connection with a partial
or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-
in-surplus, and
(C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged
Collateral,
all of which shall be forthwith delivered to the Agent to
hold as Pledged Collateral and shall, if received by the
Companies, be received in trust for the benefit of the
Agent, be segregated from the other property or funds of the
Companies, and be forthwith delivered to the Agent as
Pledged Collateral in the same form as so received (with any
necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to
be executed and delivered) to the Companies all such proxies
and other instruments as the Companies may reasonably
request for the purpose of enabling the Companies to
exercise the voting and other rights which they are entitled
to exercise pursuant to paragraph (i) above and to receive
the dividends which they are authorized to receive and
retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of
an Event of Default:
(i) Upon notice by the Agent to the Companies, all
rights of the Companies to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to subsection (a)(i) above shall cease,
and all such rights shall thereupon become vested in the
Agent who shall thereupon have the sole right to exercise
such voting and other consensual rights.
(ii) All rights of the Companies to receive the
dividends which they would otherwise be authorized to
receive and retain pursuant to subsection (a)(ii) above
shall cease, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right
to receive and hold as Pledged Collateral such dividends.
(iii) All dividends which are received by the
Companies contrary to the provisions of subsection (b)(ii)
above shall be received in trust for the benefit of the
Agent, shall be segregated from other funds of the Companies
and shall be forthwith paid over to the Agent as Pledged
Collateral in the same form as so received (with any
necessary indorsement).
(iv) The Companies shall, if necessary to permit the
Agent to exercise the voting and other rights which it may
be entitled to exercise pursuant to subsection (b)(i) and to
receive all dividends and distributions which it may be
entitled to receive under subsection (b)(ii) above, execute
and deliver to the Agent, from time to time and upon written
notice of the Agent, appropriate proxies, dividend payment
orders and other instruments as the Agent may reasonably
request. The foregoing shall not in any way limit the
Agent's power and authority granted pursuant to Section 10
hereof.
12. (a) Except as otherwise permitted hereby, each of
the Companies agrees that it will not (i) sell or otherwise
dispose of, or grant any option or warrant with respect to, any
of the Pledged Collateral, or (ii) create or permit to exist any
Lien upon or with respect to any of the Pledged Collateral,
except for the Lien created pursuant to this Financing Agreement.
(b) Each of the Companies agrees that it will (i)
cause each issuer of the Pledged Shares not to issue any shares
of stock or other securities in addition to or in substitution
for the Pledged Shares, except with the written consent of the
Agent to the Companies, (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all
Additional Shares, and (iii) promptly (and in any event within
three Business Days) deliver to the Agent a Pledge Amendment,
duly executed by the each of the Companies, in substantially the
form of Exhibit D (a "Pledge Amendment"), in respect of the
Additional Shares, together with all certificates or other
instruments representing or evidencing the same. Each of the
Companies hereby (i) authorizes the Agent to attach each Pledge
Amendment to this Financing Agreement, (ii) agrees that all
Additional Shares listed on any Pledge Amendment delivered to the
Agent shall for all purposes hereunder constitute Pledged Shares,
and (iii) is deemed to have made, upon such delivery, the
representations and warranties contained in this Financing
Agreement with respect to such Pledged Collateral.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS
1. Each of the Companies hereby warrants and
represents and/or covenants that: (a) the fair value of its
assets exceeds the book value of its liabilities; (b) it is
generally able to pay its debts as they become due and payable;
and (c) it does not have unreasonably small capital to carry on
its business as it is currently conducted absent extraordinary
and unforeseen circumstances. Each of the Companies further
warrants and represents that Schedule 7.1 hereto correctly and
completely sets forth its chief executive office and all of its
Collateral locations; and except for the Permitted Encumbrances,
the security interests granted herein constitute and shall at all
times constitute the first and only Liens on the Collateral;
that, except for the Permitted Encumbrances, the Companies are or
will be at the time additional Collateral is acquired by them,
the absolute owner of the Collateral with full right to pledge,
sell, consign, transfer and create a security interest therein,
free and clear of any and all claims or Liens in favor of others;
that the Companies will at their expense forever warrant and, at
the Agent's request, defend the same from any and all claims and
demands of any other Person other than the Permitted
Encumbrances; that the Companies will not grant, create or permit
to exist, any Lien upon or security interest in the Collateral,
or any proceeds thereof, in favor of any other Person other than
the holders of the Permitted Encumbrances; and that the Equipment
does not comprise a part of its Inventory and that the Equipment
is and will only be used by the Companies in their business and
will not be held for sale or lease, or removed from their
premises, or otherwise disposed of by the Companies without the
prior written approval of the Agent except as otherwise permitted
in Section 6, Paragraph 4 hereof.
2. Each of the Companies hereby further warrants and
represents as to itself and its Subsidiaries as follows:
(a) Organization, Good Standing, Etc. Each of the
Companies and each of the Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws
of the state of its organization, (ii) has all requisite power
and authority to conduct its business as now conducted and as
presently contemplated and to make the borrowings hereunder and
to consummate the transactions contemplated hereby, and (iii) is
in good standing and is duly qualified to do business in each
jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes
such qualification necessary, except for failures that in the
aggregate have no Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and
performance by each of the Companies of each Loan Document to
which it is a party, (i) have been duly authorized by all
necessary corporate action, (ii) do not and will not contravene
its charter or by-laws, any Requirement of Law or any contractual
restriction binding on or otherwise affecting it or any of its
properties or result in a default under any agreement or
instrument to which each of the Companies is a party or by which
they or their respective properties may be subject, (iii) do not
and will not result in or require the creation of any Lien (other
than pursuant to any Loan Document) upon or with respect to any
of its properties, and (iv) do not and will not result in any
suspension, revocation, impairment, forfeiture or nonrenewal of
any permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) Governmental Approvals. No authorization,
consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing
with, any Governmental Authority is or will be necessary in
connection with the execution and delivery by any of the
Companies of each loan document to which it is a party,
consummation of the transactions therein contemplated,
performance of or compliance with the terms and conditions
thereof or to ensure the legality, validity, enforceability and
admissibility in evidence thereof, except for the filings and
recordings in respect of the liens created pursuant to this
Financing Agreement and the other Loan Documents.
(d) Enforceability of Loan Documents. The Financing
Agreement is, and each other ancillary document in connection
herewith to which any of the Companies is or will be a party,
when delivered hereunder, will be, a legal, valid and binding
obligation of such Company, enforceable against such Company in
accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles
of equity (regardless of whether enforcement is sought in equity
or at law).
(e) Subsidiaries. Schedule 7.2(e) hereto is a
complete and correct description of the name, jurisdiction of
incorporation and ownership of the outstanding capital stock of
each Subsidiary of each of the Companies in existence on the
Closing Date. All shares of such stock owned by any of the
Companies, as indicated in such Schedule, are owned free and
clear of all Liens except Liens in favor of the Agent and the
Lenders.
(f) Litigation. Except as set forth on Schedule
7.2(f) hereto, there is no (i) litigation, investigation or
proceeding (judicial or administrative) pending or threatened
against any of the Companies or any Subsidiary or its respective
assets, by any agency, division or department of any county,
city, state or federal government arising out of this Financing
Agreement, (ii) injunction, writ or restraining order restraining
or prohibiting the consummation of the financing arrangements
contemplated under the Financing Agreement or (iii) to the best
knowledge of the Companies, suit, action, investigation or
proceeding (judicial or administrative) pending or threatened
against the Companies or any Subsidiary or their respective
assets, which, if adversely determined, would have a Material
Adverse Effect.
(g) Financial Condition. The Companies have heretofore
furnished to the Agent (i) Consolidated Financial Statements for
the fiscal year ended September 30, 1995, as examined and
reported on by Price Waterhouse LLP, independent certified public
accountants and (ii) unaudited Consolidated Financial Statements
contained in the quarterly report on Form 10-Q for the period
ended June 30, 1996 together with consolidating statements of
profit and loss, cash flow and surplus of the Companies and all
Subsidiaries of each relating to such period. Such financial
statements (including the notes thereto) present fairly, in all
material respects, the financial condition of the Companies as of
the end of the period to which such financial statements relate,
and the results of its operations and the cash flows for the
period then ended, as applicable, all in conformity with GAAP
applied on a basis consistent with that of the preceding Fiscal
Year except for a change in the valuation of Inventory from the
"LIFO" to the "FIFO" method of accounting. Except as disclosed
therein, the Companies do not have any material contingent
liabilities (including liabilities for taxes), unusual forward or
long term commitments or unrealized or anticipated losses from
unfavorable commitments.
(h) Compliance with Law, Etc. Each of the Companies
is not in violation of its charter or by-laws, any law (including
but not limited to violations pertaining to the conduct of its
business or the use, maintenance or operation of the real and
personal properties owned or possessed by it) or any material
term of any agreement or instrument binding on or otherwise
affecting it or any of its properties, except for the
noncompliance with any law, agreement or instrument which could
not, in the aggregate for all such instances of noncompliance,
have a Material Adverse Effect.
(i) ERISA.
(i) Schedule 7.2(i) separately identifies all
Qualified Plans, all Title IV Plans, all Multiemployer
Plans, all unfunded Pension Plans and all Welfare Benefit
Plans that provide retiree benefits (other than continuation
coverage provided pursuant to Section 4980B of the Code).
(ii) Each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the Code, and the trusts
created thereunder have been determined to be exempt from
tax under the provisions of Section 501 of the Code, and to
the best knowledge of the Companies nothing has occurred
which would cause the loss of such qualification or tax-
exempt status.
(iii) Except as set forth on Schedule 7.2(i), each
Plan is in compliance in all material respects with
applicable provisions of ERISA and the Code, including,
without limitation, the filing of reports required under
ERISA or the Code which are true and correct in all material
respects as of the date filed, and with respect to each
Plan, other than a Qualified Plan, all required
contributions and benefits have been paid in accordance with
the provisions of each such Plan.
(iv) None of the Companies or any ERISA Affiliate,
with respect to any Qualified Plan, has failed to make any
contribution or pay any amount due as required by Section
412 of the Code or Section 302 of ERISA or the terms of any
such Qualified Plan.
(v) With respect to all Welfare Benefit Plans, the
present value of future anticipated expenses for retiree
benefits pursuant to the latest actuarial projections of
liabilities does not exceed $105,000,000, and copies of such
latest projections have been made available to the Lenders.
(vi) With respect to Pension Plans, other than
Qualified Plans, the present value of the liabilities for
current participants thereunder using PBGC interest
assumptions does not exceed $1,500,000. The Unfunded Pension
Liability, in the aggregate, for all Title IV Plans does not
exceed the amount reflected in the Companies' financial
statements delivered to the Agent and the Lenders.
(vii) Except as set forth on Schedule 7.2(i), there
has been no, nor is there reasonably expected to occur, any
ERISA Event or event described in Section 4068 of ERISA with
respect to any Title IV Plan.
(viii) Except as set forth on Schedule 7.2(i), there
are no pending or, to the knowledge of the Companies,
threatened claims, actions or lawsuits (other than claims
for benefits in the normal course), asserted or instituted
against (i) any Plan or any Qualified Plan or the assets of
any such Plan, (ii) any fiduciary with respect to any Plan
or Qualified Plan or (iii) the Companies with respect to any
Plan or Qualified Plan.
(ix) None of the Companies or any ERISA Affiliate has
incurred or has any reasonable likelihood of incurring any
Withdrawal Liability under Section 4201 of ERISA as a result
of a complete or partial withdrawal from a Multiemployer
Plan (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in any such
liability).
(x) Within the last five years none of the Companies
or any ERISA Affiliate has engaged in a transaction which
resulted in a Title IV Plan with Unfunded Pension
Liabilities being transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA)
of any such entity.
(xi) Except as set forth on Schedule 7.2(i), no
Welfare Benefit Plan provides for continuing benefits or
coverage for any participant or any beneficiary of a
participant after such participant's termination of
employment (except as may be required by Section 4980B of
the Code and at the sole expense of the participant or the
beneficiary of the participant) which would result in a
liability in an amount which would have a Material Adverse
Effect. Each Company and each ERISA Affiliate has complied
with the notice and continuation coverage requirements of
Section 4980B of the Code and the regulations thereunder,
except for non-compliances which in the aggregate would have
no Material Adverse Effect.
(xii) None of the Companies has engaged in a
prohibited transaction, as defined in Section 4975 of the
Code or Section 406 of ERISA, in connection with any Plan,
which would subject or has any reasonable likelihood of
subjecting the Companies (after giving effect to any
exemption) to a material tax on prohibited transactions
imposed by Section 4975 of the Code or any other material
liability.
(xiii) No liability under any Plan or Qualified Plan
(whether terminated or on-going) has been funded or
satisfied through the purchase of a contract from an
insurance company that is not rated AA or better by Standard
& Poor's Corporation or any equivalent or higher rating by
another nationally recognized rating agency.
(xiv) None of the Companies and no ERISA Affiliate has
any liability under any terminated "employee benefit plan",
as defined in Section 3(3) of ERISA, of any related or
unrelated entity.
(xv) The present value of the liability, if any, with
respect to all unfunded Pension Plans of the Companies is
reflected on the most recent audited financial statements
delivered to the Lenders pursuant to this Agreement.
(j) Taxes, Etc. All tax returns required to be filed
by any of the Companies have been properly prepared, executed and
filed in all jurisdictions in which such tax returns are required
to be filed on the due date therefor. All taxes, assessments,
fees and other governmental charges upon the Companies or upon
any of their respective properties, income, sales or franchises
which are shown thereon as due and payable have been paid. The
reserves and provisions for taxes, if any, on the books of the
Companies are adequate for all open years and for its current
fiscal period. None of the Companies know of any proposed
additional assessment or basis for any material assessment for
additional taxes (whether or not reserved against). The federal
income tax liabilities of the Companies have been finally
determined by the IRS, or the time for audit has expired, for all
fiscal periods ended on or prior to September 30, 1992 all such
liabilities (including all deficiencies assessed following audit)
have been satisfied.
(k) Regulations G, T, U or X. The Companies are not
and will not be engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T, U or X issued by the Board), and no
proceeds of any loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing
or carrying any margin stock.
(l) Nature of Business. The Companies are not engaged
in any business other than as described in Harvard's Prospectus,
dated October 23, 1995, relating Harvard's 11 1/8% Senior Notes
2005.
(m) Adverse Agreements, Etc. None of the Companies is
a party to any agreement or instrument, or subject to any charter
or other corporate restriction or any judgment, order,
regulation, ruling or other requirement of a court or other
Governmental Authority or regulatory body, which has a Material
Adverse Effect.
(n) Holding Company and Investment Company Acts. None
of the Companies is a (i) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) an "investment company"
or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
(o) Permits, Etc. The Companies have all material
permits, material licenses, authorizations and material approvals
required for them lawfully to own and operate their business.
(p) Priority; Title. The liens granted under this
Financing Agreement constitute and shall at all times constitute
perfected, first priority liens on the Collateral, which are
subject to no other liens other than Permitted Encumbrances, and
the Companies are the sole and absolute owners of the Collateral
with full right to pledge, sell, consign, transfer and create
liens therein. No person has any right of first refusal, option
or other preferential right to purchase any Collateral. The
Companies will at their expense forever warrant and, at the
Agent's request, defend the same from any and all claims and
demands of any other person other than the Permitted
Encumbrances. The Companies will not grant, create or permit to
exist, any lien upon the Collateral, or any proceeds thereof, in
favor or any other person other than Permitted Encumbrances. The
Companies have good and marketable title or a valid leasehold
interest in all of their properties and assets, free and clear of
all liens except Permitted Encumbrances.
(q) Full Disclosure. No representation or warranty
made by the Companies this Financing Agreement or any other Loan
Document is inaccurate or misleading in any material respect and
no loan document or schedule or exhibit thereto and no
certificate, report, statement or other document or information
furnished to the Agent or the Lenders in connection herewith or
therewith or with the consummation of the transactions
contemplated hereby and thereby, contains any material
misstatement of fact or omits to state a material fact or any
fact necessary to make the statements contained herein or therein
not misleading. To the extent the Companies furnish any
projections of the financial position and results of operations
of the Companies for, or as at the end of, certain future
periods, such projections were believed at the time furnished to
be reasonable, have been or will have been prepared on a
reasonable basis and in good faith by the Companies, and have
been or will be based on assumptions believed by the Companies to
be reasonable at the time made and upon the best information then
reasonably available to the Companies. There is no fact
materially adversely affecting the condition or operations,
financial or otherwise, or the business or prospects of any of
the Companies which has not been set forth in a footnote included
in the financial statements referred to in Section 7, Paragraph
2(g) hereof, in a Schedule hereto or in any other written
information delivered to the Agent prior to the Closing Date.
(r) Environmental Matters. Except as disclosed in
Schedule 7.2(r), (i) none of the operations of the Companies are
the subject of any federal, state or local investigation to
determine whether any Remedial Action is needed to address the
presence, disposal, Release or threatened Release, (ii) to the
best of the Company's knowledge, information and belief, the
Companies do not have any contingent liability in connection with
any Release, which could reasonably be expected to result in
material Environmental Costs and Liabilities, (iii) the
operations of the Companies are in compliance in all material
respects with all Environmental Laws; (iv) there has been no
Release at any of the properties owned or operated by the
Companies or, to the best of the Company's knowledge, information
and belief, any predecessor in interest or title, or to the best
of the Company's knowledge, information and belief and except as
disclosed in writing to the Agent, at any disposal or treatment
facility which received Hazardous Materials generated by the
Companies or, to the best of the Company's knowledge, information
and belief, any predecessor in interest or title, which is
reasonably likely to result in the Companies' incurring material
Environmental Liabilities and Costs; (v) no Environmental Actions
are pending or, to the best of the Company's knowledge,
information and belief, threatened against the Companies or, to
the best of the Company's knowledge, information and belief, any
predecessor in interest or title which, if adversely determined,
could reasonably be expected to result in the Companies incurring
material Environmental Liabilities and Costs; (vi) the Companies
have obtained all permits, approvals, authorizations and licenses
required by Environmental Laws necessary for their operations,
and all such permits, approvals, authorizations and licenses are
in effect and the Companies are in compliance with all terms and
conditions of such permits, approvals, authorizations and
licenses except where failure to obtain or comply could not
result in material Environmental Liabilities and Costs; and (vii)
to the best of the Company's knowledge, information and belief,
and except as disclosed in writing to the Agent, no Environmental
Actions have been asserted against any facilities that may have
received Hazardous Materials generated by the Companies or any
predecessor in interest or title which, if adversely determined,
is reasonably likely to result in material Environmental
Liabilities and Costs to the Companies.
(s) Schedules. All of the information which is
required to be scheduled to this Agreement is set forth on the
Schedules attached hereto, is correct and accurate and does not
omit to state any information material thereto.
(t) Insurance. The Companies keep their properties
adequately insured and maintain (i) insurance to such extent and
against such risks, including fire, as is customary with
companies in the same or similar businesses, (ii) workmen's
compensation insurance in the amount required by applicable law,
(iii) public liability insurance in the amount customary with
companies in the same or similar business against claims for
personal injury or death on properties owned, occupied or
controlled by it, and (iv) such other insurance as may be
required by law or by the loan documents. Schedule 7.2(u) hereto
sets forth a list of all insurance maintained by the Companies on
the Closing Date.
(u) Use of Proceeds. The proceeds of the initial
Revolving Loans and the Term Loans shall be used to repay
Indebtedness under the Existing Revolving Credit Agreement and to
pay all fees and expenses incurred or in connection with this
Financing Agreement.
(v) Financial Accounting Practices, Etc.
(i) The Companies make and keep books, records
and accounts which, in reasonable detail, accurately and fairly
reflect their respective transactions and dispositions of their
respective assets and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general
or specific authorization, and (ii) transactions are recorded as
necessary (A) to permit preparation of financial statements in
conformity with GAAP except as previously disclosed to the Agent
and (B) to maintain accountability for assets.
(ii) The Companies maintain a system of internal
procedures and controls sufficient to provide reasonable
assurance that the information required to be set forth in each
request made by a Company pursuant to Section 3, Paragraph 1
hereof (including, without limitation, information relating to
the identification of assets which are Inventory and the
valuation thereof) is accurate.
(w) No Material Adverse Effect. Since June 30, 1996,
there has not occurred any Material Adverse Change or any event
which could have a Material Adverse Effect.
(x) Real Property; Leases.
(i) As of the Closing Date, the Companies have
valid leasehold interests in the Leases described in Schedule
7.2(x) hereto. None of the Leases is subject to any Lien except
Liens granted to the Agent pursuant to this Financing Agreement
and Permitted Encumbrances. Schedule 7.2(x) hereto sets forth
with respect to each Lease, the commencement date, termination
date, renewal options (if any) and annual base rents. Each such
Lease is valid and enforceable in accordance with its terms in
all material respects and is in full force and effect. Except as
set forth on Schedule 7.2(y) hereto, no consent or approval of
any landlord or other third party in connection with the Leases
is necessary for any of its Companies to enter into and execute
the loan documents. None of the Companies or, to the knowledge
of any of the Companies, any other party to any Lease is in
default of its obligations thereunder and neither the Companies
nor any other party to any such Lease has at any time delivered
or received any notice of default which remains uncured under any
such Lease and, as of the Closing Date, no event has occurred
which, with the giving of notice or the passage of time, or both,
would constitute a default under any such Lease, except for
defaults the consequence of which in the aggregate would have no
Material Adverse Effect.
(ii) All permits required to have been issued to
the Companies with respect to the real property owned or leased
by any of the Companies to enable such property to be lawfully
occupied and used for all of the purposes for which it is
currently occupied and used (separate and apart from any other
properties), have been lawfully issued and are in full force and
effect, other than such permits which, if not obtained, would not
have a Material Adverse Effect, and all such real property
complies in all material respects with all applicable legal and
insurance requirements.
(iii) None of the Companies has received any
notice, nor has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any real property
owned or leased by any Company.
(iv) No portion of any real property owned or
leased by any of the Companies has suffered any damage by fire or
other casualty loss which has not heretofore been completely
repaired and restored to its condition existing prior to such
casualty or which if not repaired or restored is not reasonably
likely to result in a Material Adverse Effect. Except as
disclosed to the Agent in writing, no portion of any of the real
property owned or leased by any of the Companies is located in a
special flood hazard area as designated by any Governmental
Authority.
(y) Location of Bank Accounts. Schedule 7.2(y) hereto
sets forth a complete and accurate list as of the Closing Date of
all deposit and other accounts, maintained by the Companies
together with a description thereof (i.e. the bank at which such
deposit or other account is maintained and the account number and
the purpose thereof).
(aa) No Event of Default. No event has occurred and
is continuing and no condition exists which constitutes an Event
of Default..
(bb) Capital Leases. As of the Closing Date, Capital
Lease Obligations of the Companies do not exceed $25,000,000 in
the aggregate.
(cc) Labor Relations; Collective Bargaining
Agreements. (i) Set forth on Schedule 7.2(cc) hereto is a list
(including dates of termination) of all Collective Bargaining
Agreements between or applicable to the Companies and any union,
labor organization or other bargaining agent in respect of the
employees of any of the Companies.
(ii) None of the Companies is engaged in any
unfair labor practice that is reasonably likely to have a
Material Adverse Effect. There is (i) no significant unfair
labor practice complaint pending against any of the Companies or,
to the best knowledge of any of the Companies, threatened against
any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding
arising out of or under any Collective Bargaining Agreement is
now pending against any of the Companies or, to the best
knowledge of any of the Companies, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or
stoppage is pending against any of Companies or, to the best
knowledge of any of the Companies, threatened against any of
Companies, and (iii) to the best knowledge of any of Companies,
no union representation question existing with respect to the
employees of any of Companies, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as would have no Material Adverse
Effect.
(dd) Intellectual Property. The Companies own or
license or otherwise have the right to use all material licenses,
permits, Patents, Patent applications, Trademarks, Trademark
applications, service marks, trade names, copyrights, copyright
applications, franchises, authorizations and other intellectual
property rights (including, without limitation, all Intellectual
Property as defined in the Intellectual Property Security
Agreement) that are necessary for the operations of their
respective businesses, without infringement upon or conflict with
the rights of any other Person with respect thereto, including,
without limitation, all trade names associated with any private
label brands of any of the Companies. To the best knowledge of
the Companies, no slogan or other advertising device, product,
process, method, substance, part or component, or other material
now employed, or now contemplated to be employed, by the
Companies or any of their respective subsidiaries infringes upon
or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or
threatened. No Patent, invention, device, application, principle
and no statute, law, rule, regulation, standard or code is
pending or, to the knowledge of the Companies, proposed, other
than those the consequences of which in the aggregate have no
Material Adverse Effect.
3. The Companies agree to maintain books and records
pertaining to the Collateral in such detail, form and scope as
the Agent shall reasonably require. The Companies agree that the
Agent or its agents may enter upon any of the Companies' premises
at any time during normal business hours, and from time to time,
for the purpose of inspecting the Collateral, and any and all
records pertaining thereto. The Companies agree to afford the
Agent prior written notice of any change in the location of any
Collateral, other than shipments of Inventory in the ordinary
course of business to locations that, as of the date hereof, are
known to the Agent and at which the Agent has filed financing
statements and otherwise fully perfected its Liens thereon. Each
of the Companies agrees to advise the Agent promptly, in
sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or on the security
interests granted to the Agent therein.
4. Each of the Companies agrees to: execute and
deliver to the Agent, from time to time, solely for the Agent's
convenience in maintaining a record of the Collateral, such
written statements and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral
pledged to the Agent hereunder. The Companies' failure, however,
to promptly give the Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Agent's security
interests in the Collateral.
5. Each of the Companies agrees to comply with the
requirements of all state and federal laws in order to grant to
the Agent valid and perfected first security interests in the
Collateral. To the extent permitted by law, the Agent is hereby
authorized by each of the Companies to file any financing
statements covering the Collateral whether or not such Company's
signature appears thereon. Each of the Companies agrees to do
whatever the Agent may reasonably request, from time to time, by
way of: filing notices of Liens, financing statements,
amendments, renewals and continuations thereof; cooperating with
the Agent's custodians; keeping stock records; transferring
proceeds of Collateral to the Agent's possession following an
Event of Default; and performing such further acts as the Agent
may reasonably require in order to effect the purposes of this
Financing Agreement.
6. (a) Each of the Companies agrees to maintain
insurance on the Real Estate, Equipment and Inventory under such
policies of insurance, with such insurance companies, in such
reasonable amounts and covering such insurable risks as are at
all times reasonably satisfactory to the Agent. All policies
covering the Equipment and Inventory are, subject to the rights
of any holders of Permitted Encumbrances holding claims senior to
the Agent, to be made payable to the Agent for the benefit of the
Lenders, in case of loss, under a standard non-contributory
"lender" or "secured party" clause and are to contain such other
provisions as the Agent may require to fully protect the Agent's
interest in the Inventory and Equipment and to any payments to be
made under such policies. All original policies or true copies
thereof are to be delivered to the Agent, premium prepaid, with
the loss payable endorsement in the Agent's favor, and shall
provide for not less than thirty (30) days' prior written notice
to the Agent of the exercise of any right of cancellation. At
the Companies' request, or if the Companies fail to maintain such
insurance, the Agent may arrange for such insurance, but at the
Companies' expense and without any responsibility on the Agent's
part for: obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of
claims. Upon the occurrence of an Event of Default which is not
waived the Agent shall, subject to the rights of any holders of
Permitted Encumbrances holding claims senior to the Agent, have
the sole right, in the name of the Agent or the Companies or any
of them, to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may
be necessary to effect the collection, compromise or settlement
of any claims under any such insurance policies.
(b)(i) In the event of any loss or damage by fire or
other casualty, the Companies shall prepay the Revolving
Loans in an amount equal to all insurance proceeds relating
to Inventory received and, if there are no Revolving Loans
outstanding and the Agent so determines, the Term Loans; and
(ii) in the event any part of a Company's fixed assets
is damaged by fire or other casualty, the Companies shall
apply all insurance proceeds received on account of such
damage or other casualty (the "Insurance Proceeds") as
follows:
(x) if the auction sale value of
remaining fixed assets (the "ASV") is greater
than $55,000,000, towards the repayment of
the Revolving Loans and, if there are no
Revolving Loans outstanding and the Agent so
reasonably determines at its sole option,
towards the prepayment of the Term Loans or
returned to such Company; or
(y) if the ASV is $55,000,000 or less, at the
option of the Agent reasonably determined, either
(a) towards the repayment of the Revolving Loans;
or (b) towards the prepayment of the Term Loans;
or (c) towards repayment of both the Revolving
Loans and the Term Loans as the Agent shall
reasonably determine; provided, however that to
the extent the Revolving Loans are repaid under
clauses (a) or (c) above, an amount equal to 50
percent of the amount by which the ASV is less
than $55,000,000 shall be added to the
Availability Reserve.
7. Each of the Companies agrees to pay, when due, all
taxes, assessments, claims and other charges (herein "taxes")
lawfully levied or assessed upon the Companies or the Collateral
and if such taxes remain unpaid after the date fixed for the
payment thereof, unless such taxes are being diligently contested
in good-faith by the Companies by appropriate proceedings, or if
any Lien shall be claimed thereunder (a) for taxes due the United
States of America or (b) which in the Agent's opinion might
create a valid obligation having priority over the rights granted
to the Agent herein, the Agent may, on the Companies' behalf, pay
such taxes, and the amount thereof shall be an Obligation secured
hereby and due to the Agent on demand.
8. Each of the Companies: (a) agrees to comply with
all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official, with which the
failure to comply would have a material and adverse impact on the
Collateral, or any material part thereof, or on the operation of
the Companies' business; provided that the Companies may contest
any acts, rules, regulations, orders and directions of such
bodies or officials in any reasonable manner which will not, in
the Agent's reasonable opinion, materially and adversely effect
the Agent's rights or priority in the Collateral; and (b) agrees
to comply with all environmental statutes, acts, rules,
regulations or orders as presently existing or as adopted or
amended in the future, applicable to the ownership and/or use of
its real property and operation of its business, which the
failure to comply with would have a material and adverse impact
on the Collateral, or any material part thereof, or on the
operation of the business of the Companies. Each of the
Companies hereby jointly and severally indemnifies the Agent and
the Lenders and agrees to defend and hold the Agent and the
Lenders harmless from and against any and all loss, damage,
claim, liability, injury or expense which the Agent and/or the
Lenders may sustain or incur (other than as a result of actions
of the Agent and/or the Lenders) in connection with: any claim
or expense asserted against the Agent and/or the Lenders as a
result of any environmental pollution, hazardous material or
environmental clean-up of the Companies' real property; or any
claim or expense which results from the Companies' operations
(including, but not limited to, the Companies' off-site disposal
practices) and the Companies further agree that this
indemnification shall survive termination of this Financing
Agreement as well as the payment of all Obligations or amounts
payable hereunder. Notwithstanding the foregoing, no Company
shall be deemed to have breached any provision of this Paragraph
8 if (i) the failure to comply with the requirements of this
Paragraph 8 resulted from good-faith error or innocent omission,
(ii) such Company promptly commences and diligently pursues a
cure of such breach and (iii) such failure is cured within
fifteen (15) business days following such Company's receipt of
notice of such failure.
9. Until termination of the Financing Agreement and
payment and satisfaction of all Obligations due hereunder, the
Companies agree:
(a) unless the Agent shall have otherwise consented in
writing, the Companies will furnish to the Agent and each Lender,
within ninety (90) days after the end of each Fiscal Year of the
Companies, Consolidated Financial Statements as at the close of
such year, audited by independent public accountants selected by
the Companies and satisfactory to the Agent and an unaudited
Consolidating Balance Sheet and consolidating statements of
profit and loss, cash flow and surplus of the Companies and all
Subsidiaries of each as at the close of such year; within forty
five (45) days after the end of each Fiscal Quarter Consolidated
Financial Statements and Consolidating Balance Sheet as at the
end of such period and consolidating statements of profit and
loss, cash flow and surplus of the Companies and all Subsidiaries
of each, certified by an authorized financial or accounting
officer of Harvard; and within thirty-five (35) days after the
end of each of the first eleven (11) months of each Fiscal Year
Consolidated Financial Statements and Consolidating Balance Sheet
and consolidating statements of profit and loss, cash flow and
surplus of the Companies and all Subsidiaries of each as at the
end of such month certified by an authorized financial or
accounting officer of Harvard; and from time to time, such
further information regarding the business affairs and financial
condition of the Companies and any subsidiaries thereof as the
Agent may reasonably request, including, without limitation, (i)
the accountant's management practice letter and (ii) annual cash
flow projections in form satisfactory to the Agent. Each
financial statement which the Companies are required to submit
hereunder must be accompanied by an officer's certificate, signed
by the President, Chief Financial Officer, Vice President,
Controller or Treasurer of Harvard, pursuant to which any one
such officer must certify that: (i) the financial statement(s)
fairly and accurately represent(s) the Companies' financial
condition at the end of the particular accounting period, as well
as the Companies' operating results during such accounting
period, subject to year-end audit adjustments; (ii) during the
particular accounting period: (x) there has been no Default or
Event of Default under this Financing Agreement, provided,
however, that if any such officer has knowledge that any such
Default or Event of Default has occurred during such period, the
existence of and a detailed description of same shall be set
forth in such officer's certificate; and (y) the Companies have
not received any notice of cancellation with respect to its
property insurance policies; and (iii) the exhibits attached to
such financial statement(s) constitute detailed calculations
showing compliance with all financial covenants contained in this
Financing Agreement;
(b) to provide the Agent from time to time, with
reports showing the current status of Accounts of each of the
Companies as reflected in the books and records of such
Companies. Such reports shall be furnished to the Agent (i)
weekly, where the aggregate Availability is $7,500,000 or more;
and (ii) daily, where aggregate Availability is less than
$7,500,000. Each such report shall be accompanied by an
officer's certificate, signed by an Executive Officer, certifying
such report as being complete and correct in all respects;
(c) to provide the Agent within 15 days of the end of
each month with (i) a report showing Eligible Inventory and
ineligible Inventory as of the close of business on the last day
of the immediately preceding month; and (ii) a report showing
aging Trade Accounts Receivable as of the last day of the
immediately preceding month. Each such report shall be
accompanied by an officer's certificate, signed by an Executive
Officer, certifying such report as being complete and correct in
all respects; and
(d) to furnish the Agent (i) promptly and in any event
within ten (10) days after any of Company, any of its respective
Subsidiaries or any ERISA Affiliate knows or has reason to know
that any ERISA Event has occurred, and (ii) promptly and in any
event within 10 days after any Company, any of its Subsidiaries
or any ERISA Affiliate knows or has reason to know that a request
for a minimum funding waiver under Section 412 of the Code has
been filed with respect to any Qualified Plan, a written
statement of the chief financial officer or other appropriate
officer of Harvard describing such ERISA Event or waiver request
and the action, if any, which the Company, its Subsidiaries and
ERISA Affiliates propose to take with respect thereto and a copy
of any notice filed with the PBGC or the IRS pertaining thereto;
(e) to furnish the Agent promptly and in any event
within three (3) days after receipt thereof, a copy of any
correspondence any Company, any of its Subsidiaries or any ERISA
Affiliate receives from the plan sponsor (as defined by Section
4001 (a)(10) of ERISA) of any Multiemployer Plan concerning
potential withdrawal liability of such Company, its Subsidiaries
and ERISA Affiliates in excess of $1,000,000 in the aggregate, or
notice of any reorganization with respect to any Multiemployer
Plan, together with a written statement of the chief financial
officer or other appropriate officer of Harvard of the action
which such Company, its Subsidiaries and ERISA Affiliates propose
to take with respect thereto; and
(f) as soon as reasonably practicable and in any event
within thirty (30) days of the Closing Date, to enter into
arrangements satisfactory to the Agent relating to Bank Accounts
maintained with banks other than The Chase Manhattan Bank (the
"Sub-Agents") in order to ensure that such Sub-Agents maintain
the Bank Accounts held by them for the benefit of the Agent and
the Lenders.
10. Until termination of the Financing Agreement and
payment and satisfaction of all Obligations due hereunder, the
Companies agree that, without the prior written consent of the
Agent, except as otherwise herein provided, none of the Companies
will:
(a) Mortgage, assign, pledge, transfer or otherwise
permit any Lien, charge, security interest, encumbrance or
judgment (whether as a result of a purchase money or title
retention transaction, or other security interest, or otherwise)
to exist on any of its assets or goods, whether real, personal or
mixed, whether now owned or hereafter acquired, except for
Permitted Encumbrances and Liens granted by the Canadian
Subsidiary to the extent permitted by the Harvard Notes.
(b) Incur or create any Indebtedness other than the
Permitted Indebtedness;
(c) borrow any money on the security of any Collateral
from sources other than the Agent and the Lenders other than
Permitted Indebtedness secured by Permitted Purchase Money Liens;
(d) sell, convey, transfer, lease or otherwise dispose
of any of their assets or any interest therein to any Person,
except (i) as otherwise permitted by this Financing Agreement;
(ii) any Company or any Subsidiary may sell, convey, transfer,
lease or otherwise dispose of its assets to any Company; (iii) as
long as no Event of Default is continuing or would result
therefrom, any such sale of assets for the fair market value
thereof, payable at least 85% in cash or cash equivalents upon
such sale; provided, however, that any such sale pursuant to
clause (iii) above is made with the consent of the Agent (such
consent not to be unreasonably withheld) and, in the case of
clause (iii) above, any Asset Sale Proceeds arising therefrom
shall be applied to the prepayment of the Revolving Loans and the
Term Loans as required by Section 11, Paragraph 2; and (iv)
Harvard may sell any assets that are or were at any time owned by
ESNA.
(e) Merge, consolidate or otherwise alter or modify
its corporate name, principal place of business, structure,
status or existence, or enter into or engage in any operation or
activity materially different from that presently being conducted
by it, except that the Companies may (i) merge with each other
and/or (ii) change their corporate name or address; provided that
in any instance under clauses (i) and (ii) (x) the Companies
shall give the Agent thirty (30) days' prior written notice
thereof and (y) the Companies shall execute and deliver prior to
or simultaneously with any such action any and all documents and
agreements requested by the Agent (including, without limitation,
any and all U.C.C. financing statements) to confirm (A) the
assumption by the surviving corporation of all Obligations to the
Agent and the Lenders of any Company so merged, (B) the
continuation and preservation of all security interests and Liens
granted to the Agent hereunder and (C) that such surviving
corporation adopts, ratifies and confirms its agreement to be
bound by and comply with this Financing Agreement;
(f) Except as disclosed on Schedule 7.10(f) hereto,
assume, guarantee, endorse or otherwise become liable upon the
obligations of any Person, except by the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, except that any
Subsidiary that was not in existence on the Closing Date may
guarantee the Harvard Notes if such Subsidiary guarantees the
Financing Agreement Obligations pursuant to documentation
reasonably satisfactory to the Agent;
(g) Declare or pay any dividend of any kind on, or
make any other distribution of assets, properties, cash, rights,
obligations or securities on account or in respect of, or
purchase, acquire, redeem or retire, or make any other payment in
respect of, any of the capital stock or equity interest, of any
class whatsoever, whether now or hereafter outstanding; provided,
however that:
(i) the Companies (other than Harvard) may
declare and pay dividends to a Company;
(ii) Harvard may repurchase or redeem PIK
Preferred Stock on or from time to time after the Closing Date,
provided that at the time thereof and immediately after giving
effect thereto, (w) no Default or Event of Default shall have
occurred and be continuing, (x) no Revolving Loans shall be
outstanding for a period of thirty (30) consecutive days, (y)
Harvard shall not have made any change to the working capital
management of itself and the Companies in order to comply with
clause (x) above, and (z) the aggregate amount paid by Harvard in
such repurchases and redemptions (including accrued dividends)
does not exceed $10,000,000 in the aggregate from the Closing
Date;
(iii) Harvard may purchase or redeem PIK
Preferred Stock from time to time after the Closing Date with the
net cash proceeds received from the substantially concurrent sale
of shares of common stock of Harvard;
(iv) Harvard may declare and pay dividends solely
in shares of common stock of Harvard;
(v) Harvard may declare and pay dividends on the
PIK Preferred Stock in accordance with the terms thereof,
provided that such dividends are payable and paid solely in
additional shares of PIK Preferred Stock having a liquidation
preference not to exceed the amount of the dividend so declared
and bearing dividends and having other terms identical to the PIK
Preferred Stock as in effect on the Closing Date;
(vi) Harvard may purchase Harvard common stock or
warrants or options to purchase Harvard common stock held by
employees of Harvard or any Subsidiary, provided that (x) at the
time thereof and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing, and (y) the aggregate amount paid by Harvard in
respect of such repurchases does not exceed $1,000,000 in any
consecutive 12-month period.
(h) The Companies shall not (i) purchase, redeem,
prepay, defease or otherwise acquire for value any principal
amount of Indebtedness, now or hereafter outstanding provided,
however, that Harvard may redeem the Harvard Notes and, with the
consent of the Agent, prepay other Permitted Indebtedness, in
each case utilizing the net cash proceeds received from the
substantially concurrent sale of shares of common stock of
Harvard; or (ii) make any payment of in respect of any
Indebtedness other than scheduled payments of principal and
interest as and when due on Permitted Indebtedness, or (iii) pay
any fee to any holder of Indebtedness other than the Agent or the
Lenders for any waiver or amendment or for any other reason.
(i) Purchase, hold or acquire any capital stock,
evidences of indebtedness or other securities of, make or permit
to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other Person (any of the
foregoing being an "Investment"), except:
(a) Investments by Harvard or the Companies
existing on the date hereof and set forth in Schedule 7.10(i);
(b) (i) loans or advances made by any Company to
any other Company and (ii) loans or advances made by any
Subsidiary (other than a Company) to any Company and evidenced by
a written instrument that provides that any payment of principal
of, interest on and other amounts in respect of such loans or
advances shall be subordinated to the prior payment in full of
the Obligations on terms satisfactory in all respects to the
Agent;
(c) loans or advances by any Company or any of
their Subsidiaries (i) to any of their employees made in the
ordinary course of business, so long as such loans and advances
do not exceed $250,000 in the aggregate at any time outstanding,
and (ii) to any of their employees who has moved more than 50
miles to take or continue employments with such Company or such
Subsidiary, as the case may be, and who has not sold his or her
residence prior to such move, where due proceeds of such loan or
advance are used by such employee for the purpose of purchasing a
residence and such loan or advance becomes due and payable upon
the sale by such employee of his or her residence prior no such
move, so long as such loans and advances do not exceed $250,000
in the aggregate at any time outstanding;
(d) investments arising from transactions by any
Company or any of its Subsidiaries with customers or suppliers in
the ordinary course of business, including endorsements of
negotiable instruments, debt obligations and other investments
received in connection with the bankruptcy or reorganization of
customers and suppliers and in settlement of delinquent
obligations of, and other disputes with, customers or suppliers,
arising in the ordinary course of business and in the exercise of
the reasonable business judgment of such Company or such
Subsidiary;
(e) loans or advances made by any Company or any
Subsidiary to the Canadian Subsidiary in an aggregate principal
amount not to exceed the Canadian dollar equivalent of $1,500,000
at any time outstanding:
(f) all Guarantees permitted by Section 7,
Paragraph 10(f) and Section 12 hereof;
(g) any Investments consisting of non-cash
consideration received in connection with a sale of assets
permitted by Section 7, Paragraph 10(d) hereof;
(h) Investments in any Subsidiary, joint venture
or partnership which conducts operations related to Harvard's
automotive lines of business, provided that the aggregate amount
of such Investments shall not exceed $2,500,000 from the Closing
Date; and
(i) other Investments not exceeding $500,000 in
the aggregate at any time outstanding.
11. Until termination of this Financing Agreement and
payment and satisfaction in full of all Obligations hereunder,
the Companies shall maintain EBITDA of not less than:
(a) $12,092,000 for the Fiscal Quarter ending December
31, 1996;
(b) $26,177,000 for the two Fiscal Quarters ending
March 31, 1997;
(c) $48,042,000 for the three Fiscal Quarters ending
June 30, 1997;
(d) $63,607,000 for the Fiscal Year ending September
30, 1997;
(e) $70,000,000 for the Fiscal Year ending September
30, 1998; and
(f) $75,000,000 thereafter.
12. Until termination of this Financing Agreement and
payment and satisfaction in full of all Obligations hereunder,
the Companies shall not make Capital Expenditures including,
without limitation, by way of Capital Lease or the incurrence of
Indebtedness with respect to Capital Expenditures during any
period below in the aggregate amount for the Companies in excess
of the amount set forth for said period:
(a) $26,893,000 for the Fiscal Quarter ending December
31, 1996;
(b) $42,689,000 for the two Fiscal Quarters ending
March 31, 1997;
(c) $55,260,000 for the three Fiscal Quarters ending
June 30, 1997;
(d) $55,260,000 for the Fiscal Year ending September
30, 1997; and
(e) $45,000,000 for the Fiscal Year ending September
30, 1998 and for each Fiscal Year thereafter.
13. Until termination of this Financing Agreement and
payment and satisfaction in full of all Obligations hereunder,
the Companies shall not utilize Revolving Loans to finance
Capital Expenditures during any period below in the aggregate
amount for the Companies in excess of the amount set forth for
said period:
(a) $13,446,000 for the Fiscal Quarter ending December
31, 1996;
(b) $21,344,000 for the two Fiscal Quarters ending
March 31, 1997;
(c) $27,630,000 for the three Fiscal Quarters ending
June 30, 1997; and
(d) $30,000,000 for the Fiscal Year ending September
30, 1997 and for each Fiscal Year thereafter.
14. The Companies shall maintain a primary product
liability insurance policy in the amount of $1,000,000 and an
umbrella insurance policy in the amount of $50,000,000 or in such
other amounts as the Agent may reasonably require.
15. The Companies agree to advise the Agent in writing
of: (a) all expenditures (actual or anticipated) in excess of
$500,000 per site for (i) environmental clean-up, (ii)
environmental compliance or (iii) environmental testing; (b) the
impact of said expenses on the Companies' working capital; and
(c) any notices a Company receives from any local, state or
federal authority advising such Company of any environmental
liability (real or potential) stemming from the Companies'
operations, premises or waste disposal practices or the waste
disposal sites used by such Company and will provide the Agent
with copies of all such notices if requested by the Agent.
Harvard agrees to provide the Agent with a copy of its Quarterly
EPA Reserve Report as soon as it is prepared.
16. Except for transactions permitted hereby or as
disclosed in the related party transactions section of Harvard's
annual report on Form 10-K for the Fiscal Year ended September
30, 1995, without the prior written consent of the Agent, the
Companies agree that they will not enter into any transaction,
including, without limitation, any purchase, sale, lease, loan or
exchange of property with any affiliate of any of the Companies,
except that any Company may engage in any of the foregoing
transactions in the ordinary course of business at prices and on
terms no less favorable to such Company than could be obtained on
an arms-length basis from unrelated third parties or other
transactions entered into with the consent of the Agent (such
consent not be unreasonably withheld).
SECTION 8. INTEREST, FEES AND EXPENSES
1. Interest on the Revolving Loans shall be payable
monthly as of the end of each month and shall be an amount equal
to (a) the Applicable Base Rate Margin plus The Chase Manhattan
Bank Rate per annum on the average of the net balances owing by
each of the Companies to the Agent in such Company's Revolving
Loan Account at the close of each day during such month on
balances other than Libor Loans and (b) the Applicable Eurodollar
Rate Margin plus the applicable Libor on any Libor Loan, on a per
annum basis, on the Libor Loans owing by such Company to the
Agent and/or the Lenders in such Company's Revolving Loan Account
at the end of each Libor Period. In the event of any change in
The Chase Manhattan Bank Rate, the rate under clause (a) above,
as of the first of the month following any change, shall be equal
to the Applicable Base Rate Margin plus The Chase Manhattan Bank
Rate then in effect. The rates hereunder shall be calculated
based on a 360-day year. The Agent and the Lenders shall be
entitled to charge any of the Companies' Revolving Loan Accounts
for the interest provided for herein when due.
2. Interest on the Term Loans shall be payable
monthly as of the end of each month on the unpaid balance or on
payment in full in an amount equal to the Applicable Term Loan
Margin plus The Chase Manhattan Bank Rate per annum, on the
average of the net balance of the Term Loans owing by each
Company to the Agent and/or the Lenders at the close of each day
during such month. In the event of any change in The Chase
Manhattan Bank Rate, the rate as of the first of the month
following any change, shall be equal to the Applicable Term Loan
Margin plus The Chase Manhattan Bank Rate then in effect. The
rate hereunder shall be calculated based on a 360 day year. The
Agent and the Lenders shall be entitled to charge any of the
Companies' Revolving Loan Accounts for the interest provided for
herein when due.
3. The Companies may elect to use Libor as to any
other outstanding Revolving Loans provided (a) there is then no
Default or Event of Default, (b) the Companies have so advised
the Agent of their election, to use Libor and the Libor Period
selected no later than three (3) Business Days preceding the
first day of the selected Libor Period, in which event (c) the
election and Libor shall be effective provided there is then no
Default or Event of Default, on the fourth Business Day following
said notice and (d) no more than $40,000,000 principal amount of
Libor Loans may be outstanding at any time. The Libor elections
must be for $1,000,000 or whole multiples thereof and there shall
be no more than three (3) Libor Loans outstanding at one time.
If no such election is timely made or can be made, or if the
Libor rate cannot be determined, then the Agent shall compute
interest by reference to The Chase Manhattan Bank Rate. In
addition, the Companies shall pay to the Agent for the benefit of
the Lenders, upon the request of the Agent, such amount or
amounts as shall compensate the Agent and/or the Lenders for any
loss, costs or expenses incurred by the Agent and/or the Lenders
(as reasonably determined by the Agent and the Lenders) as a
result of: (i) any payment or prepayment on a date other than the
last day of a Libor Period for such Libor Loan or (ii) any
failure of the Companies to borrow a Libor Loan on the date for
such borrowing specified in the relevant notice; such
compensation to include, without limitation, an amount equal to
any loss or expense suffered by the Agent and/or the Lenders
during the period from the date of receipt of such payment or
prepayment or the date of such failure to borrow to the last day
of such Libor Period if the rate of interest obtained by the
Agent and/or the Lenders upon the reemployment of an amount of
funds equal to the amount of such payment, prepayment or failure
to borrow is less than the rate of interest applicable to such
Libor Loan for such Libor Period. The determination by the Agent
and/or the Lenders of the amount of any such loss or expense,
when set forth in a written notice to the Companies, containing
the Agent's and/or the Lenders' calculations thereof in
reasonable detail, shall be conclusive on the Companies, in the
absence of manifest error. Calculation of all amounts payable to
the Agent and/or the Lenders under this Paragraph 3 with regard
to Libor Loans shall be made as though the Agent and/or the
Lenders had actually funded the Libor Loans through the purchase
of deposits in the relevant market and currency, as the case may
be, bearing interest at the rate applicable to such Libor Loans
in an amount equal to the amount of the Libor Loans and having a
maturity comparable to the relevant interest period; provided,
however, that the Agent and the Lenders may fund each of the
Libor Loans in any manner the Agent and the Lenders see fit and
the foregoing assumption shall be used only for calculation of
amounts payable under this Paragraph 3. In addition,
notwithstanding anything to the contrary contained herein, to the
extent that the Agent and the Lenders apply proceeds of
Collateral, including the Accounts, or other amounts received by
it from or on behalf of the Companies to the Revolving Loans such
application shall be (i) initially to the Revolving Loans bearing
interest based on The Chase Manhattan Bank Rate and (ii)
subsequently to Libor Loans; provided, however, that (x) upon the
occurrence of an Event of Default or (y) in the event the
aggregate amount of outstanding Libor Rate Loans exceeds
Availability or the applicable maximum levels set forth therefor
herein, the Agent and the Lenders may apply all such amounts
received to the payment of Obligations in such manner and in such
order as the Agent may elect in its reasonable business judgment.
In the event that any such amounts are applied to Revolving Loans
which are Libor Loans, such application shall be treated as a
prepayment of such loans and the Agent and the Lenders shall be
entitled to the compensation described in this Paragraph.
4. In consideration of the Letter of Credit Guaranty
of the Agent, the Company obtaining the Letter of Credit shall
pay the Agent for the benefit of the Lenders the Letter of Credit
Guaranty Fee which shall be an amount equal to two percent (2%)
per annum, payable monthly, on the face amount of each Letter of
Credit less the amount of any and all amounts previously drawn
under the Letter of Credit. The Lenders shall share in such
Letter of Credit Guaranty Fee in accordance with their respective
agreements with the Agent.
5. Any charges, fees, commissions, costs and expenses
charged to the Agent and/or the Lenders for the Companies'
account by any Issuing Bank in connection with or arising out of
Letters of Credit issued pursuant to this Financing Agreement or
out of transactions relating thereto will be charged to the
Revolving Loan Account of the Company obtaining the Letter of
Credit in full when charged to or paid by the Agent and when made
by any such Issuing Bank shall be conclusive on the Agent.
6. The Companies shall jointly and severally
reimburse or pay the Agent, as the case may be, for all
Out-of-Pocket Expenses.
7. Upon the last Business Day of each month,
commencing with the last day of the month in which this Financing
Agreement is executed, the Companies shall jointly and severally
pay the Agent for the benefit of the Lenders the Revolving Line
of Credit Fee.
8. To induce the Agent and the Lenders to enter into
this Financing Agreement and to extend to the Companies the
Revolving Loans, Letters of Credit Guaranty and the Term Loans,
the Companies shall jointly and severally pay to the Agent for
the benefit of the Lenders a Loan Facility Fee in the amount set
forth in the Fee Letter upon execution of this Financing
Agreement, less any amounts which may have been paid by way of
advance towards such Loan Facility Fee prior to the date hereof.
9. Upon the date hereof and on such annual
anniversary hereof the Companies shall pay to the Agent the Agent
Fee, which shall be fully earned and not refundable or rebateable
when due and payment for which the Companies shall jointly and
severally be liable.
10. The Companies shall jointly and severally pay the
Agent's standard charges for, and the fees and expenses of, the
Agent personnel used by the Agent for reviewing the books and
records of the Companies and for verifying, testing, protecting,
safeguarding, preserving or disposing of all or any part of the
Collateral; provided, however, that the foregoing shall not be
payable except during the continuance of an Event of Default if
the Companies are paying an Agent Fee.
11. Each of the Companies hereby authorizes the Agent
to charge its Revolving Loan Account with the Agent with the
amount of all payments due hereunder as such payments become due.
Each of the Companies confirms that any charges which the Agent
may so make to the account of any of the Companies as herein
provided will be made as an accommodation to the Companies and
solely at the Agent's discretion. The Agent may in its sole and
absolute discretion allocate any of the above fees and/or any
other payments due under this Financing Agreement to the
Companies' respective Revolving Loan Accounts in any proportion
that the Agent may decide.
SECTION 9. POWERS
Each of the Companies hereby constitutes the Agent on
behalf of the Lenders or any Person or agent the Agent may
designate as its attorney-in-fact, at the Companies' cost and
expense, to exercise all of the following powers, which being
coupled with an interest, shall be irrevocable until all of the
Obligations have been paid in full:
(a) To receive, take, endorse, sign, assign and
deliver, all in the name of the Agent or the Companies, or any
one of them, any and all checks, notes, drafts, and other
documents or instruments relating to the Collateral;
(b) To receive, open and dispose of all mail
addressed to the Companies, or any one of them, and to notify
postal authorities to change the address for delivery thereof to
such address as the Agent may designate;
(c) To request from customers indebted on
Accounts at any time, in the name of the Agent or the Companies,
or any one of them, or that of the Agent's designee, information
concerning the amounts owing on the Accounts;
(d) To transmit to customers indebted on Accounts
notice of the Agent's interest therein and to notify customers
indebted on Accounts to make payment directly to the Agent for
the Companies' accounts or any one of them; and
(e) To take or bring, in the name of the Agent or
the Companies, or any one of them, all steps, actions, suits or
proceedings deemed by the Agent necessary or desirable to enforce
or effect collection of the Accounts.
Notwithstanding anything hereinabove contained to the contrary,
the powers set forth in (b), (d) and (e) above may only be
exercised after the occurrence of an Event of Default and until
such time as such Event of Default is waived in writing by the
Agent. In addition, the powers set forth in (c) above will only
be exercised in the name of the Companies, or any one of them, or
a certified public accountant designated by the Agent prior to
the occurrence of such Event of Default.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
1. Notwithstanding anything herein to the contrary,
the Lenders acting through the Agent may terminate this Financing
Agreement immediately upon the occurrence of any of the following
(herein "Events of Default"):
(a) cessation of the business of the Companies,
or any one of them, or the calling of a meeting of the creditors
of the Companies, or any one of them, for purposes of
compromising their or its debts and obligations;
(b) the failure of the Companies, or any one of
them, to generally meet debts as they mature;
(c) the commencement by or against the Companies,
or any one of them, of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any
federal or state law, provided that in the event of any
involuntary proceeding commenced against the Companies, or any
one of them, such proceeding is not dismissed or discharged
within thirty (30) days after commencement thereof;
(d) any representation or warranty made or deemed
made by any Company herein shall prove to have been incorrect
when made or deemed made;
(e) breach by the Companies, or any one of them,
of any covenant contained herein (other than those referred to in
clause (f) below) or in any other written agreement between the
Companies, or any one of them, and the Agent and/or the Lenders,
provided that such breach by the Companies, or any one of them,
of any of the covenants referred in this clause (e) shall not be
deemed to be an Event of Default unless and until such breach
shall remain unremedied to the Agent's satisfaction for a period
of ten (10) days from the date of such breach;
(f) breach by the Companies, or any one of them,
of any covenant contained in or Section 7, Paragraphs 5, 6, and 9
through 12;
(g) failure of the Companies or any one of them
to pay any of the Obligations within five (5) Business Days of
the due date thereof, provided that nothing contained herein
shall prohibit the Agent from charging such amounts to any of the
Companies' Revolving Loan Accounts on the due date thereof;
(h) the Companies, or any one of them, shall (i)
engage in any "prohibited transaction" as defined in ERISA, (ii)
have any "accumulated funding deficiency" as defined in ERISA,
(iii) have any Reportable Event as defined in ERISA, (iv)
terminate any Plan, as defined in ERISA or (v) be engaged in any
proceeding in which the Pension Benefit Guaranty Corporation
shall seek appointment, or is appointed, as trustee or
administrator of any Plan, as defined in ERISA, and with respect
to this clause (g) such event or condition (A) remains uncured
for a period of thirty (30) days from date of occurrence and (B)
could, in the reasonable opinion of the Agent, subject the
Companies to any tax, penalty or other liability material to the
business, operations or financial condition of the Companies; or
(i) Any Company or any Subsidiary shall (i) fail
to pay any principal or interest, regardless of amount, due in
respect of any Indebtedness in an aggregate principal amount in
excess of $2,500,000, when and as the same shall become due and
payable, (ii) fail to observe or perform any term, covenant,
condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (ii) is to cause, or
permit the holder or holders of such Indebtedness or a trustee on
its or their behalf (with or without the giving of notice, the
lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity, or (iii) be required to prepay or
make any offer to prepay or repurchase any such Indebtedness
prior to its stated maturity.
2. Upon the occurrence of a Default and/or an Event
of Default, the Agent may (at its option) and shall at the
direction of the Required Lenders declare that all loans,
advances and extensions of credit provided for in Sections 3, 4
and 5 hereof shall be thereafter in the Agent's sole discretion
and the obligation of the Agent and/or the Lenders to make
Revolving Loans and open Letters of Credit shall cease unless
such Default or Event of Default is waived in writing by the
Agent or cured to the Agent's satisfaction, and upon the
occurrence of an Event of Default the Agent may (at its option)
and shall at the direction of the Required Lenders declare that:
(a) all Obligations shall become immediately due and payable; (b)
the Default Rate of Interest shall be charged on all then
outstanding or thereafter incurred Obligations in lieu of the
interest provided for in Section 8 hereof, provided that with
respect to this subclause (b), (i) the Agent has given the
Companies written notice of the Event of Default, provided,
however, that no notice is required if the Event of Default is
the event listed in Paragraph 1, clause (c) of this Section 10
and (ii) the Companies have failed to cure the Event of Default
within ten (10) days after the Agent deposited such notice in the
United States mail in the event of the occurrence of the Event of
Default other than that listed in Paragraph 1, clause (c) of this
Section 10; and (iii) this Financing Agreement shall immediately
terminate upon notice to the Companies. Notwithstanding the
foregoing, no notice of termination is required if the Event of
Default is the Event listed in Paragraph 1, clause (c) of this
Section 10 in which event, upon the occurrence thereof, this
Financing Agreement shall terminate and all Obligations shall
automatically be immediately due and payable. The exercise of
any option or remedy is not exclusive of any other option which
may be exercised at any time by the Agent and/or the Lenders.
3.(a) Immediately upon the occurrence of any Event of
Default, the Agent may and at the request of the Required Lenders
shall to the extent permitted by law: (i) remove from any
premises where same may be located any and all documents,
instruments, files and records, and any receptacles or cabinets
containing same, relating to the Accounts, or the Agent may use,
at the Companies' expense, such of the Companies' personnel,
supplies or space at the Companies' places of business or
otherwise, as may be necessary to properly administer and control
the Accounts or the handling of collections and realizations
thereon; (ii) bring suit, in the name of the Companies, or any
one of them, or the Agent on behalf of the Lenders, and generally
shall have all other rights respecting said Accounts, including
without limitation the right to: accelerate or extend the time
of payment, settle, compromise, release in whole or in part any
amounts owing on any Accounts and issue credits in the name of
the Companies or any of them or the Agent; (iii) sell, assign and
deliver the Collateral and any returned, reclaimed or repossessed
merchandise, with or without advertisement, at public or private
sale, for cash, on credit or otherwise, at the Agent's sole
option and discretion, and the Agent may bid or become a
purchaser at any such sale, free from any right of redemption,
which right is hereby expressly waived by the Companies; (iv)
foreclose the security interests created herein by any available
judicial procedure, or to take possession of any or all of the
Inventory or Equipment without judicial process, and to enter any
premises where any Inventory, Equipment and/or Bank Accounts may
be located for the purpose of taking possession of or removing
the same; and (v) exercise any other rights and remedies provided
in law, in equity, by contract or otherwise.
(b) The Agent shall have the right, without notice or
advertisement, to sell, lease, or otherwise dispose of all or any
part of the Collateral whether in its then condition or after
further preparation or processing, in the name of the Companies,
or any one of them, or the Agent, or in the name of such other
party as the Agent may designate, either at public or private
sale or at any broker's board, in lots or in bulk, for cash or
credit, with or without warranties or representations, and upon
such other terms and conditions as the Agent in its sole
discretion may deem advisable, and the Agent shall have the right
to purchase at any such sale. If any Inventory and Equipment
shall require rebuilding, repairing, maintenance or preparation,
the Agent shall have the right, at its option, to do such of the
aforesaid as is necessary, for the purpose of putting the
Inventory and Equipment in such saleable form as the Agent shall
deem appropriate.
(c) The Companies agree, at the request of the Agent,
to assemble the Inventory and Equipment and to make it available
to the Agent at premises of the Companies or elsewhere and to
make available to the Agent the premises and facilities of the
Companies for the purpose of the Agent's taking possession of,
removing or putting the Inventory and Equipment in saleable form.
However, if notice of intended disposition of any Collateral is
required by law, it is agreed that ten (10) days' notice shall
constitute reasonable notification and full compliance with the
law.
(d) The net cash proceeds resulting from the Agent's
exercise of any of the foregoing rights (after deducting all
charges, costs and expenses, including reasonable attorneys'
fees), shall be applied by the Agent to the payment of the
Obligations, whether due or to become due, in such order as the
Agent may elect, and the Companies shall remain liable to the
Agent and the Lenders for any deficiencies, and the Agent and the
Lenders in turn agree to remit to the Companies or their
successors or assigns, any surplus resulting therefrom.
(e) The enumeration of the foregoing rights is not
intended to be exhaustive and the exercise of any right shall not
preclude the exercise of any other rights, all of which shall be
cumulative.
SECTION 11. TERMINATION; PREPAYMENT
1. Except as otherwise permitted herein, the
Companies may terminate this Financing Agreement and the Line of
Credit provided, however that the Companies pay to the Agent for
the benefit of the Lenders the Early Termination Fee if
terminated prior to the first anniversary of the Closing Date.
The Agent may and, if directed by the Required Lenders, shall
terminate the Financing Agreement immediately upon the occurrence
of an Event of Default; provided, however, that if the Event of
Default is an event listed in Paragraph 1, clause (c) of Section
10 hereof, the Agent and the Lenders may regard the Financing
Agreement as terminated and no notice to that effect shall be
required. This Financing Agreement, unless terminated as herein
provided, shall automatically continue from anniversary date to
anniversary date following the initial Termination Date,
provided, however, that (i) no Lender shall be required to extend
its Commitment beyond the initial Termination Date and (ii) no
Lender shall be required to extend its Commitment beyond the
initial Termination Date or any subsequent Termination Date (if
applicable) unless such Lender has given notice to the Agent no
more than 60 nor less than 30 days prior to the initial
Termination Date (or any subsequent Termination Date, if
applicable) stating that it wishes to extend its Commitment
beyond such initial Termination Date (or subsequent Termination
Date, if applicable). Termination by any of the Companies shall
constitute termination with respect to all Companies. All
Obligations shall become due and payable as of any termination
hereunder or under Section 10 hereof and, pending a final
accounting, the Agent and the Lenders may withhold any balances
in the Companies' accounts (unless supplied with an indemnity
satisfactory to the Agent) to cover all of the Obligations,
whether absolute or contingent. All of the Agent's and Lenders'
rights, Liens and security interests shall continue after any
termination until all Obligations have been paid and satisfied in
full.
2. Upon receipt after the date hereof from one or more
transactions of Asset Sale Proceeds aggregating
(a) up to and including $20,000,000, the Companies
shall prepay the Revolving Loans in an amount equal to such Asset
Sale Proceeds and the Availability Reserve shall be increased by
50% of the amount of such Asset Sale Proceeds in excess of
$10,000,000; and
(b) in excess of $20,000,000, the Companies shall
comply with clause (a) above with respect to the first
$20,000,000 of Asset Sales Proceeds, and, with respect to the
amount in excess of $20,000,000, such excess shall be applied to
the Obligations in such amounts, together with an increase in the
Availability, Reserve, as the Agent shall reasonably determine at
the Agent's election.
All prepayments shall be made together with accrued interest to
the date of such prepayment on the amount prepaid.
SECTION 12. GUARANTY
1. Each Company hereby unconditionally and
irrevocably guarantees the full and prompt payment when due,
whether at stated maturity, by acceleration or otherwise, of, and
the performance of, the Obligations, whether now or hereafter
existing and whether for principal, interest, fees, expenses or
otherwise, and any and all expenses (including, without
limitation, counsel fees and expenses) incurred by any Lender in
enforcing any rights under this Financing Agreement. This
guaranty is an absolute guaranty of payment and performance and
not a guaranty of collection. Any term or provision of this
guaranty or this Financing Agreement to the contrary
notwithstanding, the maximum, aggregate amount of the Obligations
guaranteed hereunder by each Company shall not exceed the maximum
amount that can be hereby guaranteed without rendering this
guaranty and this Financing Agreement, as it relates to such
Company, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer.
2. Each Company guaranties that the Obligations will
be paid strictly in accordance with the terms of this Financing
Agreement, the Promissory Notes and the other Loan Documents,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of the Lenders with respect thereto. The liability of
each of the Companies under this Section 12 shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of any
provision of any other loan document or any other agreement
or instrument relating to any loan document, or avoidance or
subordination of any of the Obligations;
(ii) any change in the time, manner or place of
payment of, or in any other term of, or any increase in the
amount of, all or any of the Obligations, or any other
amendment or waiver of any term of, or any consent to
departure from any requirement of, this Financing Agreement,
the Promissory Notes or any of the other loan documents;
(iii) any exchange, release or non-perfection of any
Lien on any Collateral for, or any release or amendment or
waiver of any term of any other guaranty of, or any consent
to departure from any requirement of any other guaranty of,
all or any of the Obligations;
(iv) the absence of any attempt to collect any of
the Obligations from any of the other Companies or for any
other guarantor or any other action to enforce the same or
the election of any remedy by any Lender;
(v) any waiver, consent, extension, forbearance
or granting of any indulgence by the Agent or any Lender
with respect to any provision of any other loan document;
(vi) the election by the Agent or any Lender in
any proceeding under chapter 11 of the Bankruptcy Code of
the application of section 1111(b)(2) of the Bankruptcy
Code;
(vii) any borrowing or grant of a security interest by
any of the Companies, as debtor-in-possession, under section
364 of the Bankruptcy Code;
(viii) the disallowance, under section 502 of the
Bankruptcy Code, of all or any portion of the claims of any
Lender for payment of any of the Obligations; or
(ix) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a
borrower or a guarantor.
3. (a) Each Company hereby (i) waives (A)
promptness, diligence, notice of acceptance and any and all other
notices with respect to any of the Obligations or this guaranty,
(B) any requirement that the Agent or any Lender protect, secure,
perfect or insure any security interest in or other Lien on any
property subject thereto or exhaust any right or take any action
against any of the Companies or any other Person or any
Collateral, (C) the filing of any claim with a court in the event
of receivership or bankruptcy of any of the Companies, (D)
protest or notice with respect to nonpayment of all or any of the
Obligations, (E) the benefit of any statute of limitation, (F)
all demands whatsoever (and any requirement that same be made on
any of the Companies as a condition precedent to the Companies'
obligations hereunder); and (ii) covenants and agrees that this
guaranty will not be discharged except by complete performance of
the Obligations.
(b) If, in the exercise of any of its rights and
remedies, the Agent or any Lender shall forfeit any of its rights
or remedies, including, without limitation, its right to enter a
deficiency judgment against any of the Companies or any other
Person, whether because of any applicable law pertaining to
"election of remedies" or the like, each Company hereby consents
to such action by such Lender and waives any claim based upon
such action. Any election of remedies which results in the
denial or impairment of the right of the Agent or such Lender to
seek a deficiency judgment against any of the Companies shall not
impair the obligation of each of the Companies to pay the full
amount of the Obligations.
(c) In the event the Agent shall bid at any
foreclosure or trustee's sale or at any private sale permitted by
law or under any of the loan documents, the Agent may bid all or
less than the amount of the Obligations and the amount of such
bid need not be paid by the Agent but shall be credited against
the Obligations. The amount of the successful bid at any such
sale, whether the Agent or any other Person is the successful
bidder, shall be conclusively deemed to be the fair market value
of the Collateral and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed hereunder,
notwithstanding that any present or future law or court decision
or ruling may have the effect of reducing the amount of any
deficiency claim to which the Agent might otherwise be entitled
by reason of such bidding at any such sale.
(d) Each Company agrees that notwithstanding the
foregoing and without limiting the generality of the foregoing
if, after the occurrence and during the continuance of an Event
of Default, the Agent or any of the Lenders is prevented by
applicable law from exercising its respective rights to
accelerate the maturity of the Obligations, to collect interest
on the Obligations, or to enforce or exercise any other right or
remedy with respect to the Obligations, or the Agent is prevented
from taking any action to realize on the Collateral, each Company
agrees to pay to the Agent for the account of the Lenders, upon
demand therefor, the amount that would otherwise have been due
and payable had such rights and remedies been permitted to be
exercised by the Agent or the Lenders.
(e) Each Company consents and agrees that the Agent
and the Lenders shall be under no obligation to xxxxxxxx any
assets in favor of the Companies, or any of them, otherwise in
connection with obtaining payment of any or all of the
Obligations from any Person or source.
4. Each Company waives and relinquishes any and all
rights which it may acquire by way of subrogation, contribution
or reimbursement by reason of this guaranty or by any payment
made hereunder.
5. Upon the occurrence and during the continuance of
any Event of Default, the Agent and each of the Lenders is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the Agent or such Lender to or for the credit or the account
of any of the Companies against any and all of the Obligations,
irrespective of whether or not such Lender shall have made any
demand under this guaranty and although such obligations may be
contingent and unmatured. The Agent and each of the Lenders
agrees promptly to notify the Companies after any such set-off
and application made by the Agent or such Lender; provided,
however, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the
Agent and each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights
of set-off) which the Agent or such Lender may have.
6. To the extent any Company makes any payment under
this guaranty which, when added to all preceding payments made by
such Company under this guaranty would result in the aggregate
payments under this guaranty by such Company exceeding its
Percentage (as defined below) of all payments then or theretofore
made by all Companies under this guaranty, such Company shall
have a right of contribution against each other Company whose
aggregate payments hereunder at any time of determination are
less than its Percentage of all payments made by all Companies
under this guaranty, in an amount such that after giving effect
to any such contribution rights will have paid only its
Percentage of all payments made under this guaranty by all
Companies. As used in this paragraph, a Company's Percentage
shall mean the percentage obtained by dividing (i) the amount by
which the present fair saleable value of the assets of the
Company on the date of enforcement of this guaranty exceeds its
liabilities (without giving effect to this Section 12), (such
excess for the Company defined as its "Guarantor Net Worth") by
(ii) the sum of the Guarantor Net Worth of all Companies;
7. This guaranty is a continuing guaranty and shall
(i) remain in full force and effect until indefeasible payment in
full of the Obligations, (ii) be binding upon each of the
Companies, its successors and assigns, and (iii) inure to the
benefit of and be enforceable by the Agent and the Lenders and
their respective successors, transferees, and assigns. Without
limiting the generality of the foregoing clause (iii), the Agent
and any Lender may assign or otherwise transfer any Promissory
Note held by it or Obligation owing to it to any other Person,
and such other Person shall thereupon become vested with all the
rights in respect thereof granted to the Agent or to such Lender
herein or otherwise with respect to such Promissory Notes and
Obligations so transferred or assigned.
SECTION 13. MISCELLANEOUS
1. Each of the Companies hereby waives diligence,
demand, presentment and protest and any notices thereof as well
as notice of nonpayment. No delay or omission of the Agent or
the Lenders or the Companies, or any of them, to exercise any
right or remedy hereunder, whether before or after the happening
of any Event of Default, shall impair any such right or shall
operate as a waiver thereof or as a waiver of any such Event of
Default. No single or partial exercise by the Agent or the
Lenders of any right or remedy precludes any other or further
exercise thereof, or precludes any other right or remedy.
2. This Financing Agreement and the documents
executed and delivered in connection therewith constitute the
entire agreement among the Companies and the Agent and the
Lenders; supersede all prior agreements, if any; and shall bind
and benefit the Companies, the Agent and the Lenders and their
respective successors and assigns. This Financing Agreement can
be amended, modified or changed only by a writing signed by the
Companies, the Agent and the Required Lenders (unless the consent
of all Lenders is required pursuant to Section 15, Paragraph 10
hereof).
3. In no event shall the Companies, upon demand by
the Agent and/or the Lenders for payment of any indebtedness
relating hereto, by acceleration of the maturity thereof, or
otherwise, be obligated to pay interest and fees in excess of the
amount permitted by law. Regardless of any provision herein or
in any agreement made in connection herewith, the Agent and/or
the Lenders shall never be entitled to receive, charge or apply,
as interest on any indebtedness relating hereto, any amount in
excess of the maximum amount of interest permissible under
applicable law. If the Agent and/or the Lenders ever receive,
collect or apply any such excess, it shall be deemed a partial
repayment of principal and treated as such; and if principal is
paid in full, any remaining excess shall be refunded to the
Companies. This paragraph shall control every other provision
hereof and of any other agreement made in connection herewith.
4. If any provision hereof or of any other agreement
made in connection herewith is held to be illegal or
unenforceable, such provision shall be fully severable, and the
remaining provisions of the applicable agreement shall remain in
full force and effect and shall not be affected by such
provision's severance. Furthermore, in lieu of any such
provision, there shall be added automatically as a part of the
applicable agreement a legal and enforceable provision as similar
in terms to the severed provision as may be possible.
5. THE COMPANIES, THE AGENT AND THE LENDERS EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS FINANCING AGREEMENT. EACH OF THE
COMPANIES HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED.
6. Except as otherwise herein provided, any notice or
other communication required hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered
when hand delivered or sent by telegram or telex, or three days
after deposit in the United State mails, with proper first class
postage prepaid and addressed to the party to be notified as
follows:
(a) if to the Agent, at:
The CIT Group/Business Credit, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, Vice President and
Regional Manager
Fax No.: (000) 000-0000
(b) if to any other party becoming a Lender
hereunder to the address specified in the
Assignment and Transfer Agreement.
(c) if to the Companies at:
Harvard Industries, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx and Xxxxxxx Xxxxxx Esq.
Fax No.: (000) 000-0000
and a copy to:
Xxxxxx X. Xxxxxxxxxx Esq.
0000 Xxxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
or to such other address as any party may designate for itself by
like notice.
7. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS FINANCING AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
8. This Financing Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 14. AGREEMENT BETWEEN THE LENDERS
1. (a) The Agent, for the account of the Lenders,
shall disburse all loans and advances to the Companies and shall
handle all collections of Collateral and repayment of
Obligations. It is understood that for purposes of advances to
the Companies and for purposes of this Section 14 the Agent is
using the funds of the Agent.
(b) Unless the Agent shall have been notified in
writing by any Lender prior to any advance to the Companies that
such Lender will not make such Lender's Ratable Portion of such
borrowing on such date available to the Agent, the Agent may
assume that such Lender shall make such Ratable Portion available
to the Agent on a Settlement Date, and the Agent may, in reliance
upon such assumption, make available to the Companies a
corresponding amount. A certificate of the Agent submitted to
any Lender with respect to any amount owing under this clause
shall be conclusive, absent manifest error. If such Lender's
Ratable Portion is not in fact made available to the Agent by
such Lender on the Settlement Date, the Agent shall be entitled
to recover such amount with interest thereon at the rate per
annum applicable to Revolving Loans hereunder, on demand, from
the Companies without prejudice to any rights which the Agent or
the Companies may have against such Lender hereunder. Nothing
contained in this subsection shall relieve any Lender which has
failed to make available its Ratable Portion of any borrowing
hereunder from its obligation to do so in accordance with the
terms hereof. Nothing contained herein shall be deemed to
obligate the Agent to make available to the Companies the full
amount of a requested advance when the Agent has any notice
(written or otherwise) that any Lender will not advance its
Ratable Portion thereof.
2. On the Settlement Date, the Agent and the Lenders
shall each remit to the other, in immediately available funds,
all amounts necessary so as to ensure that, as of the Settlement
Date, the Lenders shall have their Ratable Portion of all
outstanding Obligations.
3. The Agent shall forward to each Lender, at the end
of each month, a copy of the account statement rendered by the
Agent to the Companies.
4. The Agent shall, after receipt of any interest and
fees earned under this Financing Agreement, promptly remit to
each Lender: (a) its Ratable Portion of all fees, provided,
however, that (i) no Lender (other than CITBC) shall share in the
Agent Fee; and (ii) each Lender shall receive its share of the
Letter of Credit Guaranty Fee, the Revolving Line of Credit Fee,
and the Loan Facility Fee in accordance with its agreements with
the Agent contained in the Assignment and Transfer Agreement
executed by such Lender; (b) interest on the Revolving Loans on
all outstanding amounts advanced by such Lender on each
Settlement Date, prior to adjustment, that are subsequent to the
last remittance by the Agent to such Lender of the Companies's
interest, computed at the rate provided for in Section 8 hereof
less such amounts as may be agreed between such Lender and the
Agent in the Assignment and Transfer Agreement executed by such
Lender; (c) its pro rata portion of all principal repaid on the
Term Loans; and (d) interest on the Term Loans computed at the
rate provided for in Section 8 hereof less such amounts as may be
agreed between such Lender and the Agent in the Assignment and
Transfer Agreement executed by such Lender.
5. (a) The Companies acknowledge that the Lenders
may sell participations in the loans and extensions of credit
made and to be made to the Companies hereunder. The Companies
further acknowledge that in doing so, the Lenders may grant to
such participants certain rights which would require the
participant's consent to certain waivers, amendments and other
actions with respect to the provisions of this Financing
Agreement, provided that the consent of any such participant
shall not be required except for matters requiring the consent of
all Lenders hereunder as set forth in Xxxxxxx 00, Xxxxxxxxx 00
xxxxxx.
(x) The Companies authorize each Lender to disclose to
any participant or purchasing lender (each, a "Transferee") and
any prospective Transferee any and all financial information in
such Lender's possession concerning the Companies and their
affiliates which has been delivered to such Lender by or on
behalf of the Companies pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Companies in
connection with such Lender's credit evaluation of the Companies
and their affiliates prior to entering into this Agreement.
(c) Each Lender and the Agent agree to keep
information obtained by it pursuant hereto confidential in
accordance with such Lender's or the Agent's, as the case may be,
customary practices and agrees that it will only use such
information in connection with the transactions contemplated by
this Agreement and not disclose any of such information other
than (a) to such Lender's or the Agent's, as the case may be,
employees, representatives, agents and affiliates who are or are
expected to be involved in the evaluation of such information in
connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such
information, (b) to the extent such information presently is or
hereafter becomes available to such Lender or the Agent, as the
case may be, on a non-confidential basis from a source other than
the Companies, (c) to the extent disclosure is required by law,
regulation or judicial order or requested or required by bank
regulators or auditors, or (d) to assignees or participants or
potential assignees or participants who agree in writing for the
benefit of the Companies to be bound by the provisions of this
sentence.
6. The Companies hereby agree that each Lender is
solely responsible for its Ratable Portion of the Revolving Line
of Credit and that neither the Agent nor any Lender shall be
responsible for, nor assume any obligations for the failure of
any Lender to make available, its Ratable Portion of the Line of
Credit. Further, should any Lender refuse to make available its
Ratable Portion of the Revolving Line of Credit, then any other
Lender may, but without obligation to do so, increase,
unilaterally, its Ratable Portion of the Revolving Line of Credit
in which event the Companies are so obligated to that other
Lender.
7. In the event that the Agent, the Lenders or any
one of them is sued or threatened with suit by the Companies or
any one of them, or by any receiver, trustee, creditor or any
committee of creditors on account of any preference, voidable
transfer or lender liability issue, alleged to have occurred or
been received as a result of, or during the transactions
contemplated under this Financing Agreement, then in such event
any money paid in satisfaction or compromise of such suit,
action, claim or demand and any expenses, costs and attorneys'
fees paid or incurred in connection therewith, whether by the
Agent, the Lenders or any one of them, shall be shared by the
Lenders ratably. In addition, any costs, expenses, fees or
disbursements incurred by outside agencies or attorneys retained
by the Agent to effect collection or enforcement of any rights in
the Collateral, including enforcing, preserving or maintaining
rights under this Financing Agreement shall be shared ratably
between and among the Lenders to the extent not reimbursed by the
Companies or from the proceeds of Collateral. The provisions of
this Paragraph shall not apply to any suits, actions, proceedings
or claims that (a) predate the date of this Financing Agreement
or (b) are based on transactions, actions or omissions that
predate the date of this Financing Agreement.
8. Each of the Lenders agrees with each other Lender
that any money or assets of the Companies held or received by
such Lender, no matter how or when received, shall be applied to
the reduction of the Obligations (to the extent permitted
hereunder) after (a) the occurrence of an Event of Default and
(b) the election by the Agent or the Required Lenders to
accelerate the Obligations. In addition, the Companies
authorize, and the Lenders shall have the right, without notice,
upon any amount becoming due and payable hereunder, to set-off
and apply against any and all property held by, or in the
possession of such Lender against the Obligations.
9. CITBC shall have the right at any time to assign
to one or more commercial banks, commercial finance lenders or
other financial institutions all or a portion of its rights and
obligations under this Financing Agreement (including, without
limitation, its obligations under the Line of Credit, the Term
Loans, the Revolving Loans and its rights and obligations with
respect to Letters of Credit) with the consent of Harvard (such
consent not to be unreasonably withheld); provided, however, that
no such consent will be required following an Event of Default.
Upon execution of an Assignment and Transfer Agreement, (i) the
assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such assignment, have the rights and obligations of
CITBC as the case may be hereunder and (ii) CITBC shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such assignment, relinquish its rights and be
released from its obligations under this Financing Agreement.
The Companies shall, if necessary, execute any documents
reasonably required to effectuate the assignments. No other
Lender may assign its interest in the loans and advances and
extensions of credit hereunder without the prior written consent
of the Agent (such consent not to be unreasonably withheld).
SECTION 15. AGENCY
1. Each Lender hereby irrevocably designates and
appoints CITBC as the Agent for the Lenders under this Financing
Agreement and any ancillary loan documents and irrevocably
authorizes CITBC as the Agent for such Lender, to take such
action on its behalf under the provisions of this Financing
Agreement and all ancillary documents and to exercise such powers
and perform such duties as are expressly delegated to the Agent
by the terms of this Financing Agreement and all ancillary
documents together with such other powers as are reasonably
incidental thereto, including, without limitation, to receive,
indorse and collect all instruments made payable to the Companies
representing any dividend or other distribution or payment in
respect of the Pledged Collateral or any part thereof, to give
full discharge for the same, and to vote or grant any consent in
respect of the Pledged Shares authorized by Section 6, Paragraph
9. Notwithstanding any provision to the contrary elsewhere in
this Financing Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Financing Agreement and the ancillary
documents or otherwise exist against the Agent.
2. The Agent may execute any of its duties under this
Financing Agreement and all ancillary documents by or through
agents or attorneys-in-fact and shall be entitled to the advice
of counsel concerning all matters pertaining to such duties.
3. Neither the Agent nor any of its officers,
directors, employees, agents, or attorneys-in-fact shall be (i)
liable to any Lender for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this
Financing Agreement or any ancillary document (except for its or
such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any Lender for any recitals,
statements, representations or warranties made by the Companies
or any of them, or any officer of any thereof contained in this
Financing Agreement or any ancillary 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 Financing Agreement or any of the ancillary documents
or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Financing Agreement or any
of the ancillary documents or for any failure of the Companies to
perform their obligations hereunder or thereunder. The Agent
shall not be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Financing
Agreement or any of the ancillary documents or to inspect the
properties, books or records of the Companies, or any of them.
4. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order
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, without limitation, counsel to the Companies),
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 Financing Agreement and all ancillary
documents unless it shall first receive such advice or
concurrence of the Lenders, or the Required Lenders, as the case
may be, as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under
this Financing Agreement and all ancillary documents in
accordance with a request of the Lenders, or the Required
Lenders, as the case may be, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
5. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or
the Companies describing such Default or Event of Default. In
the event that the Agent receives such a notice, the Agent shall
promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Lenders or Required
Lenders, as the case may be, provided that unless and until the
Agent shall have received such direction, the Agent may in the
interim (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best
interests of the Lenders.
6. Each Lender expressly acknowledges that neither
the Agent nor any of its officers, directors, employees, agents
or attorneys-in-fact has made any representations or warranties
to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Companies, shall be deemed to
constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of the Companies and made its own
decision to enter into this Financing Agreement. Each Lender
also represents that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under the Financing
Agreement and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial
and other condition or creditworthiness of the Companies. The
Agent, however, shall provide the Lenders with copies of all
financial statements, projections and business plans which come
into the possession of the Agent or any of its officers,
employees, agents or attorneys-in-fact.
7. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Companies
and without limiting the obligation of the Companies to do so),
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (including negligence on the
part of the Agent) which may at any time be imposed on, incurred
by or asserted against the Agent in anyway relating to or arising
out of this Financing Agreement or any of the ancillary documents
or any of the documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or
omitted by the Agent under or in connection with any of the
foregoing, provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence
or willful misconduct. The agreements in this Paragraph shall
survive the payment of the obligations.
8. The Agent may make loans to, and generally engage
in any kind of business with, the Companies as though the Agent
were not the Agent hereunder. With respect to its loans made or
renewed by it or loan obligations hereunder as Lender, the Agent
shall have the same rights and powers, duties and liabilities
under this Financing Agreement as any Lender and may exercise the
same as though it was not the Agent and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacities.
9. The Agent may resign as the Agent upon thirty (30)
days' notice to the Lenders and such resignation shall be
effective upon the appointment of a successor Agent. If the
Agent shall resign as Agent, then the Lenders shall appoint a
successor Agent for the Lenders whereupon such successor Agent
shall succeed to the rights, powers and duties of the Agent and
the term "the Agent" shall mean such successor Agent effective
upon its appointment, and the former Agent's rights, powers and
duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of
the parties to this Financing Agreement. After any retiring
Agent's resignation hereunder as the Agent, the provisions of
this Section 15 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent.
10. No amendment or waiver of any provision of this
Financing Agreement or any of the other Loan Documents, nor
consent to any departure by any Company therefrom, shall in any
event be effective unless the same shall be consented to in
writing by the Required Lenders, and then any such waiver or
consent shall be effective only in the specific instance for
which given; provided, however, that no amendment, waiver or
consent shall, unless consented to by all the Lenders in writing,
do any of the following: (a) amend the Financing Agreement to
(i) increase the Line of Credit; (ii) reduce the interest rates;
(iii) reduce or waive (A) any fees in which the Lenders share
hereunder or (B) the repayment of any Obligations due the
Lenders; (iv) extend the maturity of the Obligations; or (v)
alter or amend this Paragraph 10 or the definitions of
Commitment, Eligible Accounts Receivable, Eligible Inventory,
Accounts Receivable Advance Percentage, Inventory Advance
Percentage, Collateral, Ratably or Required Lenders or (C) the
Agent's criteria for determining compliance with such definitions
of eligibility; (b) release Collateral in bulk without a
corresponding reduction in the Obligations to the Lenders; or (c)
intentionally make any Revolving Loan or assist in opening any
Letter of Credit hereunder if after giving effect thereto the
total of Revolving Loans and Letters of Credit hereunder for the
Companies would exceed, at any time, the lesser of the Line of
Credit and one hundred and ten percent (110%) of the Aggregate
Net Availability, or any such "overadvances" would be outstanding
for more than 60 days. In all other respects the Agent is
authorized to take such actions or fail to take such actions if
the Agent, in its reasonable discretion, deems such to be
advisable and in the best interest of the Lenders, including, but
not limited to, the making of an overadvance or the termination
of the Financing Agreement upon the occurrence of an Event of
Default unless it is specifically instructed to the contrary by
the Required Lenders.
11. In the event any Lender's consent is required
pursuant to the provisions of this Financing Agreement and such
Lender does not respond to any request by the Agent for such
consent within ten (10) days after such request is made to such
Lender, such failure to respond shall be deemed a consent. In
addition, in the event that any Lender declines to give its
consent to any such request, it is hereby mutually agreed that
the Agent and/or any other Lender shall have the right (but not
the obligation) to purchase such Lender's rights and obligations
under this Financing Agreement (including, without limitation,
its share of the Lines of Credit, the Term Loans, the Revolving
Loans and its rights and obligations with respect to the Letters
of Credit) for the full amount thereof together with accrued
interest thereon to the date of such purchase.
IN WITNESS WHEREOF, the parties hereto have caused this
Financing Agreement to be executed and delivered by their proper
and duly authorized officers as of the date set forth above.
This Financing Agreement shall take effect as of the date set
forth above after being accepted below by an officer of the Agent
and the Lenders after which, the Agent shall forward to the
Companies a fully executed original for their files.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT,
INC., AS AGENT AND LENDER
By: /s/ Xxxx Xxxxxx
___________________________
Vice President
Read and Agreed to:
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
By: /s/Xxxxxx Xxxxxxxxx
Title: Vice President and Chief Financial Officer
EXHIBIT A
FORM OF REVOLVING LOAN PROMISSORY NOTE
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
XXXXXXX-XXXXXX, INC.,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
XXXXXXX-XXXXXX POTTSTOWN, INC.,
XXXXXXX-XXXXXX TECHNOLOGIES, INC.,
XXXXXXX-XXXXXX TOLEDO, INC.
REVOLVING LOAN PROMISSORY NOTE
October 4, 1996
No. R-1
[AMOUNT]
FOR VALUE RECEIVED, the undersigned, HARVARD
INDUSTRIES, INC., a Florida corporation, THE XXXXXXXX-XXXXXX
CORPORATION, a New Hampshire corporation, XXXXXX AUTOMOTIVE, a
Michigan corporation, XXXXX-ALBION CORPORATION, a Michigan
corporation, XXXXXXX-XXXXXX, INC., a Delaware corporation,
XXXXXXX-XXXXXX GREENEVILLE, INC., a Delaware corporation,
XXXXXXX-XXXXXX POTTSTOWN, INC., a Delaware corporation, XXXXXXX-
XXXXXX TECHNOLOGIES, INC., a Delaware corporation, and XXXXXXX-
XXXXXX TOLEDO, INC., a Delaware corporation (the "Companies"),
promise to pay to the order of [NAME OF LENDER] as Lender (the
"Lender") under a certain Financing Agreement of even date
herewith between THE CIT GROUP/BUSINESS CREDIT, INC., as Agent
and Lender, other lenders party thereto and the Companies (herein
the "Financing Agreement") at the Agent's office located at 1211
Avenue of the Americas, New York, New York, in lawful money of
the United States of America and in immediately available funds,
the principal amount of twenty two million, five hundred thousand
dollars ($22,500,000), or, if less, such other principal amount
advanced to such Company pursuant to Section 3, Paragraph 1 of
the Financing Agreement and then outstanding. The balance of such
Revolving Loan to each such Company will fluctuate as a result of
the daily application of the proceeds of collections of the
Accounts and the making of additional Revolving Loans to each
such Company as described in Section 3. The Revolving Loans may
be borrowed, repaid and reborrowed by the Companies in accordance
with the terms and provisions of the Financing Agreement. A
final payment in an amount equal to the outstanding aggregate
balance of principal and interest remaining unpaid in respect of
the Revolving Loans made to such Company, if any, under this
Revolving Loan Promissory Note as shown on the books and records
of the Agent shall be due and payable upon any termination of the
Financing Agreement.
All capitalized terms used herein shall have the
meaning provided therefor in the Financing Agreement, unless
otherwise defined herein.
Each Company further promises to pay interest at such
office, in like money, on the unpaid principal amount owing
hereunder in respect of Revolving Loans made to such Company from
time to time from the date hereof on the dates and at the rates
specified in Section 8, Paragraph 1 of the Financing Agreement.
If any payment on this Revolving Loan Promissory Note
becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding
Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.
This Revolving Loan Promissory Note is one of the
Revolving Loan Promissory Notes referred to in the Financing
Agreement, and is subject to, and entitled to, all provisions and
benefits thereof and is subject to optional and mandatory
prepayment, in whole or in part, as provided therein.
The date and amount of the advance(s) made hereunder
will be recorded on the separate ledgers maintained by the Agent,
provided that any failure to record any such information on such
ledgers shall not in any manner affect the obligation of each
Company to make payments of principal and interest in accordance
with the terms of this Revolving Loan Promissory Note. The
aggregate unpaid principal amount of all advances made pursuant
hereto may be set forth in the balance column on said schedule or
such ledgers maintained by the Agent. All such advances, whether
or not so recorded, shall be due as part of this Revolving Loan
Promissory Note.
Each Company confirms that any amount received by or
paid to the Agent in connection with the Financing Agreement
and/or any balances standing to its credit on any of its accounts
on the Agent's books under the Financing Agreement may in
accordance with the terms of the Financing Agreement be applied
in reduction of this Revolving Loan Promissory Note, but no
balance or amounts shall be deemed to effect payment in whole or
in part of this Revolving Loan Promissory Note unless the Agent
shall have actually charged such account or accounts for the
purposes of such reduction or payment of this Revolving Loan
Promissory Note.
Upon the occurrence of any one or more of the Events of
Default specified in the Financing Agreement or upon termination
of the Financing Agreement, all amounts then remaining unpaid on
this Revolving Loan Promissory Note may become, or be declared to
be, immediately due and payable as provided in the Financing
Agreement.
Each Company and any and all guarantors, sureties and
endorsers jointly and severally waive grace, demand, presentment
for payment, notice of dishonor or default, notice of intent to
accelerate, notice of acceleration, protest and diligence in
collecting.
This Revolving Loan Promissory Note shall be governed
by, and construed in accordance with, the laws of the state of
New York and the applicable federal laws of the United States.
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
By: __________________________________
Title:
Attest:
Title:
EXHIBIT B
FORM OF TERM LOAN PROMISSORY NOTE
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
TERM LOAN PROMISSORY NOTE
October 4, 1996
T-1
[AMOUNT]
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a
Florida corporation, THE XXXXXXXX-XXXXXX CORPORATION, a New
Hampshire corporation, XXXXXX AUTOMOTIVE, a Michigan corporation,
XXXXX-ALBION CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX
GREENEVILLE, INC., a Delaware corporation, XXXXXXX-XXXXXX
POTTSTOWN, INC., a Delaware corporation, XXXXXXX-XXXXXX
TECHNOLOGIES, INC., a Delaware corporation, and XXXXXXX-XXXXXX
TOLEDO, INC., a Delaware corporation (collectively, the
"Companies"), promise to pay to the order of [NAME OF THE
LENDER], (the "Lender") under a certain Financing Agreement of
even date herewith between The CIT Group/Business Credit, Inc. as
Agent and Lender, the other lenders which become party thereto
and the Companies (herein the "Financing Agreement") at the
Agent's office located at 1211 Avenue of the Americas, New York,
New York, in lawful money of the United States of America and in
immediately available funds, the principal amount set forth
opposite the name of such Company on Schedule A hereto evidencing
the Term Loan made to such Company by the Lender or, if less, the
outstanding aggregate balance of principal and interest remaining
unpaid in respect of the Term Loan of such Company as shown on
the books and records of the Agent, which shall be due and
payable upon the Termination Date.
Capitalized terms used herein and defined in the Financing
Agreement shall have the same meanings as set forth therein
unless otherwise specifically defined herein.
Each Company further agrees to pay interest at said office, in
like money, on the unpaid principal amount owing by such Company
hereunder from time to time from the date hereof on the date and
at the rate specified in Section 8, Paragraph 2 of the Financing
Agreement.
If any payment on this Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day, and with respect to payments
of principal, interest thereon shall be payable at the then applicable
rate during such extension.
This Note is Term Loan Promissory Note referred to in the
Financing Agreement, is subject to, and entitled to, all
provisions and benefits thereof and is subject to optional and
mandatory prepayment, in whole or in part, as provided therein.
Upon the occurrence of any one or more of the Events of Default
specified in the Financing Agreement or upon termination of the
Financing Agreement, all amounts then remaining unpaid on this
Note by each Company may become, or be declared to be, at the
sole election of the Agent, immediately due and payable as
provided in the Financing Agreement.
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
By: _________________________________
Title:
Attest:
Title:
Schedule A
Name of Borrower Term Loan
Harvard Industries, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx Xxxxxx Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Xxxxxxx-Xxxxxx Pottstown, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
EXHIBIT C - ASSIGNMENT AND TRANSFER AGREEMENT
Dated: , 199
Reference is made to the Financing Agreement dated as
of ,
___, 199 (as amended, modified, supplemented and in effect
from time to time, the "Financing Agreement"), among
, a corporation (the "Company"), the
Lenders named therein, and The CIT Group/Business Credit, Inc.,
as Agent (the "Agent"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms
in the Financing Agreement. This Assignment and Transfer
Agreement, between the Assignor (as defined and set forth on
Schedule 1 hereto and made a part hereof) and the Assignee (as
defined and set forth on Schedule 1 hereto and made a part
hereof) is dated as of Effective Date (as set forth on Schedule 1
hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns
to the Assignee without recourse to the Assignor, and the
Assignee hereby irrevocably purchases and assumes from the
Assignor without recourse to the Assignor, as of the Effective
Date, an undivided interest (the "Assigned Interest") in and to
all the Assignor's rights and obligations under the Financing
Agreement as of the date hereof which represents the applicable
percentage interests as are set forth on Schedule 1
(collectively, the "Assigned Facilities" and individually, an
"Assigned Facility"), in a principal amount for each Assigned
Facility as set forth on Schedule 1. The Assignee shall only be
entitled to receive interest and fees with respect to the
Assigned Facilities in the amounts set forth on Schedule 1 or in
the separate agreement between the Assignor and the Assignee,
notwithstanding that the Assignor receives different amounts of
interests and fees with respect to the Assigned Facilities prior
to the execution of the Assignment and Transfer Agreement.
2. The Assignor (i) makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Financing Agreement or any other instrument,
document or agreement executed in conjunction therewith
(collectively the "Ancillary Documents") or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of the Financing Agreement, any Collateral thereunder or
any of the Ancillary Documents furnished pursuant thereto, other
than that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and
clear of any adverse claim and (ii) makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Company or any guarantor or the
performance or observance by the Company or any guarantor of any
of its respective obligations under the Financing Agreement or
any of the Ancillary Documents furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it
is legally authorized to enter into this Assignment and Transfer
Agreement; (ii) confirms that it has received a copy of the
Financing Agreement, together with the copies of the most recent
financial statements of the Company, and such other documents and
information as it has deemed appropriate to make its own credit
analysis; (iii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Financing
Agreement; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
the Financing Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will be bound by the
provisions of the Financing Agreement and will perform in
accordance with its terms all the obligations which by the terms
of the Financing Agreement are required to be performed by it as
Lender; and (vi) if the Assignee is organized under the laws of a
jurisdiction outside the United States, attaches the forms
prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the
Assignee under the Financing Agreement or such other documents as
are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and
Transfer Agreement, such agreement will be delivered to the Agent
for acceptance by it and the Company, effective as of the
Effective Date.
5. Upon such acceptance, from and after the Effective
Date, the Agent shall make all payments in respect of the
assigned interest (including payments of principal, interest,
fees and other amounts) to the Assignee, whether such amounts
have accrued prior to the Effective Date or accrue subsequent to
the Effective Date. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the
Effective Date made by the Agent or with respect to the making of
this assignment directly between themselves.
6. From and after the Effective Date, (i) the
Assignee shall be a party to the Financing Agreement and, to the
extent provided in this Assignment and Transfer Agreement, have
the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent provided in this Assignment and
Transfer Agreement, relinquish its rights and be released from
its obligations under the Financing Agreement.
7. THIS ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly
authorized officers on Schedule 1 hereto.
SCHEDULE 1 TO ASSIGNMENT AND TRANSFER AGREEMENT
Name of Assignor:
Name of Assignee:
Effective Date of Assignment: , 199
Assigned Facilities
Percentage Interest of Revolving Line __________%
of Credit
Percentage Interest of Term Loans __________%
Assignee's Revolving Loan Commitment $_________
Aggregate outstanding Revolving Loans $_________
owing to Assignee
Aggregate outstanding Term Loans owing $_________
to Assignee
Aggregate participations in Letters of $_________
Credit
Interest and Fees
Revolving Loans:
Applicable Base Rate Margin: 1.25%
Applicable Eurodollar Rate Margin: 3.25%
Letter of Credit Guaranty Fee: 2.00%
Revolving Line of Credit Fee: 0.50%
Term Loan
Applicable Term Loan Margin: 1.50%
Loan Facility Fee: 0.75% of Assigned
Facilities
Early Termination Fee:
0.75% of Assigned
Facilities
Accepted:
THE CIT GROUP/BUSINESS
CREDIT, INC., AS AGENT as Assignor
By: By:
Title:
Title:
(the "Company") as Assignee
By: By:
Title:
Title:
FINANCING AGREEMENT
THE CIT GROUP/BUSINESS CREDIT, INC.
AS AGENT AND LENDER
AND
HARVARD INDUSTRIES, INC.,
THE XXXXXXXX-XXXXXX CORPORATION,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
XXXXXXX-XXXXXX, INC.,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
XXXXXXX-XXXXXX POTTSTOWN, INC.,
XXXXXXX-XXXXXX TECHNOLOGIES, INC.,
AND
XXXXXXX-XXXXXX TOLEDO, INC.
(AS BORROWERS)
DATED: OCTOBER 4, 1996
TABLE OF CONTENTS
Page
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Conditions Precedent . . . . . . . . . . . . . . 19
SECTION 3. Revolving Loans . . . . . . . . . . . . . . . . . 22
SECTION 4. Term Loans . . . . . . . . . . . . . . . . . . . 25
SECTION 5. Letters of Credit . . . . . . . . . . . . . . . . 26
SECTION 6. Collateral . . . . . . . . . . . . . . . . . . . 29
SECTION 7. Representations, Warranties and Covenants . . . . 36
SECTION 8. Interest, Fees and Expenses . . . . . . . . . . . 55
SECTION 9. Powers . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10. Events of Default and Remedies . . . . . . . . . 59
SECTION 11. Termination; Prepayment . . . . . . . . . . . . 62
SECTION 12. Guaranty . . . . . . . . . . . . . . . . . . . . 63
SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . 66
SECTION 14. Agreement Between the Lenders . . . . . . . . . 69
SECTION 15. Agency . . . . . . . . . . . . . . . . . . . . . 72
EXHIBITS
Exhibit A - Form of Revolving Loan Promissory Note
Exhibit B - Form of Term Loan Promissory Note
Exhibit C - Form of Assignment and Transfer Agreement
Exhibit D - Form of Pledge Amendment
SCHEDULES
Schedule 1(i) - Excluded Equipment
Schedule 1(ii) - Existing Letters of Credit
Schedule 1(iii) - Existing Liens
Schedule 2(k) - Legal Restraints/Litigation
Schedule 7.1 - Chief Executive Offices and Location of Collateral
Schedule 7.2(e) - Subsidiaries
Schedule 7.2(f) - Litigation
Schedule 7.2(i) - ERISA
Schedule 7.2(r) - Environmental Matters
Schedule 7.2(t) - Insurance
Schedule 7.2(x)(i) - Leases
Schedule 7.2(x)(ii) - Landlord's Consent
Schedule 7.2(y) - Bank Accounts
Schedule 7.2(cc) - Collective Bargaining Agreements
Schedule 7.10(f) - Guarantees
Schedule 7.10(i) - Investments
EXHIBIT D TO FINANCING AGREEMENT
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19__, is
delivered pursuant to Section 6, Paragraph 14 of the Financing
Agreement referred to below. The undersigned hereby agrees that
this Pledge Amendment may be attached to the Financing Agreement,
dated October 4, 1996 (the "Financing Agreement"), among The CIT
Group/Business Credit, Inc., a New York corporation ("CITBC"),
any other party hereafter becoming a Lender hereunder pursuant to
Section 14, Paragraph 9 of the Financing Agreement, CITBC, as
Agent for the Lenders, and Harvard Industries, Inc., a Florida
corporation, The Xxxxxxxx-Xxxxxx Corporation, a New Hampshire
corporation, Xxxxxx Automotive, Inc., a Michigan corporation,
Xxxxx-Albion Corporation, a Michigan corporation, and Xxxxxxx-
Xxxxxx, Inc., a Delaware corporation, Xxxxxxx-Xxxxxx Greeneville,
Inc., a Delaware corporation, Xxxxxxx-Xxxxxx Pottstown, Inc., a
Delaware corporation, Xxxxxxx-Xxxxxx Techologies, Inc., a
Delaware corporation, and Xxxxxxx-Xxxxxx Toledo, Inc., a Delaware
corporation and that the Additional Shares listed on this Pledge
Amendment shall be and become part of the Pledged Collateral
referred to in the Financing Agreement and shall secure all of
the Term Loans, including without limitation any guaranty of the
Term Loans, of the undersigned. The terms defined in the
Financing Agreement are being used herein as therein defined.
[COMPANY]
By:
Title:
Stock
Certificate Number
Issuer Class of Stock No(s). Par Value of Shares
