EXHIBIT 10.2
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SECOND LIEN CREDIT AGREEMENT
Dated as of December 16, 2005
among
BLACK WARRIOR WIRELINE CORP.,
as Borrower,
THE OTHER CREDIT PARTIES FROM TIME TO TIME SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Agent
GE CAPITAL MARKETS, INC.
as Lead Arranger
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TABLE OF CONTENTS
PAGE
1. AMOUNT AND TERMS OF CREDIT .................................................... 1
1.1 CREDIT FACILITY.......................................................... 1
1.2 INTENTIONALLY OMITTED.................................................... 2
1.3 PREPAYMENTS.............................................................. 2
1.4 USE OF PROCEEDS.......................................................... 4
1.5 INTEREST AND APPLICABLE MARGINS.......................................... 4
1.6 INTENTIONALLY OMITTED.................................................... 6
1.7 INTENTIONALLY OMITTED.................................................... 6
1.8 CONTROL AGREEMENTS....................................................... 6
1.9 FEES..................................................................... 6
1.10 RECEIPT OF PAYMENTS ..................................................... 7
1.11 APPLICATION AND ALLOCATION OF PAYMENTS .................................. 7
1.12 LOAN ACCOUNT AND ACCOUNTING ............................................. 7
1.13 INDEMNITY ............................................................... 8
1.14 ACCESS .................................................................. 9
1.15 TAXES ................................................................... 10
1.16 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY ........................... 10
1.17 SINGLE LOAN. ............................................................ 12
2. CONDITIONS PRECEDENT .......................................................... 12
2.1 CONDITIONS TO THE INITIAL LOANS.......................................... 12
3. REPRESENTATIONS AND WARRANTIES ................................................ 15
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW................................. 15
3.2 EXECUTIVE OFFICES, COLLATERAL LOCATIONS, FEIN, ORGANIZATIONAL NUMBER..... 15
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS.................. 15
3.4 FINANCIAL STATEMENTS AND PROJECTIONS..................................... 16
3.5 MATERIAL ADVERSE EFFECT.................................................. 17
3.6 OWNERSHIP OF PROPERTY; LIENS............................................. 17
3.7 LABOR MATTERS............................................................ 18
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND INDEBTEDNESS 18
3.9 GOVERNMENT REGULATION.................................................... 19
3.10 MARGIN REGULATIONS ...................................................... 19
3.11 TAXES ................................................................... 19
3.12 ERISA ................................................................... 20
3.13 NO LITIGATION ........................................................... 21
3.14 BROKERS ................................................................. 21
3.15 INTELLECTUAL PROPERTY ................................................... 21
3.16 FULL DISCLOSURE ......................................................... 21
3.17 ENVIRONMENTAL MATTERS ................................................... 21
3.18 INSURANCE ............................................................... 22
3.19 DEPOSIT AND DISBURSEMENT ACCOUNTS ....................................... 22
3.20 GOVERNMENT CONTRACTS .................................................... 23
3.21 CUSTOMER AND TRADE RELATIONS ............................................ 23
3.22 AGREEMENTS AND OTHER DOCUMENTS .......................................... 23
3.23 SOLVENCY ................................................................ 23
3.24 SUBORDINATED DEBT; FIRST LIEN LOAN. ..................................... 23
3.25 ACQUISITION AGREEMENT ................................................... 24
PAGE
3.26 OFAC .................................................................... 24
3.27 PATRIOT ACT ............................................................. 25
4. FINANCIAL STATEMENTS AND INFORMATION .......................................... 25
4.1 REPORTS AND NOTICES...................................................... 25
4.2 COMMUNICATION WITH ACCOUNTANTS........................................... 25
5. AFFIRMATIVE COVENANTS ......................................................... 25
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS......................... 25
5.2 PAYMENT OF CHARGES....................................................... 26
5.3 BOOKS AND RECORDS........................................................ 26
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL........................ 26
5.5 COMPLIANCE WITH LAWS..................................................... 28
5.6 SUPPLEMENTAL DISCLOSURE.................................................. 28
5.7 INTELLECTUAL PROPERTY.................................................... 29
5.8 ENVIRONMENTAL MATTERS.................................................... 29
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, BAILEE LETTERS.............. 30
5.10 MORTGAGES ............................................................... 30
5.11 FURTHER ASSURANCES ...................................................... 30
5.12 CERTIFICATES OF TITLE ................................................... 31
5.13 POST CLOSING COVENANT ................................................... 31
5.14 NON-CONSOLIDATION ....................................................... 32
6. NEGATIVE COVENANTS ............................................................ 33
6.1 MERGERS, SUBSIDIARIES, ETC............................................... 33
6.2 INVESTMENTS; LOANS AND ADVANCES.......................................... 33
6.3 INDEBTEDNESS............................................................. 34
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS................................ 34
6.5 CAPITAL STRUCTURE AND BUSINESS........................................... 35
6.6 GUARANTEED INDEBTEDNESS.................................................. 35
6.7 LIENS.................................................................... 35
6.8 SALE OF STOCK AND ASSETS................................................. 36
6.9 ERISA.................................................................... 36
6.10 FINANCIAL COVENANTS. .................................................... 36
6.11 HAZARDOUS MATERIALS ..................................................... 36
6.12 SALE-LEASEBACKS ......................................................... 36
6.13 CANCELLATION OF INDEBTEDNESS ............................................ 36
6.14 RESTRICTED PAYMENTS ..................................................... 36
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR ............. 37
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS ................................. 37
6.17 NO SPECULATIVE TRANSACTIONS ............................................. 37
6.18 REAL ESTATE PURCHASES ................................................... 37
6.19 CHANGES RELATING TO SUBORDINATED DEBT; MATERIAL CONTRACTS ............... 37
6.20 LOCATION OF EQUIPMENT ................................................... 38
7. TERM .......................................................................... 38
7.1 TERMINATION.............................................................. 38
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENTS....... 38
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ........................................ 39
8.1 EVENTS OF DEFAULT........................................................ 39
8.2 REMEDIES................................................................. 41
8.3 WAIVERS BY CREDIT PARTIES................................................ 41
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PAGE
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT ........................... 41
9.1 ASSIGNMENT AND PARTICIPATIONS............................................ 41
9.2 APPOINTMENT OF AGENT..................................................... 43
9.3 AGENT'S RELIANCE, ETC.................................................... 44
9.4 GE CAPITAL AND AFFILIATES................................................ 45
9.5 LENDER CREDIT DECISION................................................... 45
9.6 INDEMNIFICATION.......................................................... 45
9.7 SUCCESSOR AGENT.......................................................... 46
9.8 SETOFF AND SHARING OF PAYMENTS........................................... 46
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN CONCERT. 47
9.10 AUTHORIZATION TO EXECUTE LOAN DOCUMENTS ................................. 48
9.11 INTERCREDITOR AGREEMENTS; COLLATERAL DOCUMENTS AND GUARANTY ............. 48
10. SUCCESSORS AND ASSIGNS ........................................................ 49
10.1 SUCCESSORS AND ASSIGNS .................................................. 49
11. MISCELLANEOUS ................................................................. 50
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. .......................... 50
11.2 AMENDMENTS AND WAIVERS .................................................. 50
11.3 FEES AND EXPENSES ....................................................... 51
11.4 NO WAIVER ............................................................... 53
11.5 REMEDIES ................................................................ 53
11.6 SEVERABILITY ............................................................ 53
11.7 CONFLICT OF TERMS ....................................................... 53
11.8 CONFIDENTIALITY ......................................................... 53
11.9 GOVERNING LAW ........................................................... 54
11.10 NOTICES ................................................................. 55
11.11 SECTION TITLES .......................................................... 55
11.12 COUNTERPARTS ............................................................ 55
11.13 WAIVER OF JURY TRIAL .................................................... 55
11.14 PRESS RELEASES AND RELATED MATTERS ...................................... 56
11.15 REINSTATEMENT ........................................................... 56
11.16 ADVICE OF COUNSEL ....................................................... 56
11.17 NO STRICT CONSTRUCTION .................................................. 56
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B - Intentionally Omitted
Annex C (Section 2.1(a)) - Closing Checklist
Annex D (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex E(Section 4.1(b)) - Collateral Reports
Annex F (Section 6.10) - Financial Covenants
Annex G (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex H (Section 11.10) - Notice Addresses
Annex 1 (from Annex A -
Commitments definition) - Commitments as of Closing Date
Exhibit 1.1(b)(i) - Form of Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(b) - Form of Assignment Agreement
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.4(d) - Fair Salable Balance Sheet
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.21 - Customer and Trade Relations
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 3.24 - Subordinated Notes and Subordinated Note Holders
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
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Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
v
This SECOND LIEN CREDIT AGREEMENT (this "Agreement"), dated as of December
16, 2005, among BLACK WARRIOR WIRELINE CORP., a Delaware corporation (the
"Borrower"); the other Credit Parties from time to time signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), as Agent for Lenders (in such capacity, "Agent" or
"Second Lien Agent"), and the Lenders from time to time parties hereto.
RECITALS
WHEREAS, Borrower has requested that Lenders make term loans to Borrower of
up to Twenty-Five Million Dollars ($25,000,000) in the aggregate for the
purpose of funding a portion of the Acquisition (as defined below); and for
these purposes, Lenders are willing to make such term loans to Borrower of up
to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrower has agreed to secure all of its obligations under the Loan
Documents (as defined herein) with a Second Priority Lien in favor of Agent,
for the benefit of Agent and Lenders, upon all of its existing and after-
acquired personal and real property; and
WHEREAS, all subsidiaries of Borrower are willing to guarantee all of the
obligations of Borrower to Agent and Lenders under the Loan Documents and to
grant to Agent, for the benefit of Agent and Lenders, a Second Priority Lien
upon all of such existing and after-acquired personal and real property of such
subsidiaries to secure such guaranty and obligations; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern.
All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facility.
(a) Intentionally Omitted.
(b) Term Loan.
(i) Subject to the terms and conditions hereof, each Term Lender
agrees to make a Loan (collectively, the "Loan") on the Closing Date to
Borrower in an original principal amount equal to such Lender's Commitment. The
obligations of each Term Lender hereunder shall be several and not joint. The
Loan shall be evidenced by promissory notes substantially in the form of
Exhibit 1.1(b)(i) (each a "Note" and collectively the "Notes"), and, except as
provided in Section 1.12, Borrower shall execute and deliver each Note to the
applicable Term Lender. Each Note shall represent the obligation of Borrower to
pay the amount of the applicable Term Lender's Commitment, together with
interest thereon as prescribed in Section 1.5.
(ii) Intentionally Omitted.
(iii) Intentionally Omitted.
(iv) The Borrower shall repay the aggregate outstanding principal
balance of the Loan in full in immediately available funds on the Maturity
Date, if not sooner paid in full. No payment with respect to the Loan may be
reborrowed.
(v) Each payment of principal with respect to the Loan shall be paid
to Agent for the ratable benefit of each Term Lender, ratably in proportion to
each such Term Lender's respective Commitment.
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Conversion/Continuation
or similar notice believed by Agent to be genuine. Agent may assume that each
Person executing and delivering any notice in accordance herewith was duly
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary.
1.2 Intentionally Omitted.
1.3 Prepayments.
(a) Voluntary Prepayments. Borrower may at any time on at least five
(5) days' prior written notice to Agent voluntarily prepay all or part of the
Loan. Any voluntary prepayment of the Loan must be accompanied by payment of
all accrued and unpaid interest on the portion of the Loan being prepaid, plus
the Fee required by Section 1.9(d), plus the payment of any LIBOR funding
breakage costs in accordance with Section 1.13(b).
(b) Mandatory Prepayments.
(i) Immediately upon receipt by any Credit Party of (x) any
working capital, earnings, balance sheet or similar adjustment payment under the
Acquisition Agreement, (y) proceeds of any asset disposition (excluding
proceeds of asset dispositions permitted by
2
Section 6.8) or (z) proceeds from any sale of Stock of any Subsidiary of any
Credit Party, Borrower shall prepay the Loans in an amount equal to all such
adjustment payments or proceeds, net of (A) commissions and other reasonable
and customary transaction costs, fees and expenses properly attributable to
such transaction and payable by such Credit Party in connection therewith (in
each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to
holders of senior Liens on such asset (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for
income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with Section 1.3(c).
(ii) If the Borrower issues any Stock in a public offering, other
than Stock issued upon the exercise of warrants, options or other convertible
securities, or the exchange of the foregoing for Stock, outstanding on the
Closing Date, on or before December 31, 2006, no later than the Business Day
following the date of receipt of the cash proceeds thereof, Borrower shall
prepay the First Lien Loans, the Loans and the Junior Capital in an amount
equal to all such cash proceeds, net of underwriting discounts and commissions
and other reasonable costs paid to non-Affiliates in connection therewith (the
"Net Equity Proceeds"), in the following manner:
(A) 100% of the first $50,000,000 in Net Equity Proceeds
received by the Borrower shall be applied to prepay or redeem the Junior
Capital;
(B) Net Equity Proceeds in excess of $50,000,000 and up to
$75,000,000 received by the Borrower shall be allocated 40% to prepay or redeem
the Junior Capital, 30% to prepay the First Lien Loans and 30% to prepay the
Loans;
(C) Net Equity Proceeds in excess of $75,000,000 and up to
$100,000,000 received by the Borrower shall be allocated 60% to prepay or
redeem the Junior Capital, 20% to prepay the First Lien Loans and 20% to prepay
the Loans; and
(D) Net Equity Proceeds in excess of $100,000,000 received by
the Borrower shall be allocated 80% to prepay or redeem the Junior Capital, 10%
to prepay the First Lien Loans and 10% to prepay the Loans.
To the extent the Junior Capital is paid in full under the foregoing provisions
prior to the prepayment in full of the Loans and Second Lien Loans, the
remaining Net Equity Proceeds shall be allocated 50% to the First Lien Loans
and 50% to the Loans. Notwithstanding the foregoing, if any Event of Default
has occurred and is continuing, and Agent has notified Borrower in writing of
such Event of Default (or First Lien Agent has notified Borrower in writing of
the equivalent event of default under the First Lien Credit Agreement), at the
time the Borrower receives Net Equity Proceeds, 100% of such Net Equity
Proceeds shall be allocated first to First Lien Loans, and then, after the
Discharge of the First Lien Obligations (as defined in the Intercreditor
Agreement), to the Loans, without application of any portion thereof to Junior
Capital. Any Net Equity Proceeds allocated in this clause (ii) to prepay the
Loans shall be applied in accordance with Section 1.3(c).
3
(iii) If any Credit Party issues any Stock (other than Stock
contemplated to be issued in subsection (ii) above) or any Debt at any time
(other than Debt permitted to be incurred under Section 6.3), no later than the
Business Day following the date of receipt of the cash proceeds thereof,
Borrower shall prepay the Loans in an amount equal to all such cash proceeds,
net of underwriting discounts and commissions and other reasonable costs paid
to non-Affiliates in connection therewith. Any such prepayment shall be applied
in accordance with Section 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to Sections 1.3(b) above, and any prepayments from
insurance or condemnation proceeds in accordance with Section 5.4(b) or (c) and
any Mortgages, respectively, shall be applied as follows: first, to Fees and
reimbursable expenses of Agent then due and payable pursuant to any of the Loan
Documents; second, to interest then due and payable on the Loan; and third, to
prepay the principal of the Loan until such Loan shall have been prepaid in
full.
(d) Intentionally Omitted.
(e) No Implied Consent. Nothing in this Section 1.3 shall be construed
to constitute Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.
(f) Notwithstanding anything to the contrary set forth above, the
provisions of this Section 1.3 are subject in all respects to the terms and
conditions of the Intercreditor Agreement.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of the Loan
solely to finance the Acquisition. Disclosure Schedule (1.4) contains a
description of Borrower's sources and uses of funds as of the Closing Date,
including Loans to be made on that date, and a funds flow memorandum detailing
how funds from each source are to be transferred to particular uses.
1.5 Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable benefit of
Lenders, in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the Index Rate plus the
Applicable Index Margin per annum or, at the election of Borrower, the
applicable LIBOR Rate plus the Applicable LIBOR Margin per annum.
The Applicable Margins are as follows:
Applicable Index Margin 6.00%
Applicable LIBOR Margin 7.50%
4
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such interest
and Fees are payable. The Index Rate is a floating rate determined for each
day. Each determination by Agent of interest rates and Fees hereunder shall be
final, binding and conclusive on Borrower, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i), or so long as any other Default or Event of
Default has occurred and is continuing and at the election of Agent (or upon
the written request of Requisite Lenders) confirmed by written notice from
Agent to Borrower, the interest rates applicable to the Loans shall be
increased by two percentage points (2%) per annum above the rates of interest
or the rate of such Fees otherwise applicable hereunder ("Default Rate"), and
all outstanding Obligations shall bear interest at the Default Rate applicable
to such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Default or Event of Default until that Default or Event of Default
is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
Borrower shall have the option to (i) convert at any time all or any part of
outstanding Loans from Index Rate Loans to LIBOR Loans, (ii) convert any LIBOR
Loan to an Index Rate Loan, upon payment of an administrative fee of $250 and,
subject to payment of LIBOR breakage costs in accordance with Section 1.13(b)
if such conversion is made prior to the expiration of the LIBOR Period
applicable thereto, or (iii) continue all or any portion of any Loan as a LIBOR
Loan upon the expiration of the applicable LIBOR Period and the succeeding
LIBOR Period of that continued Loan shall commence on the first day after the
last day of the LIBOR Period of the Loan to be continued. Any Loan or group of
Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $5,000,000 and
integral multiples of $500,000 in excess of such amount. Any such election must
be made by 11:00 a.m. (New York time) on the third Business Day prior to (1)
the end of each LIBOR Period with respect to any LIBOR Loans to be continued as
such, or (2) the date on which Borrower wishes to convert any Index Rate Loan
to a LIBOR Loan for a LIBOR Period designated by Borrower in such election. If
no election is received with respect to a LIBOR Loan by 11:00 a.m. (New York
time) on the third Business Day prior to the end of the LIBOR Period with
respect thereto (or if a Default or an Event of Default has occurred and is
continuing or if the additional conditions precedent set forth in Section 2.2
shall not have been satisfied), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period. Borrower must make such election by
notice to Agent in writing, by telecopy or overnight courier. In the case of
any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit
1.5(e). No Loan may be made as or
5
converted into a LIBOR Loan until the earlier of (i) forty-five (45) days after
the Closing Date or (ii) completion of primary syndication as determined by
Agent.
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that the
rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had
the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. In no event shall the total interest received by
any Lender pursuant to the terms hereof exceed the amount that such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in
the year in which such calculation is made. If, notwithstanding the provisions
of this Section 1.5(f), a court of competent jurisdiction shall finally
determine that a Lender has received interest hereunder in excess of the
Maximum Lawful Rate, Agent shall, to the extent permitted by applicable law,
promptly apply such excess in the order specified in Section 1.11 and
thereafter shall refund any excess to Borrower or as a court of competent
jurisdiction may otherwise order.
1.6 Intentionally Omitted.
1.7 Intentionally Omitted.
1.8 Control Agreements. On or prior to the Closing Date, or such later
date to which Agent shall agree in writing, Borrower and its Subsidiaries will
have entered into control agreements in form and substance reasonably
satisfactory to Agent with respect to all deposit and securities accounts
maintained by Borrower and its Subsidiaries and in which the First Lien Agent
has a First Priority Lien. Borrower will establish and maintain until the
Termination Date the cash management systems required under the First Lien
Credit Agreement.
1.9 Fees.
(a) Intentionally Omitted.
(b) If Borrower (1) pays after acceleration or (2) prepays all or any
portion of the Loan, whether voluntarily or involuntarily and whether before or
after acceleration of the Obligations or if the Commitments are otherwise
terminated, Borrower shall pay to Agent, for the benefit of Lenders as
liquidated damages and compensation for the costs of being prepared to make
funds available hereunder an amount equal to the Applicable Percentage (as
defined below) multiplied by the sum of the principal amount of the Loan paid
after
6
acceleration or prepaid. As used herein, the term "Applicable Percentage" shall
mean (x) two percent (2.00%), in the case of a prepayment on or prior to the
first anniversary of the Closing Date, (y) one percent (1.00%), in the case of
a prepayment after the first anniversary of the Closing Date but on or prior to
the second anniversary thereof, and (z) one half of one percent (0.50%), in the
case of a prepayment after the second anniversary of the Closing Date but on or
prior to the third anniversary thereof. The Credit Parties agree that the
Applicable Percentages are a reasonable calculation of Lenders' lost profits in
view of the difficulties and impracticality of determining actual damages
resulting from an early termination of the Commitments. Notwithstanding the
foregoing, no prepayment fee shall be payable by Borrower upon a mandatory
prepayment made pursuant to Sections 1.3(b)(i) or Section 1.16(c); provided
that in the case of prepayments made pursuant to Sections 1.3(b)(i), the
transaction giving rise to the applicable prepayment is expressly permitted
under Section 6.
1.10 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. Payments
received after 2:00 p.m. New York time on any Business Day or on a day that is
not a Business Day shall be deemed to have been received on the following
Business Day.
1.11 Application and Allocation of Payments. So long as no Default or
Event of Default has occurred and is continuing, (i) payments matching specific
scheduled payments then due shall be applied to those scheduled payments; (ii)
voluntary prepayments shall be applied as set forth in Section 1.3(a); and
(iii) mandatory prepayments shall be applied as set forth in Sections 1.3(c).
All payments and prepayments shall be applied ratably to the Loan held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when a Default or Event of Default has occurred and is
continuing or following the Maturity Date, Borrower hereby irrevocably waives
the right to direct the application of any and all payments received from or on
behalf of Borrower, and Borrower hereby irrevocably agrees that the Requisite
Lenders shall have the continuing exclusive right to instruct the Agent to
apply any and all such payments against the Obligations as the Requisite
Lenders may deem advisable notwithstanding any previous entry by Agent in the
Loan Account or any other books and records. In the absence of a specific
determination by Requisite Lenders with respect thereto, payments shall be
applied to amounts then due and payable in the following order: (1) to Fees and
Agent's expenses reimbursable hereunder; (2) to expenses of Lenders
reimbursable under Section 11.3; (3) to interest on the Loans ratably to each
Lender based on its Pro Rata Share; (4) to principal payments on the Loans
ratably to each Lender based on its Pro Rata Share; and (5) to all other
Obligations. Lenders acknowledge and agree that unless the Requisite Lenders
have instructed Agent in writing of a specific determination as to how proceeds
from a payment should be allocated at least one Business Day prior to Agent
having received such payment, Agent shall be entitled to assume that no such
specific determinations are being made by the Requisite Lenders.
1.12 Loan Account and Accounting. Agent shall maintain a loan account
(the "Loan Account") on its books to record: the Loan, all payments made by
Borrower, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other
7
Obligations. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Agent and Lenders by Borrower; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect Borrower's duty to pay the Obligations. Agent shall render to
Borrower a monthly accounting of transactions with respect to the Loans setting
forth the balance of the Loan Account for the immediately preceding month.
Unless Borrower notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within
thirty (30) days after the date thereof, each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive on Borrower in
all respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted by any third
party, any Credit Party or any Subsidiary of any Credit Party against or
incurred by any such Indemnified Person as the result of credit having been
extended, suspended or terminated under this Agreement and the other Loan
Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no
such Credit Party shall be liable for any indemnification to an Indemnified
Person to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense results from that Indemnified Person's gross
negligence or willful misconduct (as finally determined by a court of competent
jurisdiction). NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
8
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing
of, or shall request a termination of, any borrowing of, conversion into or
continuation of, LIBOR Loans after Borrower has given notice requesting the
same in accordance herewith; or (iv) Borrower shall fail to make any prepayment
of a LIBOR Loan after Borrower has given a notice thereof in accordance
herewith, then Borrower shall indemnify and hold harmless each Lender from and
against all losses, costs and expenses resulting from or arising from any of
the foregoing. Such indemnification shall include any loss (including loss of
margin) or expense arising from the reemployment of funds obtained by it or
from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable hereunder. As promptly
as practicable under the circumstances, each Lender shall provide Borrower with
its written calculation of all amounts payable pursuant to this Section
1.13(b), and such calculation shall be binding on the parties hereto unless
Borrower shall object in writing within ten (10) Business Days of receipt
thereof, specifying the basis for such objection in detail.
1.14 Access. Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon one (1) Business Day's prior
notice as frequently as Agent determines to be appropriate: (a) provide Agent
and any of its officers, employees and agents access to its properties,
facilities, advisors and employees (including officers) of each Credit Party
and to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If a Default or
Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent, each Lender and their representatives
(including operational consultants), at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrower shall provide Agent and each Lender with access to its suppliers and
customers. Each Credit Party shall make available to Agent and its counsel, as
quickly as is possible under the circumstances, originals or copies of all
books and records that Agent may reasonably request. Each Credit Party shall
deliver any document or instrument necessary for Agent, as it may from time to
time reasonably request, to obtain records from any service bureau or other
Person that maintains records for such Credit Party, and shall maintain
duplicate records
9
or supporting documentation on media, including computer tapes and discs owned
by such Credit Party. Agent will give Lenders at least five (5) days' prior
written notice of regularly scheduled audits and will provide each Lender with
a copy of all audit reports it receives, in form and substance reasonably
satisfactory to the Requisite Lenders. Representatives of other Lenders may
accompany Agent's representatives on regularly scheduled audits at no charge to
Borrower.
1.15 Taxes.
(a) Any and all payments by Borrower hereunder (including any payments
made pursuant to Section 1.13) or under the Notes shall be made, in accordance
with this Section 1.15, free and clear of and without deduction for any and all
present or future Taxes. If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder (including any sum
payable pursuant to Section 1.13) or under the Notes, (i) the sum payable shall
be increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 1.15) Agent or Lenders, as applicable, receive an amount equal to
the sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof. Agent and Lenders shall not be obligated to return
or refund any amounts received pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of demand therefor, pay Agent and
each Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under this
Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"Certificate of Exemption"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person fails to deliver a Certificate of Exemption in
advance of becoming a Lender.
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy,
10
reserve requirements or similar requirements or compliance by any Lender with
any request or directive regarding capital adequacy, reserve requirements or
similar requirements (whether or not having the force of law), in each case,
adopted after the Closing Date, from any central bank or other Governmental
Authority increases or would have the effect of increasing the amount of
capital, reserves or other funds required to be maintained by such Lender and
thereby reducing the rate of return on such Lender's capital as a consequence
of its obligations hereunder, then Borrower shall from time to time upon demand
by such Lender (with a copy of such demand to Agent) pay to Agent, for the
account of such Lender, additional amounts sufficient to compensate such Lender
for such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender to
Borrower and to Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower and
to Agent by such Lender, shall be conclusive and binding on Borrower for all
purposes, absent manifest error. Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, the affected Lender shall, to the
extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this Section 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to
agree to make or to make or to continue to fund or maintain any LIBOR Loan,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Loan at another branch or office of that Lender without, in that
Lender's opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Borrower
through Agent, (i) the obligation of such Lender to agree to make or to make or
to continue to fund or maintain LIBOR Loans shall terminate and (ii) Borrower
shall forthwith prepay in full all outstanding LIBOR Loans owing by Borrower to
such Lender, together with interest accrued thereon, unless Borrower, within
five (5) Business Days after the delivery of such notice and demand, converts
all LIBOR Loans into Index Rate Loans.
(d) Within fifteen (15) days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or
11
increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrower
may, at its option, notify Agent and such Affected Lender of its intention to
replace the Affected Lender. So long as no Default or Event of Default has
occurred and is continuing, Borrower, with the consent of Agent, may obtain, at
Borrower's expense, a replacement Lender ("Replacement Lender") for the
Affected Lender, which Replacement Lender must be reasonably satisfactory to
Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of their intention to do so, the Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale;
provided, that Borrower shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrower shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts within fifteen (15) days following its receipt of Borrower's notice of
intention to replace such Affected Lender. Furthermore, if Borrower gives a
notice of intention to replace and does not so replace such Affected Lender
within ninety (90) days thereafter, Borrower's rights under this Section
1.16(d) shall terminate with respect to such Affected Lender and Borrower shall
promptly pay all increased costs or additional amounts demanded by such
Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
1.17 Single Loan. All Loans to Borrower and all of the other Obligations
of Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of Borrower secured, until the Termination
Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated to
make any Loan on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or
provided for in a manner satisfactory to Lenders, or waived in writing by
Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, each other
Credit Party, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Lenders shall reasonably request
in connection with the transactions contemplated by this Agreement and the
other Loan Documents, including all those listed in the Closing Checklist
attached hereto as Annex C.
(b) Intentionally Omitted.
(c) Approvals. Agent shall have received (i) evidence that the Credit
Parties have obtained all required consents and approvals of all Persons
including all requisite Governmental Authorities, to the execution, delivery
and performance of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate
affirming that no such consents or approvals are required.
12
(d) Opening Availability. The Eligible Accounts (as defined in the
First Lien Credit Agreement) supporting the initial Revolving Credit Advance
(as defined in the First Lien Credit Agreement) and the amount of the Reserves
(as defined in the First Lien Credit Agreement) to be established on the
Closing Date shall be sufficient in value, as determined by Agent, to provide
Borrower with Borrowing Availability (as defined in the First Lien Credit
Agreement), after giving effect to the initial Revolving Credit Advance made to
Borrower and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid consistently with Borrower's historical
practice, and expenses and liabilities being paid in the ordinary course of
business and without acceleration of sales and without any deterioration of
working capital) of at least $7,000,000.
(e) Payment of Fees. Borrower shall have reimbursed Agent for all
fees, costs and expenses of closing presented as of the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party (including without limitation, with respect to the First Lien Loan
and the Subordinated Notes) shall be acceptable to Lenders in their sole
discretion; without limitation of the foregoing, the maturity of all
Subordinated Notes outstanding on the Closing Date shall have been extended to
no earlier than ninety (90) days after the Maturity Date, with no payments of
interest or principal prior to such extended maturity date, and the Borrower
shall have received at least $31,000,000 in proceeds from the First Lien Loans.
(g) Due Diligence. Agent shall have completed its business,
environmental and legal due diligence with respect to the transactions
contemplated hereby and by the Related Transaction Documents, including (i)
asset appraisals, environmental audits, collateral audit, updates to existing
asset appraisals, environmental audits and collateral audits, and to the extent
requested by the Agent, a quality of earnings review of Borrower, Bobcat and
its Subsidiaries, and (ii) background checks on (x) each Credit Party and each
of its Affiliates and (y) the CEO of each Credit Party and each of its
Affiliates, in each case with results reasonably satisfactory to Agent.
(h) Consummation of Related Transactions. Agent shall have received
fully executed copies of the Acquisition Agreement and final and complete
copies of each of the other Related Transactions Documents, each of which shall
be in full force and effect in form and substance reasonably satisfactory to
Agent. The Acquisition and the other Related Transactions shall have been
consummated in accordance with the terms of the Acquisition Agreement and the
other Related Transactions Documents. The "Consideration" (as such term is
defined in the Acquisition Agreement) will not exceed $52,300,000. Agent shall
have received fully executed copies of all settlement agreements (including
without limitation the Settlement Agreement) and releases, resolving and
releasing any and all claims of Centre Partners against any Credit Party,
together with evidence that all conditions precedent thereto have been
satisfied.
(i) Minimum EBITDA. Agent shall have received evidence that the
Borrower and its Subsidiaries on a consolidated basis shall have EBITDA for the
12-month
13
period ending on September 30, 2005, assuming the Acquisition and the other
transactions contemplated hereby had occurred on October 1, 2004, of not less
than $26,000,000.
(j) Maximum Leverage. Agent shall have received evidence that the
Borrower and its Subsidiaries on a consolidated bases shall have (i) a Leverage
Ratio for the 12-month period ending on September 30, 2005, assuming the
Acquisition and the other transactions contemplated hereby had occurred on
October 1, 2004, of not more than 2.5:1.0 and (ii) a First Tier Leverage Ratio
for the 12-month period ending on September 30, 2005, assuming the Acquisition
and the other transactions contemplated hereby had occurred on October 1, 2004,
of not more than 1.5:1.0.
(k) Other. All representations and warranties by the Credit Parties
shall be true and correct as of the Closing Date, and no Default or Event of
Default shall have occurred and be continuing.
Each Lender, by delivering its signature page to this Agreement or to any
Assignment Agreement, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document, the Intercreditor Agreement,
the Subordination Agreements, and each other document set forth above or listed
on Annex C required to be approved by Agent, Requisite Lenders or Lenders, as
applicable on the Closing Date.
2.2 Further Conditions to Each LIBOR Rollover. Except as otherwise expressly
provided herein, no Lender shall be obligated to convert or continue any Loan as
a LIBOR Loan if, as of the date thereof:
(a) (i) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect as of such date,
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted or expressly
contemplated by this Agreement and (ii) Requisite Lenders have determined not
to convert or continue any Loan as LIBOR Loan as a result of the fact that such
warranty or representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Lenders, and the
Requisite Lenders have determined not to convert or continue any Loan as a
LIBOR Loan as a result of the fact that such event or circumstance has
occurred; or
(c) any Default or Event of Default has occurred and is continuing,
and Requisite Lenders shall have determined not to convert or continue any Loan
as a LIBOR Loan as a result of that Default or Event of Default.
The request and acceptance by Borrower of the conversion or continuation of any
Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the date
thereof, (i) a representation and warranty by Borrower that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower of the
granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
14
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Credit Parties executing this
Agreement, jointly and severally, make the following representations and
warranties to Agent and each Lender with respect to all Credit Parties, each
and all of which shall survive the execution and delivery of this Agreement (it
being understood and agreed that the representations and warranties made on the
Closing Date are deemed to be made concurrently with the consummation of the
Acquisition and the other Related Transactions and the borrowings under the
First Lien Credit Agreement contemplated hereby):
3.1 Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization set forth in Disclosure Schedule
(3.1); (b) is duly qualified to conduct business and is in good standing in
each other jurisdiction where its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses, damages or liabilities in
excess of $50,000; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (d) subject to
specific representations regarding Environmental Laws, has all material
licenses, permits, consents or approvals from or by, and has made all material
filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN, Organizational Number. As
of the Closing Date, each Credit Party's name as it appears in official filings
in its state of incorporation or organization, state of incorporation or
organization, organization type, organization number, if any, issued by the
state of incorporation or organization, the federal employer identification
number and the current location of each Credit Party's chief executive office
and the warehouses and premises at which any Collateral is located are set
forth in Disclosure Schedule (3.2), and, except as set forth in Disclosure
Schedule (3.2) none of such locations has changed within the 12 months
preceding the Closing Date.
3.3 Corporate Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within
such Person's power; (b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action; (c) do not contravene
any provision of such Person's charter, bylaws or partnership or operating
agreement as applicable; (d) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or
15
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Agent, on behalf of itself and Lenders, pursuant
to the Loan Documents and the First Lien Credit Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 2.1(c), all of which will have been
duly obtained, made or complied with prior to the Closing Date. Each of the
Loan Documents shall be duly executed and delivered by each Credit Party that
is a party thereto and each such Loan Document shall constitute a legal, valid
and binding obligation of such Credit Party enforceable against it in
accordance with its terms.
3.4 Financial Statements and Projections. Except for the Projections and the
Fair Salable Balance Sheet, all Financial Statements concerning Borrower and
its Subsidiaries that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes, a statement of owners' equity and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule (3.4(a)) have been delivered on the date
hereof:
(i) The audited balance sheets at December 31, 2003 and 2004 and the
related statements of income and cash flows of Borrower for the Fiscal Years
then ended, certified by the Chief Financial Officer of Borrower.
(ii) The audited consolidated and consolidating balance sheets at
June 30, 2004 and 2005 and the related statements of income and cash flows of
Bobcat and its Subsidiaries for the fiscal years then ended.
(iii) The unaudited balance sheet(s) at September 30, 2005 and the
related statement(s) of income and cash flows of Borrower for the three Fiscal
Quarters then ended.
(iv) The unaudited consolidated and consolidating balance sheet(s)
at September 30, 2005 and the related statement(s) of income and cash flows of
Bobcat and its Subsidiaries for the one fiscal quarter then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and attached
hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower giving pro
forma effect to the Related Transactions, was based on the unaudited balance
sheet of Borrower dated September 30, 2005 and the unaudited consolidated
balance sheet of Bobcat and its Subsidiaries dated September 30, 2005, and
was prepared in accordance with GAAP, with only such adjustments thereto as
would be required in accordance with GAAP.
16
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by
Borrower in light of the past operations of its businesses, but including
future payments of known contingent liabilities reflected on the Fair
Salable Balance Sheet, and reflect projections for the three year period
beginning on January 1, 2006 on a month-by-month basis for Fiscal Year 2006,
and on an annual basis for Fiscal Years 2007 and 2008. The Projections are
based upon the same accounting principles as those used in the preparation
of the financial statements described above and the estimates and
assumptions stated therein, all of which Borrower believes to be reasonable
and fair in light of current conditions and current facts known to Borrower
and, as of the Closing Date, reflect Borrower's good faith and reasonable
estimates of the future financial performance of Borrower and of the other
information projected therein for the period set forth therein.
(d) Fair Salable Balance Sheet. The Fair Salable Balance Sheet delivered
on the date hereof and attached hereto as Disclosure Schedule (3.4(d)) was
prepared by Borrower on the same basis as the Pro Forma, except that
Borrower's assets are set forth therein at their fair salable values on a
going concern basis and the liabilities set forth therein include all
contingent liabilities of Borrower stated at the reasonably estimated
present values thereof.
3.5 Material Adverse Effect. Between December 31, 2004 and the Closing Date
with respect to Borrower, and between June 30, 2005 and the Closing Date with
respect to all other Credit Parties: (a) no Credit Party has incurred any
obligations, contingent or noncontingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments that are not
reflected in the Pro Forma and that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract,
lease or other agreement or instrument has been entered into by any Credit
Party or has become binding upon any Credit Party's assets and no law or
regulation applicable to any Credit Party has been adopted that has had or
could reasonably be expected to have a Material Adverse Effect, and (c) no
Credit Party is in default and to the best of Borrower's knowledge no third
party is in default under any material contract, lease or other agreement or
instrument, that alone or in the aggregate could reasonably be expected to have
a Material Adverse Effect. Between December 31, 2004 and the Closing Date with
respect to Borrower, and between June 30, 2005 and the Closing Date with
respect to all other Credit Parties, no event has occurred, that alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real estate
("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of the real
property owned, leased, subleased, or used by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and copies of all such
leases or a summary of terms thereof reasonably satisfactory to Agent have been
delivered to Agent. Disclosure Schedule (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets. As
17
of the Closing Date, none of the properties and assets of any Credit Party are
subject to any Liens other than (i) Permitted Encumbrances, (ii) the Liens
securing the First Lien Loan and (iii) subject to the Subordination Agreements,
the Liens securing the Subordinated Debt, and there are no facts, circumstances
or conditions known to any Credit Party that may result in any Liens (including
Liens arising under Environmental Laws) other than (i) Permitted Encumbrances,
(ii) the Liens securing the First Lien Loan and (iii) subject to the
Subordination Agreements, the Liens securing the Subordinated Debt. Each Credit
Party has received all deeds, assignments, waivers, consents, nondisturbance
and attornment or similar agreements, bills of sale and other documents, and
has duly effected all recordings, filings and other actions necessary to
establish, protect and perfect such Credit Party's right, title and interest in
and to all such Real Estate and other properties and assets. Disclosure
Schedule (3.6) also describes any purchase options, rights of first refusal or
other similar contractual rights pertaining to any Real Estate. As of the
Closing Date, no portion of any Credit Party's Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Closing Date, all material permits required to
have been issued or appropriate to enable the Real Estate to be lawfully
occupied and used for all of the purposes for which it is currently occupied
and used have been lawfully issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date (a) no strikes or other material
labor disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) all hours worked by and payments made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matters; (c) all
payments due from any Credit Party for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Credit Party; (d)
except as set forth in Disclosure Schedule (3.7), no Credit Party is a party to
or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and true and complete copies of any agreements described on
Disclosure Schedule (3.7) have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party pending or, to any Credit
Party's knowledge, threatened by any labor union or group of employees; (f)
there are no representation proceedings pending or, to any Credit Party's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) except as set forth in Disclosure Schedule
(3.7), there are no material complaints or charges against any Credit Party
pending or, to the knowledge of any Credit Party, threatened to be filed with
any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned
by each of the Stockholders and in the amounts set forth in Disclosure Schedule
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(3.8). Except as set forth in Disclosure Schedule (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock
or other equity securities of its Subsidiaries. All outstanding Indebtedness
and Guaranteed Indebtedness of each Credit Party as of the Closing Date (except
for the Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940. No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, or any other federal or
state statute that restricts or limits its ability to incur Indebtedness or to
perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Credit Party owns any Margin Stock, and none of the
proceeds of the Loans or other extensions of credit under this Agreement will
be used, directly or indirectly, for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take
or permit to be taken any action that might cause any Loan Document to violate
any regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges
have been paid prior to the date on which any fine, penalty, interest or late
charge may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other
amounts being contested in accordance with Section 5.2(b). Proper and accurate
amounts have been withheld by each Credit Party from its respective employees
for all periods in full and complete compliance with all applicable federal,
state, local and foreign laws and such withholdings have been timely paid to
the respective Governmental Authorities. Disclosure Schedule (3.11) sets forth
as of the Closing Date those taxable years for which any Credit Party's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described in Disclosure Schedule (3.11), no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or
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other document extending, or having the effect of extending, the period for
assessment or collection of any Charges. None of the Credit Parties and their
respective predecessors are liable for any Charges: (a) under any agreement
(including any tax sharing agreements) or (b) to each Credit Party's knowledge,
as a transferee. As of the Closing Date, no Credit Party has agreed or been
requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which would have a Material Adverse
Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists (i) all ERISA Affiliates and (ii)
all Plans and separately identifies all Pension Plans, including Title IV
Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest form IRS/DOL 5500-series for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has
been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under
the provisions of Section 501 of the IRC, and nothing has occurred that
would cause the loss of such qualification or tax-exempt status. Each Plan
is in compliance with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104-23. No Credit
Party or any ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of
ERISA or the terms of any such Plan. No Credit Party or any ERISA Affiliate
has engaged in a "prohibited transaction," as defined in Section 406 of
ERISA and Section 4975 of the IRC, in connection with any Plan, that would
subject any Credit Party to a material tax on prohibited transactions
imposed by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims
for benefits in the normal course), sanctions, actions or lawsuits, asserted
or instituted against any Plan or any Person as fiduciary or sponsor of any
Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably
expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years no
Title IV Plan of any Credit Party or ERISA Affiliate has been terminated,
whether or not in a "standard termination" as that term is used in Section
4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or any
ERISA Affiliate (determined at any time within the last five years) with
Unfunded Pension Liabilities been transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of any Credit
Party or ERISA Affiliate (determined at such time); (vi) except in the case
of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of fair market value of the assets of
any Plan measured on the basis of fair market value as of the latest
valuation date of any Plan; and (vii) no liability under any Title IV Plan
has been satisfied with the purchase of a contract from an insurance company
that is not rated AAA by
20
the Standard & Poor's Corporation or an equivalent rating by another
nationally recognized rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation"), (a) that
challenges any Credit Party's right or power to enter into or perform any of
its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could be reasonably be expected to have a
Material Adverse Effect. No Litigation is pending or threatened against any
Credit Party by Centre Partners. Except as set forth on Disclosure Schedule
(3.13), as of the Closing Date there is no Litigation pending or, to any Credit
Party's knowledge, threatened, that seeks damages in excess of $100,000 or
injunctive relief against, or alleges criminal misconduct of, any Credit Party.
3.14 Brokers. No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans
or the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property. As of the Closing Date, each Credit Party owns
or has rights to use all Intellectual Property necessary to continue to conduct
its business as now or heretofore conducted by it or proposed to be conducted
by it, and each Patent, Trademark, Copyright and License is listed, together
with application or registration numbers, as applicable, in Disclosure Schedule
(3.15). Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect. Except as set forth in Disclosure Schedule
(3.15), no Credit Party is aware of any infringement claim by any other Person
with respect to any Intellectual Property.
3.16 Full Disclosure. No information contained in this Agreement, any of the
other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party to Agent or any
Lender pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. The Liens
granted to Agent, on behalf of itself and Lenders, pursuant to the Collateral
Documents will at all times be fully perfected Second Priority Liens in and to
the Collateral described therein, subject, as to priority, only to Permitted
Encumbrances and Liens securing the First Lien Loan (and not Liens securing any
Subordinated Debt).
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the Closing
Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such
21
contamination that would not adversely impact the value or marketability of
such Real Estate and that would not result in Environmental Liabilities,
that could reasonably be expected to exceed $100,000; (ii) no Credit Party
has caused or suffered to occur any Release of Hazardous Materials on, at,
in, under, above, to, from or about any of its Real Estate; (iii) the Credit
Parties are and have been in compliance with all Environmental Laws, except
for such noncompliance that would not result in Environmental Liabilities
which could reasonably be expected to exceed $100,000; (iv) the Credit
Parties have obtained, and are in compliance with, all Environmental Permits
required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except
where the failure to so obtain or comply with such Environmental Permits
would not result in Environmental Liabilities that could reasonably be
expected to exceed $100,000, and all such Environmental Permits are valid,
uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any
Environmental Liabilities of such Credit Party which could reasonably be
expected to exceed $100,000, and no Credit Party has permitted any current
or former tenant or occupant of the Real Estate to engage in any such
operations; (vi) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $25,000 or
injunctive relief against, or that alleges criminal misconduct by, any
Credit Party; (vii) no notice has been received by any Credit Party
identifying it as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, and to the knowledge
of the Credit Parties, there are no facts, circumstances or conditions that
may result in any Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes; and (viii) the
Credit Parties have provided to Agent copies of all existing environmental
reports, reviews and audits and all written information pertaining to actual
or potential Environmental Liabilities, in each case relating to any Credit
Party.
(b) Each Credit Party hereby acknowledges and agrees that neither Agent
nor any Lender (i) is now, or has ever been, in control of any of the Real
Estate or any Credit Party's affairs, or (ii) has the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit
Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance policies of
any nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the terms of each such policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19) lists all
banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Closing Date, including any Disbursement
Accounts, and such Schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number
therefor.
22
3.20 Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state or local law.
3.21 Customer and Trade Relations. Except as set forth in Disclosure
Schedule (3.21), as of the Closing Date, there exists no actual or, to the
knowledge of any Credit Party, threatened termination or cancellation of, or
any material adverse modification or change in the business relationship of any
Credit Party with any customer or group of customers whose purchases during the
preceding 12 months caused them to be ranked among the ten largest customers of
such Credit Party; or the business relationship of any Credit Party with any
supplier material to its operations.
3.22 Agreements and Other Documents. As of the Closing Date, each Credit
Party has provided to Agent or its counsel, on behalf of Lenders, accurate and
complete copies (or summaries) of all of the following agreements or documents
to which it is subject and each of which is listed in Disclosure Schedule
(3.22): supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could be reasonably likely to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights
or options to purchase equity securities of such Credit Party.
3.23 Solvency. Both before and after giving effect to (a) the Loans to be
made or incurred on the Closing Date or such other date as Loans requested
hereunder are made or incurred; (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of Borrower; (c) the Acquisition and the
consummation of the other Related Transactions; and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Credit Party is
and will be Solvent.
3.24 Subordinated Debt; First Lien Loan. (A) As of the Closing Date,
Borrower has provided to Agent or its counsel, on behalf of Lenders, accurate
and complete copies of all outstanding Subordinated Notes (including all
schedules, exhibits, amendments, supplements, modifications, assignments,
consents and all other documents delivered pursuant thereto or in connection
therewith), each of which is listed in Disclosure Schedule (3.24). Disclosure
Schedule (3.24) also sets forth a true and correct list of all Subordinated
Note Holders. Borrower had the corporate power and authority to incur the
Indebtedness evidenced by the Subordinated Notes and to enter into the consent
or amendment to the Subordinated Notes contemplated as a condition to the
closing of this Credit Agreement. Each of the Subordination Agreements is
enforceable against the holders of the Subordinated Notes signatory thereto by
Agent and Lenders. All Obligations constitute Senior Indebtedness entitled to
the benefits of the
23
subordination provisions contained in the Subordination Agreements. Borrower
acknowledges that Agent and each Lender are entering into this Agreement and
are extending the Commitments in reliance upon the subordination provisions
contained in the Subordination Agreements and this Section 3.24.
(B) As of the Closing Date, Borrower has provided to Agent or its counsel,
on behalf of Lenders, accurate and complete copies of the First Lien Credit
Documents (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto
or in connection therewith). Borrower has the corporate power and authority to
incur the First Lien Loan and to enter into and perform the First Lien Credit
Documents. The Intercreditor Agreement is enforceable by Agent against the
lenders under the First Lien Credit Agreement and the First Lien Agent.
Borrower acknowledges that Agent and each Lender are entering into this
Agreement and are extending the Commitments in reliance upon the lien
subordination provisions contained in the Intercreditor Agreement and this
Section 3.24.
3.25 Acquisition Agreement. As of the Closing Date, Borrower has delivered
to Agent a complete and correct copy of the Acquisition Agreement (including
all schedules, exhibits, amendments, supplements, modifications, assignments
and all other documents delivered pursuant thereto or in connection therewith).
No Credit Party and no other Person party thereto is in default in the
performance or compliance with any provisions thereof. The Acquisition
Agreement complies with, and the Acquisition has been consummated in accordance
with, all applicable laws. The Acquisition Agreement is in full force and
effect as of the Closing Date and has not been terminated, rescinded or
withdrawn. All requisite approvals by Governmental Authorities having
jurisdiction over any Seller, any Credit Party and other Persons referenced
therein, with respect to the transactions contemplated by the Acquisition
Agreement, have been obtained, and no such approvals impose any conditions to
the consummation of the transactions contemplated by the Acquisition Agreement
or to the conduct by any Credit Party of its business thereafter. To the best
of each Credit Party's knowledge, none of the Sellers' representations or
warranties in the Acquisition Agreement contain any untrue statement of a
material fact or omit any fact necessary to make the statements therein not
misleading. Each of the representations and warranties given by each applicable
Credit Party in the Acquisition Agreement is true and correct in all material
respects. Notwithstanding anything contained in the Acquisition Agreement to
the contrary, such representations and warranties of the Credit Parties are
incorporated into this Agreement by this Section 3.25 and shall, solely for
purposes of this Agreement and the benefit of Agent and Lenders, survive the
consummation of the Acquisition.
3.26 OFAC. No Credit Party (i) is a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions
prohibited by Section 2 of such executive order, or is otherwise associated
with any such person in any manner violative of Section 2, or (iii) is a person
on the list of Specially Designated Nationals and Blocked Persons or subject to
the limitations or
24
prohibitions under any other U.S. Department of Treasury's Office of Foreign
Assets Control regulation or executive order.
3.27 Patriot Act. Each Credit Party is in compliance, in all material
respects, with the (i) the Trading with the Enemy Act, as amended, and each of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation
or executive order relating thereto, and (ii) the Uniting And Strengthening
America By Providing Appropriate Tools Required To Intercept And Obstruct
Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will
be used, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and
in the manner set forth in Annex D.
(b) Each Credit Party executing this Agreement hereby agrees that, from
and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the various Collateral
Reports (including Borrowing Base Certificates (as defined in the First Lien
Credit Agreement)) at the times, to the Persons and in the manner set forth
in Annex D.
4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) Agent and (b) so long as an Event of Default has
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants, including Xxxxx Xxxxxxxx LLP, and
authorizes and, at Agent's request, shall instruct those accountants and
advisors to disclose and make available to Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party (including copies of any issued
management letters) with respect to the business, financial condition and other
affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit Party
shall: do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and its rights and franchises;
continue to conduct its business substantially
25
as now conducted or as otherwise permitted hereunder; at all times maintain,
preserve and protect all of its assets and properties used or useful in the
conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and transact business only in such corporate and trade
names as are set forth in Disclosure Schedule (5.1).
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and discharge
or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax,
social security and unemployment withholding with respect to its employees,
(ii) lawful claims for labor, materials, supplies and services or otherwise,
and (iii) all storage or rental charges payable to warehousemen and bailees,
in each case, before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that (i) adequate reserves with
respect to such contest are maintained on the books of such Credit Party, in
accordance with GAAP; (ii) no Lien shall be imposed to secure payment of
such Charges (other than payments to warehousemen and/or bailees) that is
superior to any of the Liens securing the payment of Obligations and such
contest is maintained and prosecuted continuously and with diligence and
operates to suspend collection or enforcement of such Charges; (iii) none of
the Collateral becomes subject to forfeiture or loss as a result of such
contest; (iv) such Credit Party shall promptly pay or discharge such
contested Charges, Taxes or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence
reasonably acceptable to Agent of such compliance, payment or discharge, if
such contest is terminated or discontinued adversely to such Credit Party or
the conditions set forth in this Section 5.2(b) are no longer met; and (v)
Agent has not advised Borrower in writing that Agent reasonably believes
that nonpayment or nondischarge thereof could have or result in a Material
Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on
a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain
the policies of insurance described on Disclosure Schedule (3.18) as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss
payable and additional insured endorsements delivered to Agent) shall
contain provisions pursuant to which the insurer agrees to provide thirty
(30)
26
days prior written notice to Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy. If any Credit Party
at any time or times hereafter shall fail to obtain or maintain any of the
policies of insurance required above, or to pay all premiums relating
thereto, Agent or Requisite Lenders may at any time or times thereafter
obtain and maintain such policies of insurance and pay such premiums and
take any other action with respect thereto that Agent or Requisite Lenders
deems advisable. Neither Agent nor any Lender shall have any obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing
so, Agent and the Lenders shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto,
shall be payable on demand by Borrower to Agent or the Lenders paying such
premiums, as the case may be, and shall be additional Obligations hereunder
secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any Credit
Party's risk profile (including any change in the product mix maintained by
any Credit Party or any laws affecting the potential liability of such
Credit Party) to require additional forms and limits of insurance to, in
Agent's opinion, adequately protect both Agent's and Lenders' interests in
all or any portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its
industry. If reasonably requested by Agent, each Credit Party shall deliver
to Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional
insured. Each Credit Party irrevocably makes, constitutes and appoints Agent
(and all officers, employees or agents designated by Agent), so long as any
Default or Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed $500,000, as such Credit Party's true
and lawful agent and attorney-in-fact for the purpose of making, settling
and adjusting claims under such "All Risk" policies of insurance, endorsing
the name of such Credit Party on any check or other item of payment for the
proceeds of such "All Risk" policies of insurance and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted
to it pursuant to the foregoing power-of-attorney. Borrower shall promptly
notify Agent of any loss, damage, or destruction to the Collateral in the
amount of $250,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Agent in the
collection or handling thereof, Agent may, at its option, apply such
proceeds to the reduction of the Obligations in accordance with Section
1.3(c), provided that in the case of insurance proceeds pertaining to any
Credit Party other than Borrower, such insurance proceeds shall be applied
to the Loans owing by Borrower; or permit or require the applicable Credit
Party to use such money, or any part thereof, to replace, repair, restore or
rebuild the Collateral in a diligent and expeditious
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manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction. Notwithstanding the foregoing,
if the casualty giving rise to such insurance proceeds could not reasonably be
expected to have a Material Adverse Effect and such insurance proceeds do not
exceed $500,000 in the aggregate, Agent shall permit the applicable Credit
Party to replace, restore, repair or rebuild the property; provided that if
such Credit Party shall not have completed or entered into binding agreements
to complete such replacement, restoration, repair or rebuilding within one
hundred eighty (180) days of such casualty, Agent may apply such insurance
proceeds to the Obligations in accordance with Section 1.3(c), provided that
in the case of insurance proceeds pertaining to any Credit Party other than
Borrower, such insurance proceeds shall be applied to the Loans owing by
Borrower. All insurance proceeds that are to be made available to Borrower to
replace, repair, restore or rebuild the Collateral shall be handled in
accordance with the terms of the First Lien Credit Agreement, until the
Discharge of First Lien Obligations (as defined in the Intercreditor
Agreement) has occurred. After the occurrence of the Discharge of First Lien
Obligations, all insurance proceeds that are to be made available to Borrower
to replace, repair, restore or rebuild the Collateral shall be deposited in a
cash collateral account in which Agent has a first priority Lien and
thereafter such funds shall be made available to such Credit Party to provide
funds to replace, repair, restore or rebuild the Collateral upon Agent's
receipt of a request from Borrower to release such funds in connection with
any such replacement, repair, restoration or rebuilding, subject to the
foregoing provisions of this Section 5.4(c). To the extent not used to
replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.3(c).
(d) The Credit Parties shall, at their sole cost and expense, maintain
(i) key-man life insurance policies in the aggregate amount of $1.0 million
on the life of Xxxxxxx Xxxxxxx, all in form and with insurers reasonably
acceptable to Agent and (ii) assignments of such key-man life insurance
policies to Agent, duly executed by Borrower and the insurer issuing such
policies, all in form acceptable to Agent.
(e) Notwithstanding anything to the contrary set forth above, the
provisions of this Section 5.4 are subject in all respects to the terms and
conditions of the Intercreditor Agreement.
5.5 Compliance with Laws. Each Credit Party shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including those
relating to ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to comply, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default), the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure
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Schedule or as an exception to such representation or that is necessary to
correct any information in such Disclosure Schedule or representation which has
been rendered inaccurate thereby (and, in the case of any supplements to any
Disclosure Schedule, such Disclosure Schedule shall be appropriately marked to
show the changes made therein); provided that (a) no such supplement to any
such Disclosure Schedule or representation shall amend, supplement or otherwise
modify any Disclosure Schedule or representation, or be or be deemed a waiver
of any Default or Event of Default resulting from the matters disclosed
therein, except as consented to by Requisite Lenders in writing, and (b) no
supplement shall be required or permitted as to representations and warranties
that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect and shall comply in all material
respects with the terms of its material Licenses.
5.8 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have
a Material Adverse Effect; (b) implement any and all investigation,
remediation, removal and response actions that are appropriate or necessary to
maintain the value and marketability of the Real Estate or to otherwise comply
with Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate; (c) notify Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely
to result in Environmental Liabilities in excess of $25,000; and (d) promptly
forward to Agent a copy of any order, notice, request for information or any
communication or report received by such Credit Party in connection with any
such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $25,000, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter. If Agent at any time has a reasonable basis to believe that there may
be a violation of any Environmental Laws or Environmental Permits by any Credit
Party or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, upon Agent's written request (i)
cause the performance of such environmental audits including subsurface
sampling of soil and groundwater, and preparation of such environmental
reports, at Borrower's expense, as Agent may from time to time reasonably
request, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Agent and shall be in form and substance reasonably
acceptable to Agent, and (ii) permit Agent or its representatives to have
access to all Real Estate for the purpose of conducting such environmental
audits and testing as Agent deems appropriate, including subsurface
29
sampling of soil and groundwater. Borrower shall reimburse Agent for the costs
of such audits and tests and the same will constitute a part of the Obligations
secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters. As of the
Closing Date, except to the extent permitted to be delivered after the Closing
Date pursuant to Section 5.13, each Credit Party shall obtain a landlord's
agreement, mortgagee agreement or bailee letter, as applicable, from the lessor
of each leased property, mortgagee of owned property or bailee with respect to
any warehouse, processor or converter facility or other location where
Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be reasonably satisfactory in form and substance to Agent. After the Closing
Date, no real property or warehouse space shall be leased by any Credit Party
and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date without the prior written
consent of Requisite Lenders or, unless and until a landlord agreement or
bailee letter, as appropriate, reasonably satisfactory to Agent shall first
have been obtained with respect to such location. Each Credit Party shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located.
5.10 Mortgages. At the request of Requisite Lenders, each Credit Party
executing this Agreement agrees that it shall and shall cause each other Credit
Party to, at such Credit Party's expense and upon request of Agent, to provide
to Agent a mortgage or deed of trust granting Agent a Second Priority Lien on
all now owned or hereafter acquired Real Estate of any Credit Party, together
with environmental audits, mortgage title insurance commitment and policy, real
property survey, local counsel opinion(s), and, if required by Requisite
Lenders, supplemental casualty insurance and flood insurance, and such other
documents, instruments or agreements reasonably requested by Requisite Lenders,
in each case, in form and substance reasonably satisfactory to Agent. To the
extent otherwise permitted hereunder, if any Credit Party proposes to acquire a
fee ownership interest in Real Estate after Requisite Lenders have requested
that the Credit Parties deliver a mortgage or deed of trust pursuant to the
foregoing sentence, it shall notify Agent, and if the Requisite Lenders so
request, provide to Agent a mortgage or deed of trust granting Agent a Second
Priority Lien on such Real Estate, together with environmental audits, mortgage
title insurance commitment, real property survey, local counsel opinion(s),
and, if required by Agent, supplemental casualty insurance and flood insurance,
and such other documents, instruments or agreements reasonably requested by
Requisite Lenders, in each case, in form and substance reasonably satisfactory
to Agent.
5.11 Further Assurances. Each Credit Party executing this Agreement agrees
that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause
to be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement and each other Loan Document.
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5.12 Certificates of Title. As of the Closing Date, Borrower shall have
delivered to the First Lien Agent applications for new certificates of title
for all Equipment of the Credit Parties that can be titled evidencing the
Second Priority Lien granted to Agent under the Loan Documents in such
Equipment, and as of one (1) Business Day immediately following the Closing
Date, Borrower shall have caused all existing certificates of title for all
Equipment of the Credit Parties that can be titled to be delivered to First
Lien Agent, with any Liens (other than the Liens in favor of the First Lien
Agent or Agent) noted thereon released by the holder of such Lien. If any
Credit Party acquires any Equipment after the Closing Date that can be titled,
Borrower shall cause a certificate of title to be issued for such Equipment,
with the Second Priority Lien of the Agent noted thereon, and shall cause such
certificate to be delivered to the First Lien Agent, the Agent or their
designees directly.
5.13 Post Closing Covenant.
(a) No later than one (1) Business Day after the Closing Date, evidence
that all litigation related to the Acquisition has been dismissed without
prejudice in accordance with the terms of the Settlement Agreement.
(b) No later than seven (7) Business Days after the Closing Date, Agent
shall have received Phase I Environmental Site Assessment Reports,
consistent with American Society of Testing and Materials (ASTM) Standard E
1527 00 (or the current ASTM standard for Phase I environmental site
assessment reports), and applicable state requirements, on all of the Real
Estate of the Credit Parties; and Agent shall have further received such
environmental review and audit reports, including Phase II reports, with
respect to the Real Estate of any Credit Party as Requisite Lenders shall
have requested. Agent shall have received letters executed by the
environmental firms preparing such environmental reports authorizing Agent
and Lenders to rely on such reports.
(c) No later than thirty (30) days after the Closing Date, Agent shall
have received evidence that the insurance policies of Bobcat and BJCC
required by Section 5.4 are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses
or endorsements, in favor of Agent, on behalf of Lenders, subject to the
rights of the First Lien Agent.
(d) No later than January 31, 2006, Bobcat and BJCC shall each have been
merged into Borrower, with Borrower being the surviving corporation, in
accordance with the provisions of Section 6.1(b)(ii), and the filed
certificate of mergers evidencing such mergers shall have been delivered to
Agent.
(e) No later than 60 days after the Closing Date, Borrower shall and
shall cause each other Credit Party to use its commercially reasonable
efforts to deliver to the Agent a reasonably satisfactory landlord agreement
from the lessor of the leased properties located at (i) 000 Xxxxxxx-Xxxx
Xxxx, Xxxxx 0, Xxxxxxxx, XX 00000, (ii) Windwalker, 00 Xxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, (iii) 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX, (iv) 0000 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000 and (v) 000 Xxxxxxxx, Xxxxxxxx, XX 00000,
which agreement or letter shall contain a waiver or subordination of all
Liens or claims that the landlord may assert against the
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Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent.
(f) No later than 60 days after the Closing Date, Borrower shall and
shall cause each other Credit Party to use its commercially reasonable
efforts to deliver to the Agent a reasonably satisfactory blocked account
agreement with Legends Bank, First Lien Agent, Agent, for the benefit of
itself and Lenders, and Borrower and Subsidiaries thereof, as applicable, in
form and substance reasonably acceptable to Agent. Such blocked account
agreement shall provide, among other things, that (i) all items of payment
deposited in each account held with Legends Bank are held by such bank as
agent or bailee-in-possession for Agent, on behalf of itself and Lenders,
(ii) Legends Bank executing such agreement has no rights of setoff or
recoupment or any other claim against each such account, as the case may be,
other than for payment of its service fees and other charges directly
related to the administration of such account and for returned checks or
other items of payment, and (iii) from and after the effective date thereof,
Legends Bank agrees to forward immediately all amounts in each such account
to the Concentration Account Bank and to commence the process of daily
sweeps from such account into the Concentration Account.
(g) No later than 60 days after the Closing Date, Borrower shall deliver
an assignment of a key-man life insurance policy in the aggregate amount of
$1.0 million on the life of Xxx Xxxxxxx to Agent, duly executed by Borrower
and the insurer issuing such policies, all in form acceptable to Agent.
(h) Not later than 45 days after the Closing Date, the Borrower shall
prepay in full the aggregate outstanding principal amount of the Excluded
Subordinated Note, together with all accrued and unpaid interest thereof,
and provide satisfactory evidence of such prepayment to the First Lien
Agent.
(i) Not later than 45 days after the prepayment of any Subordinated Note
in accordance with Section 6.3(b)(iv), Borrower shall obtain from the holder
of such Subordinated Note, in writing, (i) confirmation that all amounts
owing under such Subordinated Note have been paid in full by Borrower and
that the Liens on the Collateral granted to such holder by Borrower as
security for the repayment of such Subordinated Note have been terminated,
(ii) authorization for each of Borrower and the Agent (and their respective
counsel) to file all termination statements and releases necessary or
appropriate (in Borrower's or Agent's reasonable judgment) to terminate or
release such holder's Liens on the Collateral, and (iii) an agreement to
execute and deliver to Borrower or First Lien Agent, upon its request
therefor from time to time, such other instruments or other documents
necessary or appropriate (in Borrower's or Agent's reasonable judgment) to
terminate or release such holder's Liens on the Collateral.
5.14 Non-Consolidation. Unless otherwise consented to by Requisite Lenders,
Borrower will and will cause each of its Subsidiaries to: (i) maintain entity
records and books of account separate from those of any other entity which is
an Affiliate of such entity; (ii) keep its funds and assets separate from those
of any other entity which is an Affiliate of such entity; and (iii) provide
that its board of directors or other analogous governing body will hold all
32
appropriate meetings to authorize and approve such entity's actions, which
meetings will be separate from those of other entities.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees as
to all Credit Parties that from and after the date hereof until the Termination
Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any
Person, except (i) on the Closing Date, the Borrower may consummate the
Acquisition on the terms set forth in the Acquisition Agreement, (ii) the
mergers contemplated in Section 5.13(d) may be consummated and (iii) any Credit
Party may merge with another Credit Party (so long as the Borrower, if a party
to such merger, is the surviving corporation) so long as after giving effect to
such merger, no Default or Event of Default would have occurred and be
continuing and the representations and warranties contained in the Loan
Documents would be true and correct in all material respects.
6.2 Investments; Loans and Advances. Except as otherwise expressly permitted
by this Section 6, no Credit Party shall make or permit to exist any investment
in, or make, accrue or permit to exist loans or advances of money to, any
Person, through the direct or indirect lending of money, holding of securities
or otherwise, except that the Credit Parties may (a) hold investments comprised
of notes payable, or stock or other securities issued by Account Debtors to
Borrower pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business, so long as the
aggregate amount of such Accounts so settled by Borrower does not exceed
$250,000; (b) maintain their investments in other Credit Parties to the extent
outstanding on the Closing Date; (c) hold other investments not exceeding
$5,000,000 in the aggregate at any time outstanding; (d) enter into interest
rate protections or hedging agreements or transactions (including, but not
limited to, interest rate swaps, caps, collars, floors and similar
transactions) designed to protect or manage exposure to the fluctuations in the
interest rates applicable to any of the Loans and First Lien Loans and (e)
Credit Parties may make investments, subject to Control Letters in favor of
Agent for the benefit of Lenders or otherwise subject to a Second Priority Lien
in favor of Agent for the benefit of Lenders, in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or any agency thereof maturing within one year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one year from
the date of creation thereof and currently having the highest rating obtainable
from either Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.,
(iii) certificates of deposit maturing no more than one year from the date of
creation thereof issued by commercial banks incorporated under the laws of the
United States of America, each having combined capital, surplus and undivided
profits of not less than $300,000,000 and having a senior unsecured rating of
"A" or better by a nationally recognized rating agency (an "A Rated Bank"),
(iv) time deposits maturing no more than thirty (30) days from the date of
creation thereof with A Rated Banks and (v) mutual funds that invest solely in
one or more of the investments described in clauses (i) through (iv) above.
33
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension
fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law, (iv)
existing Indebtedness described in Disclosure Schedule (6.3) and
refinancings thereof or amendments or modifications thereof that do not have
the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and that are otherwise
on terms and conditions no less favorable to any Credit Party, Agent or any
Lender, as determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (v) Permitted Insurance Premium
Indebtedness in an aggregate amount not to exceed $3,500,000 at any one time
outstanding, (vi) Indebtedness specifically permitted under Section 6.17,
(vii) the First Lien Loan in an aggregate principal amount not to exceed the
limitations thereon set forth in Section 5.3(a) of the Intercreditor
Agreement, and (viii) Indebtedness under interest rate protection or hedging
agreement or transaction (including, but not limited to, interest rate
swaps, caps, collars, floors and similar transactions) designed to protect
or manage exposure to the fluctuations in the interest rates applicable to
any of the Loans and First Lien Loans.
(b) No Credit Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or
other amount payable in respect of any Indebtedness prior to its scheduled
maturity, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold
or otherwise disposed of in accordance with Sections 6.8(b) or (c); (iii)
Indebtedness permitted by Section 6.3(a)(iv) upon any refinancing thereof in
accordance with Section 6.3(a)(iv); (iv) to the extent approved in writing
by the Agent, prepayment of Subordinated Notes on or before December 31,
2006 with proceeds of the First Lien Loans in an aggregate amount not to
exceed $2,144,889; (v) mandatory prepayments of the Junior Capital required
under Section 1.3(b)(ii) and(vi) prepayments of the First Lien Loan.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any transaction
with any other Credit Party or any Affiliate thereof except in the ordinary
course of and pursuant to the reasonable requirements of such Credit Party's
business and upon fair and reasonable terms that are no less favorable to
such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. All such
transactions existing as of the date hereof are described in Disclosure
Schedule (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and
similar purposes up to a maximum of $50,000 to any employee and up to a
maximum of $250,000 in the aggregate at any one time outstanding.
34
6.5 Capital Structure and Business. If all or any part of any Credit
Party's Stock is pledged to Agent, such Credit Party shall not issue additional
Stock. No Credit Party shall (a) make any changes in any of its business
objectives, purposes or operations that could in any way adversely affect the
repayment of the Loans or any of the other Obligations or could reasonably be
expected to have or result in a Material Adverse Effect, (b) make any change in
its capital structure as described in Disclosure Schedule (3.8), including the
issuance or sale of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock,
except for payments to holders of Subordinated Debt permitted by Section 1.4
and the issuance of options granted under existing or future employee incentive
stock option plans; or (c) amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur, assume
or permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any
Credit Party, (b) for Guaranteed Indebtedness incurred for the benefit of any
other Credit Party if the primary obligation is expressly permitted by this
Agreement and (c) guarantees of the First Lien Loans by any Credit Party that
has guaranteed the Obligations hereunder.
6.7 Liens. No Credit Party shall create, incur, assume or permit to exist
any Lien on or with respect to its Accounts or any of its other properties or
assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances; (b) Liens in existence on the date hereof and summarized on
Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $2,000,000 outstanding at any
one time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within
twenty (20) days following such purchase and does not exceed 100% of the
purchase price of the subject assets); (d) Liens securing the First Lien Loan;
and (e) Liens securing the Subordinated Debt, subject to the terms of the
Subordination Agreements (provided that Liens securing the Excluded
Subordinated Note shall be permitted hereunder for 45 days after the Closing
Date notwithstanding that such Liens are not subject to a Subordination
Agreement). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit
the creation of a Lien on any of its properties or other assets in favor of
Agent, on behalf of itself and Lenders, as additional collateral for the
Obligations, except the First Lien Credit Documents, operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject
thereto.
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6.8 Sale of Stock and Assets. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of its Accounts, other than (a) the sale
of Inventory in the ordinary course of business, and (b) the sale, transfer,
conveyance or other disposition by a Credit Party of Equipment or Fixtures that
are obsolete or no longer used or useful in such Credit Party's business and
having an appraised value not exceeding $200,000 in any single transaction or
$500,000 in the aggregate in any Fiscal Year; and (c) the sale, transfer,
conveyance or other disposition of other Equipment and Fixtures having a book
value not exceeding $200,000 in any single transaction or $500,000 in the
aggregate in any Fiscal Year. With respect to any disposition of assets or
other properties permitted pursuant to clauses (b) and (c) above, subject to
Section 1.3(b), promptly after receipt by the Borrower of notice of such
disposition and a certificate of a Responsible Officer certifying that such
disposition is permitted under clause (b) or (c) of this Section 6.8, Agent
agrees to release its Lien on such assets or other properties in order to
permit the applicable Credit Party to effect such disposition, and to execute
and deliver to Borrower (or authorize Borrower to file), at Borrower's expense,
appropriate UCC termination statements and other releases as reasonably
requested by Borrower, all without recourse or warranty to Agent.
6.9 ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur (i) an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Material Adverse Effect.
6.10 Financial Covenants. Borrower shall not breach or fail to comply with
any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or permit a Release
of any Hazardous Material on, at, in, under, above, to, from or about any of
the Real Estate where such Release would (a) violate in any respect, or form
the basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness. No Credit Party shall cancel any claim
or debt owing to it, except for reasonable consideration negotiated on an arm's
length basis and in the ordinary course of its business consistent with past
practices.
6.14 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) dividends and distributions by Subsidiaries of Borrower
paid to any Credit Party that is a wholly owned Subsidiary of Borrower and the
parent of the Subsidiary paying such dividend or distribution; (b) prepayments
of Subordinated Notes permitted under Section 6.3(b)(iv) and employee loans
permitted under Section 6.4(b); (c) reasonable and customary fees paid to non-
36
employee directors of the Borrower; (d) repayment or redemptions of the Junior
Capital using Net Equity Proceeds to the extent contemplated by Section 1.3(b);
(e) reimbursement of reasonable expenses of St. Xxxxx in an amount not to
exceed $60,000 per year; (f) a fee to SJMB, L.P. in an amount not to exceed
$274,000 payable on the date (after the Closing Date but on or prior to
December 31, 2006) that the Borrower completes the first public offering of its
Stock after the Closing Date; and (g) Change of Control Payments paid in cash
(1) on or after the Closing Date, but before December 31, 2005, in an aggregate
amount not to exceed $1,097,020, and (2) in connection with the issuance of
Stock of Borrower in the public offering contemplated pursuant to Section
1.3(b)(v) in an aggregate amount not to exceed $2,735,388.
6.15 Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall (a) change its name as it appears in official filings in the
state of its incorporation or other organization, (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, (c) change the type of entity that it is,
(d) change its organization identification number, if any, issued by its state
of incorporation or other organization, or (e) change its state of
incorporation or organization, in each case without at least thirty (30) days
prior written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders,
in any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate
structure in any manner that might make any financing or continuation statement
filed in connection herewith seriously misleading within the meaning of each
applicable provision of the Code except upon prior written notice to Agent and
Lenders and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral, has been completed or taken. No Credit Party shall change its
Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement, the other Loan
Documents and the First Lien Credit Documents) that could directly or
indirectly restrict, prohibit or require the consent of any Person with respect
to the payment of dividends or distributions or the making or repayment of
intercompany loans by a Subsidiary of Borrower to Borrower.
6.17 No Speculative Transactions. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18 Real Estate Purchases. No Credit Party shall purchase a fee simple
ownership interest in Real Estate with an aggregate purchase price in excess of
$250,000.
6.19 Changes Relating to Subordinated Debt; Material Contracts.
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(a) No Credit Party shall change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith) if
the effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates;
(c) change any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect
to such Subordinated Debt; (d) change the redemption or prepayment
provisions of such Subordinated Debt other than to extend the dates therefor
or to reduce the premiums payable in connection therewith; (e) grant any
security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse
to any Credit Party, Agent or any Lender.
(b) No Credit Party shall change or amend the terms of any First Lien
Credit Agreement (or any agreement in connection therewith) except to the
extent permitted under the Intercreditor Agreement.
(c) No Credit Party shall change or amend the terms of the Acquisition
Agreement (or any agreement or contract executed or delivered in connection
therewith) or the Centre Partners Settlement Documents.
6.20 Location of Equipment. No Credit Party shall permit any of its
Equipment or Inventory to be located outside the United States or United States
waters at any time.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall be
in effect until the Maturity Date, and the Loans and all other Obligations
shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of
Agent and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Maturity Date. Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all
as contained in the Loan Documents, shall not terminate or expire, but rather
shall survive any such termination or cancellation and shall continue in full
force and effect until the Termination Date; provided, that the provisions of
Section 11, the payment obligations under Sections 1.15 and 1.16, and the
indemnities contained in the Loan Documents shall survive the Termination Date.
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan
Document within ten (10) days following Agent's demand for such
reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe any
of the provisions of Sections 1.4, 1.8, 5.4(a), 5.12, 5.13 or 6, or any of
the provisions set forth in Annexes B or F, respectively.
(c) Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4 or any provisions set forth in Annexes D or E,
respectively, and the same shall remain unremedied for (i) three (3) days or
more with respect to any report, certificate or other information required
to be delivered weekly and (i) five (5) days or more with respect to all
other reports, certificates and information.
(d) Any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for twenty (20) days or
more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves
the failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $250,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined
or syndicated credit arrangements), or (ii) causes, or permits any holder of
such Indebtedness or Guaranteed Indebtedness or a trustee to cause,
Indebtedness or Guaranteed Indebtedness or a portion thereof in excess of
$250,000 in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, or cash collateral in
respect thereof to be demanded, in each case, regardless of whether such
default is waived, or such right is exercised, by such holder or trustee.
(f) Intentionally Omitted.
(g) Assets of any Credit Party are attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of
any Credit Party and such condition continues for thirty (30) days or more.
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(h) A case or proceeding is commenced against any Credit Party seeking
a decree or order in respect of such Credit Party (i) under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for
any substantial part of any such Credit Party's assets, or (iii) ordering
the winding-up or liquidation of the affairs of such Credit Party, and such
case or proceeding shall remain undismissed or unstayed for sixty (60) days
or more or a decree or order granting the relief sought in such case or
proceeding is granted by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consents to or fails to contest in a
timely and appropriate manner to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, (iii) makes an
assignment for the benefit of creditors, (iv) takes any action in
furtherance of any of the foregoing; or (v) admits in writing its inability
to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $250,000 in the aggregate at any time are outstanding against one or more
of the Credit Parties and the same are not, within thirty (30) days after
the entry thereof, discharged or execution thereof stayed or bonded pending
appeal, or such judgments are not discharged prior to the expiration of any
such stay.
(k) Any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any
such assertion, that any provision of any of the Loan Documents has ceased
to be or otherwise is not valid, binding and enforceable in accordance with
its terms), or any Lien created under any Loan Document ceases to be a valid
and perfected Second Priority Lien (except as otherwise permitted herein or
therein) in any of the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any Material Adverse Effect occurs.
(n) Xxxxxxx Xxxxxxx ceases to serve as, or to perform the duties and
functions of the office of, the chief executive officer of Borrower, unless
otherwise agreed to by the Agent.
(o) The failure of any Credit Party or any creditor of any Borrower or
any of its Subsidiaries (other than a Lender) to comply with the terms of
the Intercreditor Agreement, any Subordination Agreement, any other
subordination or intercreditor agreement or any subordination provisions of
any note or other document running to the benefit of Agent
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or Lenders, or if any such document becomes null and void or any party
denies further liability under any such document or provides notice to that
effect.
8.2 Remedies.
(a) If any Default or Event of Default has occurred and is continuing,
Agent shall, at the written request of Requisite Lenders or a Significant
Lender, without notice except as otherwise expressly provided herein,
increase the rate of interest applicable to the Loans to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
shall, at the written request of the Requisite Lenders or a Significant
Lender, without notice: (i) declare all or any portion of the Obligations,
including all or any portion of any Loan to be forthwith due and payable,
all without presentment, demand, protest or further notice of any kind, all
of which are expressly waived by Borrower and each other Credit Party; or
(ii) exercise any rights and remedies provided to Agent under the Loan
Documents (subject to the terms of the Intercreditor Agreement) or at law or
equity, including all remedies provided under the Code, including without
limitation issuing notices under the Intercreditor Agreement; provided, that
upon the occurrence of an Event of Default specified in Sections 8.1(h) or
(i), all of the Obligations, including the aggregate Loan, shall become
immediately due and payable without declaration, notice or demand by any
Person.
(c) If any Event of Default has occurred and is continuing, Agent
shall, at the written request of the Requisite Lenders or a Significant
Lender, deliver such notices under the Intercreditor Agreement to First Lien
Agent and Borrower as the Requisite Lenders or such Significant Lender, as
the case may be, shall request.
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way
be liable, and hereby ratifies and confirms whatever Agent may do in this
regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Each Lender may sell, transfer, negotiate or assign all or a
portion of its rights and obligations hereunder (including all or a portion
of its Commitments and its rights and obligations with respect to Loans) to
(i) any existing Lender, (ii) any Affiliate or
41
Approved Fund of or lender to any existing Lender or (iii) any other Person
acceptable (which acceptance shall not be unreasonably withheld or delayed)
to the Agent and, as long as no Event of Default is continuing, the
Borrower; provided, however, that the aggregate outstanding principal amount
(determined as of the effective date of the applicable assignment) of the
Loans and Commitments subject to any such assignment shall be an integral
multiple of $1,000,000, unless such assignment is made to an existing Lender
or an Affiliate or Approved Fund of any existing Lender, is of the
assignor's (together with its Affiliates and Approved Funds) entire interest
in such Commitment or is made with the prior consent of the Borrower and the
Agent.
(b) The parties to each assignment made in reliance on clause (a)
above (other than those described in clause (d) or (e) below) shall execute
and deliver to the Agent (which shall keep a copy thereof) an Assignment
Agreement substantially in the form attached hereto as Exhibit 9.1(b) and
otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Agent, together with any existing Note subject to such assignment (or
any affidavit of loss therefor acceptable to the Agent), any tax forms
required to be delivered pursuant to Section 1.15(c) and payment by the
assignee of an assignment fee in the amount of $3,500. Upon receipt of all
the foregoing, and conditioned upon such receipt and upon the Agent
consenting to such assignment, from and after the effective date specified
in such Assignment, the Agent shall record or cause to be recorded in the
Register the information contained in such assignment.
(c) Effective upon the entry of such record in the Register, (i) such
assignee shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such assignment, shall have the rights and obligations of a
Lender, (ii) any applicable Note shall be transferred to such assignee
through such entry and (iii) the assignor thereunder shall, to the extent
that rights and obligations under this Agreement have been assigned by it
pursuant to such assignment, relinquish its rights (except for those
surviving the termination of the Commitments and the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an assignment covering all or the remaining
portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto except that each
Lender agrees to remain bound by Section 9.
(d) In addition to the other rights provided in this Section 9.1, each
Lender may grant a security interest in, or otherwise assign as collateral,
any of its rights under this Agreement, whether now owned or hereafter
acquired (including rights to payments of principal or interest on the
Loans), to (A) any federal reserve bank (pursuant to Regulation A of the
Federal Reserve Board), without notice to the Agent or (B) any holder of, or
trustee for the benefit of the holders of, such Lender's Lender Securities
by notice to the Agent; provided, however, that no such holder or trustee,
whether because of such grant or assignment or any foreclosure thereon
(unless such foreclosure is made through an assignment in accordance with
clause (b) above), shall be entitled to any rights of such Lender hereunder
and no such Lender shall be relieved of any of its obligations hereunder.
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(e) In addition to the other rights provided in this Section 9.1, each
Lender may, (x) with notice to the Agent, grant to an SPV the option to make
all or any part of any Loan that such Lender would otherwise be required to
make hereunder (and the exercise of such option by such SPV and the making
of Loans pursuant thereto shall satisfy the obligation of such Lender to
make such Loans hereunder) and such SPV may assign to such Lender the right
to receive payment with respect to any Obligation and (y) without notice to
or consent from the Agent or the Borrower, sell participations to one or
more Persons in or to all or a portion of its rights and obligations under
the Loan Documents (including all its rights and obligations with respect to
the Loans); provided, however, that, whether as a result of any term of any
Loan Document or of such grant or participation, (i) no such SPV or
participant shall have a commitment, or be deemed to have made an offer to
commit, to make Loans hereunder, and, except as provided in the applicable
option agreement, none shall be liable for any obligation of such Lender
hereunder, (ii) such Lender's rights and obligations, and the rights and
obligations of the Credit Parties, the Agent and the Lenders towards such
Lender, under any Loan Document shall remain unchanged and each other party
hereto shall continue to deal solely with such Lender, which shall remain
the holder of the Obligations in the Register, except that (A) each such
participant and SPV shall be entitled to the benefit of Sections 1.13, 1.15,
1.16, and 2.17, but only to the extent such participant or SPV delivers any
tax forms such Lender is required to collect pursuant to Section 1.15(c) and
then only to the extent of any amount to which such Lender would be entitled
in the absence of any such grant or participation and (B) each such SPV may
receive other payments that would otherwise be made to such Lender with
respect to Loans funded by such SPV to the extent provided in the applicable
option agreement and set forth in a notice provided to the Agent by such SPV
and such Lender, provided, however, that in no case (including pursuant to
clause (A) or (B) above) shall an SPV or participant have the right to
enforce any of the terms of any Loan Document, and (iii) the consent of such
SPV or participant shall not be required (either directly, as a restraint on
such Lender's ability to consent hereunder or otherwise) for any amendments,
waivers or consents with respect to any Loan Document or to exercise or
refrain from exercising any powers or rights such Lender may have under or
in respect of the Loan Documents (including the right to enforce or direct
enforcement of the Obligations), except for those described in clauses (ii),
(iii) and (iv) of Section 11.2(c) with respect to amounts, or dates fixed
for payment of amounts, to which such participant or SPV would otherwise be
entitled and, in the case of participants, except for those described in
Section 11.2(c)(v). No party hereto shall institute against any SPV grantee
of an option pursuant to this clause (e) any bankruptcy, reorganization,
insolvency, liquidation or similar proceeding, prior to the date that is one
year and one day after the payment in full of all outstanding commercial
paper of such SPV; provided, however, that each Lender having designated an
SPV as such agrees to indemnify each Indemnified Person against any
Liability that may be incurred by, or asserted against, such Indemnified
Person as a result of failing to institute such proceeding (including a
failure to get reimbursed by such SPV for any such Liability). The agreement
in the preceding sentence shall survive the termination of the Commitments
and the payment in full of the Obligations.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on behalf
of all Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of
43
this Section 9.2 are solely for the benefit of Agent and Lenders and no Credit
Party nor any other Person shall have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and the other Loan Documents, Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Agent shall be mechanical and administrative in nature
and Agent shall not have, or be deemed to have, by reason of this Agreement,
any other Loan Document or otherwise a fiduciary relationship in respect of any
Lender. Except as expressly set forth in this Agreement and the other Loan
Documents, Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to any Credit Party or any of
their respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected
Lenders, as the case may be, and Agent shall not incur liability to any Person
by reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Agent, be contrary to law or the terms of
this Agreement or any other Loan Document, (b) if such action would, in the
opinion of Agent, expose Agent to Environmental Liabilities or (c) if Agent
shall not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders or all affected Lenders,
as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor any
of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form reasonably
satisfactory to Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d)
44
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or
the other Loan Documents on the part of any Credit Party or to inspect the
Collateral (including the books and records) of any Credit Party; (e) shall not
be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments hereunder,
GE Capital shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though it
were not Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include GE Capital in its individual capacity. GE Capital
and its Affiliates may lend money to, invest in, and generally engage in any
kind of business with, any Credit Party, any of their Affiliates and any Person
who may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges that GE Capital is a lender providing all or a portion of
the First Lien Loan, and is the agent for all lenders under the First Lien
Credit Agreement and all related documents; each Lender acknowledges and
consents to the potential conflict of interest of GE Capital as Agent hereunder
and as a lender and agent under the First Lien Credit Agreement.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as
a result of Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of
interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Credit Parties and without limiting the obligations of the Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses,
45
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other Loan
Document, to the extent that Agent is not reimbursed for such expenses by
Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not less than
thirty (30) days prior written notice thereof to Lenders and Borrower. Agent
may be removed at any time with or without cause by the Requisite Lenders or
any Significant Lender effective upon delivery of written notice thereof to
Agent. Upon any such resignation or removal, the Requisite Lenders shall have
the right to appoint a successor Agent. If no successor Agent for a resigning
Agent has been appointed pursuant to the foregoing, within thirty (30) days
after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any,
as the Requisite Lenders appoint a successor Agent as provided above. If no
successor Agent for a removed Agent has been appointed effective at the time
such Agent is removed, the Requisite Lenders shall thereafter perform all the
duties of Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above. Any successor Agent appointed by
Requisite Lenders hereunder shall be subject to the approval of Borrower, such
approval not to be unreasonably withheld or delayed; provided that such
approval shall not be required if a Default or an Event of Default has occurred
and is continuing. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent, the effective date of the resigning Agent's resignation or the effective
date of the removed Agent's removal, the resigning or removed Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning or removed Agent shall continue. After any resigning Agent's
resignation or any removed Agent's removal hereunder, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was acting as Agent under this Agreement and the other
Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
and subject to Section 9.9(f), each Lender is hereby authorized at any time or
from time to time, without prior notice to any Credit Party or to any Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of Borrower or any Credit Party (regardless of whether
such balances are then due to such Borrower or Credit Party) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of Borrower or any Credit Party
46
against and on account of any of the Obligations that are not paid when due.
Any Lender exercising a right of setoff or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata Shares (other than offset rights exercised by
any Lender with respect to Sections 1.13, 1.15 or 1.16). Each Credit Party
agrees, to the fullest extent permitted by law, that (a) any Lender may
exercise its right to offset with respect to amounts in excess of its Pro Rata
Share of the Obligations and may sell participations in such amounts so offset
to other Lenders and holders and (b) any Lender so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of offset, bankers lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the
offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations
by that Lender shall be rescinded and the purchase price restored without
interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Each Lender shall make the amount of such Lender's Pro Rata
Share of the Loan available to Agent in same day funds by wire transfer to
Agent's account as set forth in Annex G not later than 12:00 p.m. (New York
time) on the Closing Date. After receipt of such wire transfers (or, in the
Agent's sole discretion, before receipt of such wire transfers), subject to the
terms hereof, Agent shall make the requested Loan to the Borrower. All payments
by each Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) On each Business Day, in the case of principal, and on the
second Business Day of each calendar week, or more frequently at Agent's
election, in the case of interest and Fees (each, a "Settlement Date"), Agent
shall advise each Lender by telephone, or telecopy of the amount of such
Lender's Pro Rata Share of principal, interest and Fees, as applicable paid for
the benefit of Lenders with respect to the Loan. Provided that each Lender has
funded its Loan, Agent shall pay to each Lender such Lender's Pro Rata Share of
principal, interest and Fees, as applicable, paid by Borrower since the previous
Settlement Date for the benefit of such Lender on the Loan held by it. To the
extent that any Lender (a "Non-Funding Lender") has failed to fund its Loan,
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrower. Such
payments shall be made by wire transfer to such Lender's account (as specified
by such Lender in Annex G or the applicable Assignment Agreement) not later than
2:00 p.m. (New York time) on the next Business Day following each Settlement
Date.
(b) Intentionally Omitted.
47
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
(d) Intentionally Omitted.
(e) Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received
by Agent from, or delivered by Agent to, any Credit Party, with notice of
any Event of Default of which Agent has actually become aware and with
notice of any action taken by Agent following any Event of Default;
provided, that Agent shall not be liable to any Lender for any failure to do
so, except to the extent that such failure is attributable to Agent's gross
negligence or willful misconduct. Lenders acknowledge that Borrower is
required to provide Financial Statements and Collateral Reports to Lenders
in accordance with Annexes D and E hereto and agree that Agent shall have no
duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff)
without first obtaining the prior written consent of Agent and Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert
and at the direction or with the consent of Agent or Requisite Lenders.
9.10 Authorization to Execute Loan Documents. Each Lender, by delivering
its signature page to this Agreement or an Assignment Agreement, shall be
deemed to have acknowledged receipt of, consented to, approved and agreed to be
bound by each Loan Document, the Intercreditor Agreement and each other
document required to be approved by Agent, Requisite Lenders or all Lenders, as
applicable, on the Closing Date.
9.11 Intercreditor Agreements; Collateral Documents and Guaranty.
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(a) Agent under Security Documents, Intercreditor Agreement and
Guaranty. Each Lender hereby further authorizes Agent, on behalf of and for
the benefit of Lenders, (i) to enter into and to be the agent for and
representative of Lenders with respect to the Subsidiary Guaranty, the
Collateral and the Security Documents and (ii) to enter into and perform its
obligations under the Intercreditor Agreement and the Subordination
Agreements, and each Lender agrees to be bound by the terms of the
Intercreditor Agreement and Subordination Agreements. Subject to Section
11.2, without further written consent or authorization from Lenders, Agent
may execute any documents or instruments necessary to release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or
such other Lenders as may be required to give such consent under Section
11.2) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, the
Credit Parties, Agent and each Lender hereby agree that (i) no Lender shall
have any right individually to realize upon any of the Collateral or to
enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Agent, on
behalf of Lenders in accordance with the terms hereof and all powers, rights
and remedies under the Collateral Documents may be exercised solely by
Agent, and (ii) in the event of a foreclosure by Agent on any of the
Collateral pursuant to a public or private sale, Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and Agent,
as agent for and representative of the Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply
any of the Obligations as a credit on account of the purchase price for any
collateral payable by Agent at such sale.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party),
except as otherwise provided herein or therein. No Credit Party may assign,
transfer, hypothecate or otherwise convey its rights, benefits, obligations or
duties hereunder or under any of the other Loan Documents without the prior
express written consent of Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Agent and Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agent and Lenders with respect to the
transactions contemplated hereby and no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
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11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter or fee
letter or confidentiality agreement, if any, between any Credit Party and Agent
or any Lender or any of their respective Affiliates, predating this Agreement
and relating to a financing of substantially similar form, purpose or effect
shall be superseded by this Agreement.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower and Requisite Lenders, or all
affected Lenders, as applicable, and to the extent set forth below, Agent.
Except as set forth in clause (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require
the written consent of Requisite Lenders
(b) Intentionally Omitted.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by each Lender directly affected thereby: (i) increase
the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders); (ii) reduce the principal of, rate
of interest on or Fees payable with respect to any Loan of any affected
Lender; (iii) extend any scheduled payment date (other than payment dates of
mandatory prepayments under Section 1.3(b)) or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive, forgive,
defer, extend or postpone any payment of interest or Fees as to any affected
Lender; (v) release any Guaranty or, except as otherwise permitted herein or
in the other Loan Documents, release, or permit any Credit Party to sell or
otherwise dispose of, any Collateral with a value exceeding $5,000,000 in
the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of
them to take any action hereunder; and (vii) amend or waive this Section
11.2 or the definitions of the term "Requisite Lenders", insofar as such
definitions affect the substance of this Section 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or
duties of Agent under this Agreement or any other Loan Document, including
any release of any Guaranty or Collateral requiring a writing signed by all
Lenders, shall be effective unless in writing and signed by Agent, in
addition to Lenders required hereinabove to take such action. Each
amendment, modification, termination or waiver shall be effective only in
the specific instance and for the specific purpose for which it was given.
No amendment, modification, termination or waiver shall be required for
Agent to take additional Collateral pursuant to any Loan Document. No
amendment, modification, termination or waiver of any provision of any Note
shall be
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effective without the written concurrence of the holder of that Note. No
notice to or demand on any Credit Party in any case shall entitle such
Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 11.2
shall be binding upon each holder of the Notes at the time outstanding and
each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clauses (ii), (iii) and (iv) below being
referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Requisite Lenders, the consent of
Lenders holding more than 50% of the aggregate Loans is obtained, but the
consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request,
Agent or a Person reasonably acceptable to Agent shall have the right, with
Agent's consent and in Agent's sole discretion (but shall have no obligation)
to purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders
agree that they shall, upon Borrower's request, sell and assign to Agent or
such Person, all of the Loans of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so
long as no suits, actions, proceedings or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or liabilities
that are Indemnified Liabilities, Agent shall deliver to Borrower
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3 Fees and Expenses. Borrower shall reimburse (i) Agent for all fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) Agent (and, with respect
to clauses (c) and (d) below, all Lenders) for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and appraisers), incurred
in connection with the negotiation, preparation and filing and/or recordation
of the Loan Documents and incurred in connection with:
(a) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of any Loan (including a wire transfer fee
of $25 per wire transfer);
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(b) any amendment of, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of
the Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Credit Party or any other
Person and whether as a party, witness or otherwise) in any way relating to
the Collateral, any of the Loan Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or against
any or all of the Credit Parties or any other Person that may be obligated
to Agent by virtue of the Loan Documents, including any such litigation,
contest, dispute, suit, proceeding or action arising in connection with any
work-out or restructuring of the Loans during the pendency of one or more
Events of Default; provided that in the case of reimbursement of counsel for
Lenders other than Agent and any Significant Lender, such reimbursement
shall be limited to one counsel for all such Lenders; provided, further,
that no Person shall be entitled to reimbursement under this clause (c) in
respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's gross negligence
or willful misconduct;
(d) any attempt to enforce any remedies of Agent or any Lender against
any or all of the Credit Parties or any other Person that may be obligated
to Agent or any Lender by virtue of any of the Loan Documents, including any
such attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loans during the pendency of one or more Events of
Default; provided that in the case of reimbursement of counsel for Lenders
other than Agent and any Significant Lender, such reimbursement shall be
limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency of
one or more Events of Default;
(f) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral; and
(g) during the pendency of an Event of Default, the actual out-of-
pocket expenses incurred by the Requisite Lenders in connection with
employing an operational consultant; provided however that the expenses of
such operational consultant shall not be reimbursable if the First Lien
Lenders have previously retained consultants reasonably acceptable to the
Requisite Lenders and such consultants agree to share their work product
with the Lenders.
including, as to each of clauses (a) through (f) above, all reasonable
attorneys and other professional and service providers fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all
52
expenses, costs, charges and other fees incurred by such counsel and others in
connection with or relating to any of the events or actions described in this
Section 11.3, all of which shall be payable, on demand, by Borrower to Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges;
and expenses for travel, lodging and food paid or incurred in connection with
the performance of such legal or other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default
or Event of Default by any Credit Party shall be deemed to have been suspended
or waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable Requisite Lenders, and directed to Borrower specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this Agreement and
the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement
conflicts with any provision in any of the other Loan Documents, the provision
contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintaining the confidentiality of its own confidential information) to
maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of 2 years following
receipt thereof, except that Agent and each Lender may disclose such
53
information (a) to Persons employed or engaged by Agent or such Lender; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this Section 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described
in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any
court decree, subpoena or legal or administrative order or process; (d) as, on
the advice of Agent's or such Lender's counsel, is required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which Agent or such Lender is a party; or
(f) that ceases to be confidential through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT
PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT
AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX
XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX H OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF SUCH CREDIT PARTY'S ACTUAL
54
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS,
PROPER POSTAGE PREPAID.
11.10 (a) Notices. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to (A) the party to be notified and sent to the address or facsimile number
indicated in Annex H, or (B) otherwise to the party to be notified at its
address specified on the signature page of any applicable Assignment Agreement,
(ii) posted to Intralinks(R) (to the extent such system is available and set up
by or at the direction of Agent prior to posting) in an appropriate location by
uploading such notice, demand, request, direction or other communication to
xxx.xxxxxxxxxx.xxx, faxing it to 000-000-0000 with an appropriate bar-coded fax
coversheet or using such other means of posting to Intralinks(R) as may be
available and reasonably acceptable to Agent prior to such posting, (iii) posted
to any other E-System set up by or at the direction of Agent in an appropriate
location or (iv) addressed to such other address as shall be notified in writing
(A) in the case of Borrower and, Agent, to the other parties hereto and (B) in
the case of all other parties, to Borrower and Agent. Transmission by electronic
mail (including E-Fax, even if transmitted to the fax numbers set forth in
clause (i) above) shall not be sufficient or effective to transmit any such
notice under this clause (a) unless such transmission is an available means to
post to any E-System.
(b) Effectiveness. All communications described in clause (a) above and
all other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one Business Day after delivery to such courier service, (iii)
if delivered by mail, when deposited in the mails, (iv) if delivered by
facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender's receipt of confirmation of proper transmission,
and (v) if delivered by posting to any E-System, on the later of the date of
such posting in an appropriate location and the date access to such posting is
given to the recipient thereof in accordance with the standard procedures
applicable to such E-System. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower or Agent) designated in Annex H to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.
11.11 Section Titles. The Section titles and Table of Contents contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
55
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES
WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY
CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure using the name of GE Capital or its
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement using Borrower's name, product photographs, logo
or trademark. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
11.15 Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Credit Party for liquidation or reorganization, should any Credit Party become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Credit Party's assets, and shall continue to be effective or to be reinstated,
as the case may be, if at any time payment and performance of the Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed this Agreement and, specifically, the provisions of
Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or
56
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
11.18 Intercreditor Agreement. The rights, remedies and obligations of the
parties hereto are subject in all respects to the terms of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and the terms of this Agreement, the terms of the Intercreditor
Agreement shall govern. Prior to the Termination Date (as such term is defined
in the First Lien Credit Agreement), in the event that any obligation of a
Credit Party hereunder conflicts with an obligation of such Credit Party under
the First Lien Credit Agreement, such Credit Party will first comply with its
obligation under the First Lien Credit Agreement, and then, to the extent
possible, comply with its obligations hereunder, and any failure so to comply
hereunder, due to compliance with the First Lien Credit Agreement shall not be a
Default or Event of Default under the Loan Documents.
[Signature Page Follows]
57
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
BLACK WARRIOR WIRELINE CORP., as
Borrower
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO SECOND LIEN CREDIT AGREEMENT]
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent, Agent
and Lender
By: /s/ Xxxxxxxx Xxxxxx
----------------------------
Xxxxxxxx Xxxxxx
Duly Authorized Signatory
[SIGNATURE PAGE TO SECOND LIEN CREDIT AGREEMENT]
MONROE CAPITAL ADVISORS LLC,
as a Lender
By:
-----------------------------------
Name:
Title:
[SIGNATURE PAGE TO SECOND LIEN CREDIT AGREEMENT]
The following Persons are signatories to this Agreement in their capacities
as Credit Parties and not as Borrowers.
BOBCAT PRESSURE CONTROL, INC., as a
Credit Party
By:
------------------------------------
Name:
Title:
XXXXX XXX XXXX COMPANY, as a Credit
Party
By:
------------------------------------
Name:
Title:
[SIGNATURE PAGE TO SECOND LIEN CREDIT AGREEMENT]
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings, and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to
this Agreement:
"A Rated Bank" has the meaning ascribed thereto in Section 6.2.
"Account Debtor" means any Person who may become obligated to any Credit
Party under, with respect to, or on account of, an Account, Chattel Paper or
General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex F.
"Accounts" means all "accounts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, or Instruments),
(including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party's rights in, to and
under all purchase orders or receipts for goods or services, (c) all of each
Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables and (f) all
collateral security of any kind, now owned or hereafter in existence, given by
any Account Debtor or any other Person with respect to any of the foregoing.
"Acquisition" means the acquisition of 100% of the Stock, and all warrants
and options therefore, of Bobcat by Borrower on the Closing Date pursuant to the
terms of the Acquisition Agreement.
"Acquisition Agreement" means that certain Purchase Agreement, dated as of
the date hereof, by and among Borrower, the Sellers, Bobcat and BJCC.
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"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrower, the other
Credit Parties party thereto, GE Capital, as Agent and Lender and the other
Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to this
Agreement.
"Applicable Index Margin" means the per annum interest rate margin from time
to time in effect and payable in addition to the Index Rate applicable to the
Loan, as determined by reference to Section 1.5(a).
"Applicable LIBOR Margin" means the per annum interest rate margin from time
to time in effect and payable in addition to the LIBOR Rate applicable to the
Loan, as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable Index Margin and the
Applicable LIBOR Margin.
"Applicable Percentage" has the meaning ascribed to it in Section 1.9(d).
"Approved Fund" means, with respect to any Lender, any Person (other than a
natural Person) that (a) is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business and (b) is advised or managed by (i) such
Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an
individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. ss.ss.101 et seq.
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"BJCC" means Xxxxx Xxx Xxxx Company, an Oklahoma corporation and wholly
owned subsidiary of Bobcat.
"Bobcat" means Bobcat Pressure Control, Inc.
"Borrower" has the meaning ascribed thereto in the preamble to this
Agreement.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the State of New York and
in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"Capital Expenditures" means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto that have a useful life of more
than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Management Systems" has the meaning ascribed to it in Section 1.8.
"Centre Partners" means collectively, Centre Southwest Partners LLC, Centre
Partners Management LLC and their affiliates.
"Centre Partners Settlement Documents" means, collectively, all documents,
agreements, releases and other instruments executed by, or by and among, Centre
Partners and the Credit Parties in connection with resolving and releasing any
claims that any such parties may have against any other of such parties.
"Change of Control" means any of the following: (a) any person or group of
persons (within the meaning of the Securities Exchange Act of 1934) shall have
acquired, after the Closing Date, beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 20% or more of the issued and outstanding
shares of capital Stock of Borrower having the right to vote for the election of
directors of Borrower under ordinary circumstances; (b) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Borrower (together with any new
directors whose election by the board of directors of Borrower or whose
nomination for election by the Stockholders of Borrower was approved by a vote
of at least two-thirds of the directors then still in office who either were
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directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office; or (c)
Borrower ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its Subsidiaries.
"Change of Control Payments" means payments made or accrued by Borrower
pursuant to the Employment Agreements as a result of the occurrence of a "change
of control" (as defined in any such Employment Agreement) or sale of the stock
or assets of the Borrower.
"Charges" means all federal, state, county, city, municipal, local, foreign
or other governmental taxes (including taxes owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims or encumbrances upon
or relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (d) any Credit Party's
ownership or use of any properties or other assets, or (e) any other aspect of
any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in the
Code, including electronic chattel paper, now owned or hereafter acquired by any
Credit Party.
"Closing Checklist" means the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with this Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex C.
"Closing Date" means December 16, 2005.
"Code" means the Uniform Commercial Code as the same may, from time to time,
be enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.
"Collateral" means the property covered by the Security Agreement, the
Pledge Agreements, the Guaranties, any Mortgages and the other Collateral
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Agent, on behalf of itself and Lenders, to
secure the Obligations.
A-4
"Collateral Documents" means the Security Agreement, the Patent Security
Agreement, the Trademark Security Agreement, the Copyright Security Agreement,
the Subsidiary Guaranty, the Pledge Agreement and all similar agreements entered
into guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex D.
"Collection Account" means that certain account of Agent, account number
000-000-00 in the name of Agent at DeutscheBank Trust Company Americas in New
York, New York ABA No. 021 001 033, or such other account as may be specified in
writing by Agent as the "Collection Account".
"Commitment" means (a) as to any Lender, the commitment of such Lender to
make its Pro Rata Share of the Loan as set forth on Annex 1 to this Agreement or
in the most recent Assignment Agreement executed by such Lender, and (b) as to
all Lenders, the aggregate commitment of all Lenders to make the Loan, which
aggregate commitment shall be Twenty-Five Million ($25,000,000) on the Closing
Date. After advancing the Loan, each reference to a Lender's Commitment shall
refer to that Lender's Pro Rata Share of the outstanding Loan.
"Compliance Certificate" has the meaning ascribed to it in Annex C.
"Contracts" means all "contracts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
"Control Letter" means a letter agreement between Agent and (i) the issuer
of uncertificated securities with respect to uncertificated securities in the
name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.
"Copyright License" means any and all rights now owned or hereafter acquired
by any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security Agreements made
in favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
A-5
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" means Borrower and each of its Subsidiaries.
"Default" means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term is defined in
the Code, now or hereafter held in the name of any Credit Party.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to this
Agreement.
"Documents" means any "documents," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of America.
"E-Fax" means any system used to receive or transmit faxes electronically.
"E-System" means any electronic system, including Intralinks(R) and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by Agent, any of its Affiliates, or any of such Person's
respective officers, directors, employees, attorneys, agents and representatives
or any other Person, providing for access to data protected by passcodes or
other security system.
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period determined in accordance with GAAP, minus (b) the sum of (i) income
tax benefits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period to the extent approved by First Lien Agent and Agent,
unless otherwise instructed by Requisite
A-6
Lenders, (iv) depreciation and amortization for such period, (v) amortized debt
discount for such period, (vi) the amount of any deduction to consolidated net
income as the result of any grant to any members of the management of such
Person of any Stock and (vii) Change of Control Payments in an aggregate amount
not to exceed $2,632,408 over the term of this Agreement, in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication. For purposes of
this definition, the following items shall be excluded in determining
consolidated net income of a Person: (1) the income (or deficit) of any other
Person accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into, such Person or any of such Person's Subsidiaries; (2) the
income (or deficit) of any other Person (other than a Subsidiary) in which such
Person has an ownership interest, except to the extent any such income has
actually been received by such Person in the form of cash dividends or
distributions; (3) the undistributed earnings of any Subsidiary of such Person
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period; (5) any write-up of any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary; provided, however, that the income
(or deficit) of Bobcat and its Subsidiaries accrued prior to the date they
became Subsidiaries of Black Warrior and prior to any date in which they were
merged into Borrower shall be included in determining consolidated net income of
Borrower.
"Employment Agreements" means the employment agreements to which Borrower is
a party.
"Environmental Laws" means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42 U.S.C.
xx.xx. 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. xx.xx.
1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx. 651 et
seq.); and the Safe Drinking Water Act (42 U.S.C.
A-7
xx.xx. 300(f) et seq.), and any and all regulations promulgated thereunder, and
all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located and, in any
event, including all such Credit Party's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV
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Plan unless such failure is cured within thirty (30) days; (g) any other event
or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; or (i)
the loss of a Qualified Plan's qualification or tax exempt status; or (j) the
termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of Section
4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excluded Subordinated Note" means that certain Subordinated Note dated
December 17, 1999, made by the Borrower to Xxxxx X. Xxxxxxx Declaration Trust in
the original principal amount of $100,000.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29 U.S.C.
ss.201 et seq.
"Fair Salable Balance Sheet" means a balance sheet of Borrower prepared in
accordance with Section 3.4(d).
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Fees" means any and all fees payable to Agent or any Lender pursuant to
this Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex F.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Section 3.4 and Annex C.
"First Lien Agent" means GE Capital (together with its successors and
assigns) as Agent for the lenders party to the First Lien Credit Agreement.
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"First Lien Credit Agreement" means that certain Second Amended and Restated
Credit Agreement, dated as of the Closing Date, among Borrower, the lenders from
time to time parties thereto and the First Lien Agent, as originally in effect
or as amended, modified or supplemented in accordance with the terms of the
Intercreditor Agreement.
"First Lien Credit Documents" means all "Loan Documents" as defined in the
First Lien Credit Agreement.
"First Lien Loan" means, collectively, the commitments and the loans made
from time to time to Borrower by lenders party to the First Lien Credit
Agreement.
"First Priority" means, with respect to any Lien purported to be created
pursuant to any First Lien Credit Documents, that such Lien is the only Lien to
which the underlying property or assets is subject, other than (i) any Permitted
Encumbrances, (ii) the Liens securing the Loan, subject to the terms of the
Intercreditor Agreement and (iii) subject to the Subordination Agreements, the
Liens securing the Subordinated Debt.
"First Tier Leverage Ratio" means, as of any date of determination, the
ratio of (a) the outstanding First Lien Loans as of such date of determination
to (b) EBITDA for the trailing twelve consecutive months ending on or
immediately prior to such date of determination.
"Fiscal Month" means any of the monthly accounting periods of Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of Borrower,
ending on March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year" means any of the annual accounting periods of Borrower ending
on December 31 of each year.
"Fixed Charges" means, with respect to any Person for any fiscal period, (a)
the aggregate of all Interest Expense paid in cash during such period, plus (b)
scheduled payments of principal with respect to Indebtedness (other than
Permitted Insurance Premium Indebtedness to the extent that such payments are
characterized as operating expenses of the Borrower and payments made to holders
of Subordinated Debt to the extent permitted under Section 1.4) during such
period.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
fiscal period, the ratio of (x) (i) EBITDA minus (ii) Capital Expenditures paid
in cash during such period (excluding Capital Expenditures made by the Borrower
during such period that are financed entirely with the proceeds of CapEx Loans
(as defined in the First Lien Credit Agreement)) minus (iii) income taxes paid
in cash during such period to (y) Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party.
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"Funded Debt" means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrower, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United States
of America consistently applied, as such term is further defined in Annex F to
this Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means any "goods" as defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, including embedded software to
the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Guaranteed Indebtedness" means as to any Person, any obligation of such
Person guaranteeing, providing comfort or otherwise supporting any Indebtedness,
lease, dividend, or other obligation ("primary obligation") of any other Person
(the "primary obligor") in any manner, including any obligation or arrangement
of such Person to (a) purchase or repurchase any such primary obligation, (b)
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
incurred and (y) the maximum amount for which such Person may be liable pursuant
to the terms of the instrument embodying such Guaranteed Indebtedness, or, if
not stated or determinable, the maximum reasonably anticipated liability
(assuming full performance) in respect thereof.
"Guaranties" means, collectively, each guaranty executed by any Guarantor in
favor of Agent and Lenders in respect of the Obligations.
"Guarantors" means each Subsidiary of Borrower, and each other Person, if
any, that executes a guaranty or other similar agreement in favor of Agent, for
itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by this Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred 6 months or more, but excluding
obligations to trade creditors incurred in the ordinary course of business that
are unsecured and not overdue by more than 6 months unless being contested in
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
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property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.13.
"Indemnified Person" has the meaning ascribed to it in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher of (i)
the rate publicly quoted from time to time by The Wall Street Journal as the
"prime rate" (or, if The Wall Street Journal ceases quoting a prime rate, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus fifty (50) basis points per annum. Each change in any interest
rate provided for in this Agreement based upon the Index Rate shall take effect
at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, wherever located, and, in
any event, including all certificated securities, all certificates of deposit,
and all promissory notes and other evidences of indebtedness, other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of the
Closing Date, between Agent and the First Lien Agent, and acknowledged and
agreed to by the Credit Parties.
"Interest Expense" means, with respect to any Person for any fiscal period,
interest expense (whether or not paid in cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person but excluding
interest expense with respect to any Permitted
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Insurance Premium Indebtedness of such Person and interest expense for the
relevant period that has been capitalized on the consolidated balance sheet of
Borrower.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that
in the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and provided that, in addition to the foregoing, each of (x) the date
upon which all of the Commitments have been terminated and the Loans have been
paid in full and (y) the Maturity Date shall be deemed to be an "Interest
Payment Date" with respect to any interest that has then accrued under this
Agreement.
"Inventory" means any "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit
Party; (iv) all commodity contracts of any Credit Party; and (v) all commodity
accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"Junior Capital" means (i) all Subordinated Notes and all Stock of the
Borrower owned by St. Xxxxx and the other Subordinated Noteholders as of the
Closing Date, (ii) the Stock of the Borrower issued in exchange for warrants,
Subordinated Notes and other convertible securities pursuant to those certain
Recapitalization Agreements, dated October 2005 and November 2005, between the
Borrower and the other parties thereto, and (iii) for purposes of Section
1.3(b)(ii), (A) the fee referred to in Section 6.14(f) and (B) the Change of
Control Payments referred to in Section 6.14(g)(2).
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"Lenders" means the lenders named on the signature pages of this Agreement,
and, if any such Lender shall decide to assign all or any portion of the
Obligations, such term shall include any assignee of such Lender.
"Lender Securities" means all Stock, Stock Equivalents, voting trust
certificates, bonds, debentures, instruments and other evidence of
Indebtedness, whether or not secured, convertible or subordinated, all
certificates of interest, share or participation in, all certificates for the
acquisition of, and all warrants, options and other rights to acquire, any
Lender Securities.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"Leverage Ratio" means, with respect to Borrower, on a consolidated basis,
the ratio of (a) Funded Debt (excluding the Subordinated Debt) as of any date
of determination to (b) the sum of EBITDA for the twelve months ending on that
date of determination.
"LIBOR Business Day" means a Business Day on which banks in the City of
London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period commencing
on a LIBOR Business Day selected by Borrower pursuant to this Agreement and
ending one, two, three or six months thereafter, as selected by Borrower's
irrevocable notice to Agent as set forth in Section 1.5(e); provided, that the
foregoing provision relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end
on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Maturity Date
shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Period) shall end on the
last LIBOR Business Day of a calendar month;
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(d) Borrower shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be no more than
3 separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined by
Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first
day of such LIBOR Period (unless such date is not a Business Day, in which
event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements in effect
on the day that is two (2) LIBOR Business Days prior to the beginning of such
LIBOR Period (including basic, supplemental, marginal and emergency reserves
under any regulations of the Federal Reserve Board or other Governmental
Authority having jurisdiction with respect thereto, as now and from time to
time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) that
are required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower.
"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan" has the meaning assigned to it in Section 1.1(b)(i).
"Loan Account" has the meaning ascribed to it in Section 1.12.
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"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
and all other agreements, instruments, documents and certificates identified in
the Closing Checklist executed and delivered to, or in favor of, Agent or any
Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with this Agreement or the transactions contemplated thereby. Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Loan Document as the same may be in effect at any and
all times such reference becomes operative.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Credit Party, (b) any Credit Party's ability to pay any of the Loans or any of
the other Obligations in accordance with the terms of this Agreement or any
other Loan Document, (c) the Collateral or Agent's Liens, on behalf of itself
and Lenders, on the Collateral or the priority of such Liens, or (d) Agent's or
any Lender's rights and remedies under this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, it shall also
constitute a Material Adverse Effect if at any time the "Average Rig Count" for
the United States (excluding Canada and International rigs) published from time
to time by Xxxxx Xxxxxx, Inc. falls below 800 for 12 consecutive weeks.
"Maturity Date" means the earliest of (a) March 16, 2009 and (b) the date of
indefeasible prepayment in full by Borrower of the Loans.
"Mortgaged Properties" has the meaning assigned to it in Annex C.
"Mortgages" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Credit Party to Agent on behalf
of itself and Lenders with respect to the Mortgaged Properties, all in form and
substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.
"Net Equity Proceeds" has the meaning ascribed to it in Section 1.3(b)(v).
"Note" has the meaning assigned to it in Section 1.1(b)(i).
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
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"Obligations" means all loans, advances, debts, liabilities and obligations
for the performance of covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or contingent, or
such amounts are liquidated or determinable) owing by any Credit Party to Agent
or any Lender, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement
or other instrument, arising under this Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under this Agreement or any of the other Loan Documents.
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements made in
favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
"Patents" means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens for
taxes or assessments or other governmental Charges not yet due and payable or
which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding
aggregate amount not in excess of $50,000 at any time, so long as such Liens
attach only to Inventory; (f) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which any Credit Party is a party; (g) any
attachment or judgment lien not constituting an Event of Default under Section
8.1(j); (h) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not
A-18
materially impair the use, value, or marketability of such Real Estate; (i)
presently existing or hereafter created Liens in favor of Agent, on behalf of
Lenders; (j) Liens expressly permitted under clauses (b) and (c) of Section 6.7
of this Agreement.
"Permitted Insurance Premium Indebtedness" shall mean Indebtedness of the
Borrower incurred to finance insurance premiums of the Borrower in the ordinary
course of business.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in Section
3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains, contributes
to or has an obligation to contribute to or has maintained, contributed to or
had an obligation to contribute to at any time within the past 7 years on
behalf of participants who are or were employed by any Credit Party or ERISA
Affiliate.
"Pledge Agreement" means the Pledge Agreement of even date herewith executed
by certain of the Credit Parties in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of Subsidiaries of the Borrower.
"Proceeds" means "proceeds," as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party 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 Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting
under color of governmental authority), (c) any claim of any Credit Party
against third parties (i) for past, present or future infringement of any
Patent or Patent License, or (ii) for past, present or future infringement or
dilution of any Copyright, Copyright License, Trademark or Trademark License,
or for injury to the goodwill associated with any Trademark or Trademark
License, (d) any recoveries by any Credit Party against third parties with
respect to any litigation or dispute concerning any of the Collateral including
claims arising out of the loss or nonconformity of, interference with the use
of, defects in, or infringement of rights in, or damage to, Collateral, (e) all
amounts collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to
payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of Collateral.
"Pro Forma" means the unaudited consolidated and consolidating balance sheet
of Borrower and its Subsidiaries as of October 31, 2005 after giving pro forma
effect to the Related Transactions.
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"Projections" means Borrower's forecasted consolidated and consolidating:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary-by-Subsidiary
or division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of Borrower, together with appropriate
supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any Lender,
the percentage obtained by dividing (i) such Lender's Loan by (ii) the
aggregate Loans of all Lenders, as such percentages may be adjusted by
assignments permitted pursuant to Section 9.1.
"Qualified Plan" means a Pension Plan that is intended to be tax-qualified
under Section 401(a) of the IRC.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Register" means a record of ownership in which the Agent agrees to register
by book entry the interests (including any rights to receive payment hereunder)
of the Agent and each Lender in the Loans, each of their obligations under this
Agreement to participate in each Loan and any assignment of any such interest,
obligation or right.
"Related Transactions" means the funding of the Loan on the Closing Date,
the consummation of the Acquisition, the extension of the maturity date of the
Subordinated Notes to a date no earlier than ninety (90) days after the
Maturity Date and the effectiveness of all other amendments thereto
contemplated hereby, the funding of the First Lien Loan, the payment of all
fees, costs and expenses associated with all of the foregoing and the execution
and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents, the Subordination
Agreements, Subordinated Notes, the Acquisition Agreement (and all documents
and agreements executed or delivered in connection therewith), the First Lien
Credit Documents, the Intercreditor Agreement, the Centre Partner Settlement
Documents and all other agreements or instruments executed in connection with
the Related Transactions.
"Release" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
"Requisite Lenders" means Lenders having more than 66 2/3% of the aggregate
outstanding amount of all Loans; provided, however, that so long as there is
more than one Lender, in no event shall Requisite Lenders be less than two
Lenders.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of
A-20
the purchase, redemption, defeasance, sinking fund or other retirement of such
Credit Party's Stock or any other payment or distribution made in respect
thereof, either directly or indirectly; (c) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer
of funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Credit Party; (g) any payment of management fees (or
other fees of a similar nature) by such Credit Party to any Stockholder of such
Credit Party or its Affiliates; and (h) any Change of Control Payments paid in
cash.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Second Lien Agent" has the meaning ascribed thereto in the preamble to this
Agreement.
"Second Priority" means, with respect to any Lien purported to be created
pursuant to any Collateral Documents, that such Lien is the only Lien to which
the underlying property or assets is subject, other than (i) any Permitted
Encumbrances, (ii) the Liens securing the First Lien Loan and (iii) subject to
the Subordination Agreements, the Liens securing the Subordinated Debt.
"Security Agreement" means the Amended and Restated Security Agreement,
dated as of the Closing Date entered into by and among Agent, on behalf of
itself and Lenders, and each Credit Party.
"Sellers" mean, collectively, Xxxxx Xxx Xxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxx
and Xxxxx Capital I, L.P., a Texas limited partnership.
"Significant Lender" shall mean any Lender that, together with all of its
Affiliates, Approved Funds and lenders (in their capacities as such), holds at
least 50% of the outstanding Loans.
"Software" means all "software" as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, other than software embedded
in any category of
A-21
Goods, including all computer programs and all supporting information provided
in connection with a transaction related to any program.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about
to engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"SPV" means any special purpose funding vehicle identified as such in a
writing by any Lender to the Agent.
"St. Xxxxx" means, collectively, St. Xxxxx Capital Corp., a Delaware
corporation, St. Xxxxx Capital Partners, L.P., a Delaware limited partnership,
SJMB, LP, a Delaware limited partnership, and SJMB, LLC, a Delaware limited
liability company.
"Stock" means all shares, options, warrants, Stock Equivalents, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stock Equivalents" means all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.
"Stockholder" means, with respect to any Person, each holder of Stock of
such Person.
"Subordinated Debt" means the Indebtedness of Borrower evidenced by the
Subordinated Notes and any other Indebtedness of any Credit Party subordinated
to the Obligations in a manner and form satisfactory to Lenders in their sole
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.
"Subordinated Note Holders" shall mean each of the Persons listed on
Disclosure Schedule 3.24.
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"Subordinated Notes" means those certain promissory notes issued by Borrower
and described on Disclosure Schedule 3.24.
"Subordination Agreements" shall mean the those certain Amended and Restated
Subordination Agreements, dated as of the Closing Date, by and among the
Subordinated Note Holders, the Agent, the First Lien Agent and Borrower, as
amended, restated, reaffirmed or otherwise modified from time to time with the
consent of the Requisite Lenders.
"Subsidiary" means, with respect to any Person, (a) any corporation of which
an aggregate of more than 50% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person
is a general partner or may exercise the powers of a general partner. Unless
the context otherwise requires, each reference to a Subsidiary shall be a
reference to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even date herewith
executed by each Subsidiary of Borrower in favor of Agent, on behalf of itself
and Lenders.
"Supporting Obligations" means all "supporting obligations" as such term is
defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on or
measured by the net income of Agent or a Lender by the jurisdictions under the
laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under this Agreement and
the other Loan Documents have been completely discharged, and (c) Borrower
shall not have any further right to borrow any monies under this Agreement.
"Term Lenders" means those Lenders having Commitments.
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan), that
is covered by Title IV of ERISA, and that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
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"Trademark Security Agreements" means the Trademark Security Agreements made
in favor of Agent, on behalf of Lenders, by each applicable Credit Party.
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature
(whether registered or unregistered), all registrations and recordings thereof,
and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets
of such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
Rules of construction with respect to accounting terms used in this
Agreement or the other Loan Documents shall be as set forth in Annex F. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in this Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained
in this Agreement. The words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in this Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words
A-24
"without limitation; the word "or" is not exclusive; references to Persons
include their respective successors and assigns (to the extent and only to the
extent permitted by the Loan Documents) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations. Whenever any provision in
any Loan Document refers to the knowledge (or an analogous phrase) of any
Credit Party, such words are intended to signify that such Credit Party has
actual knowledge or awareness of a particular fact or circumstance or that such
Credit Party, if it had exercised reasonable diligence, would have known or
been aware of such fact or circumstance.
A-25
ANNEX B
TO
CREDIT AGREEMENT
INTENTIONALLY OMITTED
B-1
ANNEX C (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.1 of this Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Lenders on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in Annex A to this Agreement,
and the funding of the Loans to evidence the satisfaction of the Lenders):
A. Appendices. All Appendices to this Agreement.
B. Notes. Duly executed originals of the Notes for each Lender, dated the
Closing Date.
C. Security Agreement. Duly executed originals of the Security Agreement,
dated the Closing Date, from each Credit Party, and all instruments, documents
and agreed executed pursuant thereto, including without limitation the powers
of attorney contemplated thereby.
D. Insurance. Satisfactory evidence that (i) the insurance policies required
by Section 5.4 are in full force and effect (except to the extent permitted to
be delivered after the Closing Date pursuant to Section 5.13), together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements in favor of Agent, on behalf of Lenders, and (ii) all key-man life
insurance policies required under Section 5.4(d) have been assigned to Agent,
with the written consent and acknowledgment of the Borrower and the insurer
issuing such policies.
E. Security Interests and Code Filings.
(1) Evidence that Agent (for the benefit of itself and Lenders) has a
valid and perfected Second Priority Lien in the Collateral subject, as to
priority, only to Permitted Encumbrances and Liens securing the First Lien Loan
(and not to Liens securing any Subordinated Debt), including (i) such documents
duly executed or authorized (with respect to UCC financing statements) by each
Credit Party (including UCC financing statements under the Code and other
applicable documents under the laws of any jurisdiction with respect to the
perfection of Liens) as Lenders may request in order to perfect its security
interests in the Collateral, and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for (i) Permitted Encumbrances, (ii) the Liens securing the
First Lien Loan and (iii) subject to the Subordination Agreements, the Liens
securing the Subordinated Debt.
C-1
(b) Evidence, including copies, of all UCC and other financing
statements filed in favor of any Credit Party with respect to each location, if
any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities
and financial assets held by any Credit Party, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of any Credit Party, and (iii) all futures commission agents and
clearing houses with respect to all commodities contracts and commodities
accounts held by any Credit Party.
F. Payoff Letter; Termination Statements. Copies of duly executed payoff
letters from each of Comerica Bank, Xxxxx Xxx Xxxx and Superior Snubbing
Services, Inc. evidencing the repayment in full of all Indebtedness and related
obligations owed by Bobcat and its Subsidiaries to such parties, together with
(a) authorization for Borrower to file such UCC termination statements,
releasing all Liens of such lenders on any property of any Credit Party, (b)
such other releases and other termination statements, requested by and in form
and substance satisfactory to Agent, manually executed by such lenders and (c)
termination of all blocked account agreements, bank agency agreements or other
similar agreements or arrangements in favor of such lenders or relating to the
Indebtedness owed to such lenders.
G. Intellectual Property Security Agreements. Duly executed originals of
Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Closing Date and signed by each Credit
Party that owns Trademarks, Copyrights and/or Patents, as applicable, together
with all instruments, documents and agreements executed pursuant thereto.
H. Subsidiary Guaranty Agreement. Duly executed originals of the
Subsidiary Guaranty, executed by and each direct and indirect Subsidiary of
Borrower in favor of Agent, for the benefit of Lenders.
I. Intentionally Omitted.
J. Intentionally Omitted.
K. Letter of Direction. Duly executed originals of a letter of direction
from Borrower addressed to Agent, on behalf of itself and Lenders, with respect
to the disbursement on the Closing Date of the proceeds of the Loan.
L. Control Agreements. Evidence that, as of the Closing Date, Control
Agreements with the First Lien Agent, Borrower or the applicable Subsidiary,
and the banks and securities intermediaries with whom Borrower and its
Subsidiaries maintain deposit or securities accounts, granting Second Priority
Liens to Agent in such accounts.
M. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of
C-2
tax status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority.
N. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's board of directors approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of
the Closing Date by such Person's corporate secretary or an assistant secretary
as being in full force and effect without any modification or amendment.
O. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of
the Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
P. Opinions of Counsel. Duly executed originals of opinions of Rosen,
Cook, Sledge, Davis, Xxxx & Xxxxxxxx, P.A., counsel for the Credit Parties,
together with any local counsel opinions to the extent delivered to the First
Lien Agent, each dated the Closing Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and directing
such counsel to address its opinion to Agent, on behalf of Lenders, and to
include in such opinion an express statement to the effect that Agent and
Lenders are authorized to rely on such opinion.
Q. Pledge Agreement. Duly executed originals of the Pledge Agreement
accompanied by (a) share certificates representing all of the outstanding Stock
being pledged pursuant to such Pledge Agreement and stock powers for such share
certificates executed in blank and (b) the original instruments evidencing
Indebtedness being pledged pursuant to the Pledge Agreement, duly endorsed in
blank.
R. Intentionally Omitted.
S. Appointment of Agent for Service. An appointment of CT Corporation as
each Credit Party's agent for service of process.
T. Intentionally Omitted.
U. Officer's Certificate. Duly executed originals of a certificate of the
Chief Executive Officer and Chief Financial Officer of Borrower, dated the
Closing Date, stating that (a) after giving effect to the transactions
contemplated hereby (i) the Leverage Ratio does not exceed 2.5:1.0 and (ii) the
First Tier Leverage Ratio does not exceed 1.5:1.0, and (b) since December 31,
2004 (i) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (ii) there has been
no material adverse change in the industry in which Borrower operates; (iii) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions
C-3
contemplated by this Agreement and the other Loan Documents; (iv) there have
been no Restricted Payments made by any Credit Party; (v) before and after
giving effect to the transactions contemplated by the Credit Agreement, each
Credit Party will be Solvent; and (vi) there has been no material increase in
liabilities, liquidated or contingent, and no material decrease in assets of
Borrower or any of its Subsidiaries.
V. Waivers. Duly executed landlord waivers and consents, bailee letters
and mortgagee agreements, in each case as required pursuant to Section 5.9.
W. Subordination and Intercreditor Agreements. Agent and Lenders shall
have received all subordination and/or intercreditor agreements, all in form
and substance satisfactory to Lenders, in their sole discretion, as Lenders
shall have deemed necessary or appropriate with respect to any Indebtedness of
any Credit Party, including without limitation the Intercreditor Agreement and
the Subordination Agreements, duly executed by all parties thereto. Agent and
Lenders shall have received certified copies of amendments to the Subordinated
Notes extending the maturity date of the Subordinated Notes to no earlier than
ninety one (91) days after the Maturity Date and consenting to the Borrower
incurring the Indebtedness and granting the Liens contemplated under the Loan
Documents and the First Lien Credit Documents, such amendments to be in form
and substance satisfactory to Lenders in their sole discretion and executed by
all holders of the Subordinated Notes.
X. Employment Agreements. Agent shall have received certified copies of
the Employment Agreements.
Y. Financials; Financial Condition. Agent shall have received a copy of
Borrower's Form 10-Q/A filed with the Securities and Exchange Commission for
the Fiscal Quarter ending September 30, 2005, the Financial Statements,
Projections and other materials set forth in Section 3.4, all certified by
Borrower's Chief Financial Officer, in each case in form and substance
reasonably satisfactory to Agent. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer
of Borrower, based on such Pro Forma and Projections, to the effect that (a)
Borrower will be Solvent upon the consummation of the transactions contemplated
herein; (b) the Pro Forma fairly presents the financial condition of Borrower
as of the date thereof after giving effect to the transactions contemplated by
the Loan Documents; (c) the Projections are based upon estimates and
assumptions stated therein, all of which Borrower believes to be reasonable and
fair in light of current conditions and current facts known to Borrower and, as
of the Closing Date, reflect Borrower's good faith and reasonable estimates of
its future financial performance and of the other information projected therein
for the period set forth therein; (d) the Fair Salable Balance Sheet was
prepared on the same basis as the Pro Forma, except that Borrower's assets are
set forth therein at their fair salable values on a going concern basis and the
liabilities set forth therein include all contingent liabilities of Borrower
stated at the reasonably estimated present values thereof; and (e) containing
such other statements with respect to the solvency of Borrower and matters
related thereto as Agent shall request.
Z. Mortgages and Amendments Thereto. If mortgages or deeds of trust are
granted to the First Lien Agent on the Closing Date, Mortgages covering all of
the Real Estate
C-4
owned by the Credit Parties (the "Mortgaged Properties), to the extent
necessary or desirable, together with the following documents to the extent
delivered to the First Lien Agent: (a) title insurance policies issued to the
Agent in form and substance substantially the same as those delivered to the
First Lien Agent, except reflecting the Mortgage as a Second Priority Lien; (b)
evidence that counterparts of the Mortgages have been recorded in all places
that mortgages in favor of the First Lien Agent have been recorded, sufficient
to create a valid and enforceable Second Priority Lien (subject as to priority
only to Permitted Encumbrances and the Lien securing the First Lien Loan, and
not to the Lien securing any Subordinated Debt) on each parcel of such Real
Estate in favor of Agent for the benefit of itself and Lenders (or in favor of
such other trustee as may be required or desired under local law) securing the
Commitments and Obligations; and (c) an opinion of counsel in each state in
which any such Real Estate is located substantially in the form delivered to
the First Lien Agent.
AA. Assignment of Representations, Warranties, Covenants, Indemnities and
Rights. Agent shall have received a duly executed copy of an Assignment of
Representations, Warranties, Covenants, Indemnities and Rights in respect of
Borrower's rights under the Acquisition Agreement, which assignment shall be
expressly permitted under the Acquisition Agreement or shall have been
consented to by the Sellers in writing.
BB. Related Transactions. Agent shall have received certified copies of
all Related Transaction Documents, including without limitation the Acquisition
Agreement and related documents, the First Lien Credit Documents and the Centre
Partners Settlement Documents, all in form and substance satisfactory to
Lenders.
CC. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as the Lenders may, in their sole discretion,
request.
C-5
ANNEX D (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent and
Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty (30) days
after the end of each Fiscal Month, financial information regarding Borrower
and its Subsidiaries, certified by the Chief Financial Officer of Borrower,
consisting of consolidated and consolidating (i) unaudited balance sheets as of
the close of such Fiscal Month and the related statements of income and cash
flows for that portion of the Fiscal Year ending as of the close of such Fiscal
Month; and (ii) unaudited statements of income and cash flows for such Fiscal
Month, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments, and without footnotes or disclosures required by GAAP). Such
financial information shall be accompanied by (A) a statement in reasonable
detail (each, a "Compliance Certificate") showing the calculations used in
determining compliance with each Financial Covenant that is tested on a monthly
basis, and (B) the certification of the Chief Financial Officer of Borrower
that (i) such financial information presents fairly in accordance with GAAP
(subject to normal year-end adjustments) the financial position and results of
operations of Borrower and its Subsidiaries, on a consolidated and
consolidating basis, in each case as at the end of such Fiscal Month and for
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event of
Default.
(b) Quarterly Financials. To Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, consolidated and consolidating
financial information regarding Borrower and its Subsidiaries, certified by the
Chief Financial Officer of Borrower, including (i) unaudited balance sheets as
of the close of such Fiscal Quarter and the related statements of income and
cash flows for that portion of the Fiscal Year ending as of the close of such
Fiscal Quarter; and (ii) unaudited statements of income and cash flows for such
Fiscal Quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments, and without footnotes or disclosures required
by GAAP). Such financial information shall be accompanied by (A) a Compliance
Certificate showing the calculations used in determining compliance with each
Financial Covenant, and (B) the certification of the Chief Financial Officer of
Borrower that (i) such financial information presents fairly in accordance with
GAAP (subject to normal year-end adjustments) the financial position and
results of operations of Borrower and its Subsidiaries, on a consolidated and
consolidating basis, in each case as at the end of such Fiscal Quarter and for
D-1
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event of
Default. In addition, Borrower shall deliver to Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, a management
discussion and analysis that includes a comparison to budget for that Fiscal
Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as available, but not
later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Borrower, on a consolidated and consolidating basis,
approved by the board of directors of Borrower, for the following Fiscal Year,
which (i) includes a statement of all of the material assumptions on which such
plan is based, (ii) includes monthly balance sheets, income statements and
statements of cash flows for the following year and (iii) integrates sales,
gross profits, operating expenses, operating profit, cash flow projections and
Borrowing Availability (as defined in the First Lien Credit Agreement)
projections, all prepared on the same basis and in similar detail as that on
which operating results are reported (and in the case of cash flow projections,
representing management's good faith estimates of future financial performance
based on historical performance), and including plans for personnel, Capital
Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within ninety (90)
days after the end of each Fiscal Year, audited Financial Statements for
Borrower and its Subsidiaries on a consolidated and (unaudited) consolidating
basis, consisting of balance sheets and statements of income and retained
earnings and cash flows, setting forth in comparative form in each case the
figures for the previous Fiscal Year, which Financial Statements shall be
prepared in accordance with GAAP and certified without qualification, by an
independent certified public accounting firm of national standing or otherwise
acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that
a Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Agent, on behalf of itself and Lenders, in
substantially the form of Disclosure Schedule (4.1(a)) signed by such
accounting firm, (iv) the annual letters to such accountants in connection with
their audit examination detailing contingent liabilities and material
litigation matters, and (v) the certification of the Chief Executive Officer or
Chief Financial Officer of Borrower that all such Financial Statements present
fairly in accordance with GAAP the financial position, results of operations
and statements of cash flows of Borrower and its Subsidiaries on a consolidated
and consolidating basis, as at the end of such Fiscal Year and for the period
then ended, and that there was no Default or Event of Default in existence as
of such time or, if a Default or Event of Default shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
D-2
(e) Management Letters. To Agent and Lenders, within five (5) Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such
Credit Party from its independent certified public accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and in
any event within five (5) Business Days after an executive officer of Borrower
has actual knowledge of the existence of any Default, Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business
Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly upon
their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person,
and, within two (2) Business Days after any Credit Party obtains knowledge of
any matured or unmatured event of default with respect to any Subordinated
Debt, notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if any,
required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of $100,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(l) Lease Default Notices. To Agent, within two (2) Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or documents as Agent may reasonably
request.
D-3
(m) Lease Amendments. To Agent, within two (2) Business Days after receipt
thereof, copies of all material amendments to real estate leases.
(n) Hedge Agreements. To Agent, within two (2) Business Days after
entering into such agreement or amendment, copies of all interest rate,
commodity or currency hedging agreements or amendments thereto.
(o) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall from time to time reasonably request.
(p) Weekly Accounts Payable Reports. To Agent and Lenders, as soon as
available, but not later than three (3) Business Days after the end of each
week, a report setting forth an aging of accounts payable.
(q) Cash Budgets. To Agent and Lenders, as soon as available, but not
later than three (3) Business Days after the end of each week, a weekly cash
budget for the immediately following thirteen (13) week period, in form an
substance satisfactory to the Agent in its sole discretion.
D-4
ANNEX E (SECTION 4.1(B))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less frequently than
(i) 15 days after the end of each fiscal month of the Borrower, if no Default
has occurred and is continuing and (ii) 12:00 p.m. (New York time) on Wednesday
of each week if a Default has occurred and is continuing, (together with a copy
of all or any part of the following reports requested by any Lender in writing
after the Closing Date), a Borrowing Base Certificate (as defined in the First
Lien Credit Agreement) with respect to all Credit Parties, accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion, prepared by Borrower as of the last day of the
immediately preceding month or week, as the case may be:
(b) To Agent, on a monthly basis if no Default has occurred and is
continuing, on a weekly basis if a Default has occurred and is continuing, or
at such more frequent intervals as First Lien Agent may request from time to
time (together with a copy of all or any part of such delivery requested by any
Lender in writing after the Closing Date), collateral reports with respect to
the Credit Parties, including all additions and reductions (cash and non-cash)
with respect to Accounts of the Credit Parties, in each case accompanied by
such supporting detail and documentation as shall be requested by First Lien
Agent in its reasonable discretion each of which shall be prepared by the
Credit Parties as of the last day of the immediately preceding month or week,
as the case may be, or the date two (2) days prior to the date of any such
request;
(c) To Agent, at the time of delivery of each of the monthly Financial
Statements delivered pursuant to Annex D, an aging of accounts payable and a
reconciliation of that accounts payable aging to the general ledger of the
Credit Parties and monthly Financial Statements delivered pursuant to Annex D,
in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
(e) To Agent, within thirty (30) days after the end of each Fiscal
Quarter, a detailed list of all Equipment of the Credit Parties, setting forth
additions and deletions of Equipment since the end of the previous Fiscal
Quarter;
(f) To Agent, at the time of delivery of each of the annual Financial
Statements delivered pursuant to Annex D, (i) a listing of government contracts
of the Credit Parties subject to the Federal Assignment of Claims Act of 1940;
and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright filed by any Credit Party with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in the prior Fiscal Quarter;
E-1
(g) Borrower, at its own expense, shall deliver to Agent the results of
each physical verification, if any, that Borrower or any of its Subsidiaries
may in their discretion have made, or caused any other Person to have made on
their behalf, of all or any portion of their Inventory (including all Inventory
consisting of tools), which the Credit Parties shall conduct no less frequently
than semi-annually (and, if a Default or an Event of Default has occurred and
is continuing, the Credit Parties shall, upon the request of Agent, conduct,
and deliver the results of, such physical verifications as Agent may require);
(h) Borrower, at its own expense, shall deliver to Agent such appraisals
of the Forced Liquidation Value (as defined in the First Lien Credit Agreement)
(and other values if requested by Agent) of the Eligible Term Equipment (as
defined in the First Lien Credit Agreement) and Eligible CapEx Equipment (as
defined in the First Lien Credit Agreement) performed by Acceptable Appraisers
(as defined in the First Lien Credit Agreement), promptly upon Agent's request,
such appraisals to be conducted no more frequently than once per year, unless a
Default or Event of Default has occurred and is continuing, and then as
frequently as First Lien Agent may request, such appraisals to be in form and
substance reasonably satisfactory to Agent; Borrower, at its own expense, shall
also deliver such appraisals of its other assets to Agent after the occurrence
and during the continuance of a Default or an Event of Default promptly upon
First Lien Agent's request, such appraisals to be conducted by an appraiser,
and in form and substance, reasonably satisfactory to Agent; and
(i) Such other reports, statements and reconciliations with respect to the
Borrowing Base (as defined in the First Lien Credit Agreement), Collateral or
Obligations of any or all Credit Parties as Agent shall from time to time
request in its reasonable discretion.
All reports, statements and reconciliations described in this Annex E shall
be delivered to Agent at its address set forth on Annex H, with no copies to
its outside or internal counsel, but with copies to:
General Electric Capital Corporation
000 Xxxxxxx 0
Xxxxxxx, XX 00000-0000
Attention: Operations Department
Telecopier No.: (000) 000-0000
E-2
ANNEX F (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Maximum Capital Expenditures. Commencing with Fiscal Year 2006,
Borrower and its Subsidiaries on a consolidated basis shall not make Capital
Expenditures (other than Capital Expenditures financed entirely by CapEx Loans
(as defined in the First Lien Credit Agreement)) in excess of $6,500,000 in any
Fiscal Year; provided, however, that the foregoing amount of permitted Capital
Expenditures will be increased in any period by the positive amount (if any)
equal to $6,500,000 minus the actual amount of any Capital Expenditures
expended during such prior period (the "Carry Over Amount"), and for purposes of
measuring compliance herewith, the Carry Over Amount shall be deemed to be the
last amount spent on Capital Expenditures in that succeeding year.
(b) Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
shall have, on a consolidated basis at the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending March 31, 2006, a Fixed Charge
Coverage Ratio for the 12-month period then ended of not less than 1.50:1.0;
provided, however, that for the purpose of calculating the Fixed Charge
Coverage Ratio for the Fiscal Quarters ending March 31, 2006, June 30, 2006 and
September 30, 2006, EBITDA and Fixed Charges shall be measured for the period
commencing on January 1, 2006 and ending on the last day of such Fiscal
Quarter.
(c) Maximum Leverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Month set forth below,
a Leverage Ratio as of the last day of such Fiscal Month and for the 12-month
period then ended of not more than the following
2.25:1.00 for the Fiscal Months ending on January 31, 2006 through
March 31, 2006;
2.25:1.00 for the Fiscal Months ending on April 30, 2006 through
June 30, 2006;
2.00:1.00 for the Fiscal Months ending on July 31, 2006 through
September 30, 2006;
2.00:1.00 for the Fiscal Months ending on October 30, 2006 through
December 31, 2006;
2.00:1.00 for the Fiscal Months ending on January 31, 2007 through
March 31, 2007; and
1.75:1.00 for each Fiscal Month ending thereafter.
F-1
(d) Minimum EBITDA. Borrower and its Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Month set forth below, EBITDA for the 12-
month period then ended of not less than the following:
$33,000,000 for the Fiscal Months ending on January 31, 2006 through
March 31, 2006;
$33,000,000 for the Fiscal Months ending on April 30, 2006 through
June 30, 2006;
$34,000,000 for the Fiscal Months ending on July 31, 2006 through
September 30, 2006;
$34,000,000 for the Fiscal Months ending on October 30, 2006 through
December 31, 2006; and
$35,000,000 for each Fiscal Months ending thereafter.
Unless otherwise specifically provided herein, any accounting term used in
this Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in this Agreement or any other
Loan Document, then Borrower, Agent and Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrower's and its Subsidiaries financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders
to any required amendments of such provisions shall be sufficient to bind all
Lenders. "Accounting Changes" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by Borrower's
certified public accountants; (iii) purchase accounting adjustments under
A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting
principles set forth in FASB 109, including the establishment of reserves
pursuant thereto and any subsequent reversal (in whole or in part) of such
reserves; and (iv) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period. If Agent, Borrower and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in this Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrower and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all
F-2
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with this Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the
underlying Accounting Change. For purposes of Section 8.1, a breach of a
Financial Covenant contained in this Annex F shall be deemed to have occurred
as of any date of determination by Agent or as of the last day of any specified
measurement period, regardless of when the Financial Statements reflecting such
breach are delivered to Agent.
F-3
ANNEX G (SECTION 9.9(A))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFA6078
G-1
ANNEX H (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent, at
General Electric Capital Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Black Warrior Wireline Corp. Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
King & Spalding LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, at
Black Warrior Wireline Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
with copies to:
X-0
Xxxxx, Xxxx, Sledge, Davis, Xxxx & Xxxxxxxx, P.A.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
X-0
XXXXX 0 (XXXX XXXXX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Commitment: Lender(s)
$12,500,000 Monroe Capital Advisors LLC
$12,500,000 General Electric Capital Corporation
Annex 1 - 1
