____________________________________________________________________________
____________________________________________________________________________
LOAN AND SECURITY AGREEMENT
DATED AS OF JUNE 29, 1994
AMONG
EMPIRE GAS CORPORATION, AS BORROWER,
CONTINENTAL BANK N.A., AS AGENT AND A LENDER,
AND
THE OTHER LENDERS PARTY HERETO
____________________________________________________________________________
____________________________________________________________________________
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TABLE OF CONTENTS
Page
1. DEFINITIONS AND OTHER TERMS. . . . . . . . . . . . . . . . . . . . . . 5
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . 5
1.2 Other Definitional Provisions . . . . . . . . . . . . 20
1.3 Interpretation of Agreement . . . . . . . . . . . . . 20
1.4 Compliance with Financial Restrictions. . . . . . . . 20
2. LOANS; LETTERS OF CREDIT; OTHER MATTERS. . . . . . . . . . . . . . . . 20
2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . 20
2.2 Letters of Credit . . . . . . . . . . . . . . . . . . 22
2.3 Loan Account; Demand Deposit Account. . . . . . . . . 24
2.4 Interest and Fees . . . . . . . . . . . . . . . . . . 25
2.5 Requests for Loans; Borrowing Base Certificates;
Other Information . . . . . . . . . . . . . . . . . . 25
2.6 Statements. . . . . . . . . . . . . . . . . . . . . . 26
2.7 Overdraft Loans . . . . . . . . . . . . . . . . . . . 26
2.8 Over Advances . . . . . . . . . . . . . . . . . . . . 27
2.9 All Loans One Obligation. . . . . . . . . . . . . . . 27
2.10 Making of Payments; Application of Collections;
Charging of Accounts. . . . . . . . . . . . . . . . . 27
2.11 Agent's Election Not to Enforce . . . . . . . . . . . 29
2.12 Reaffirmation . . . . . . . . . . . . . . . . . . . . 29
2.13 Setoff. . . . . . . . . . . . . . . . . . . . . . . . 29
2.14 Closing Fee . . . . . . . . . . . . . . . . . . . . . 29
2.15 Settlements, Distributions and Apportionment of
Payments. . . . . . . . . . . . . . . . . . . . . . . 29
3. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.1 Grant of Security Interest. . . . . . . . . . . . . . 30
3.2 Accounts Receivable . . . . . . . . . . . . . . . . . 31
3.3 Inventory . . . . . . . . . . . . . . . . . . . . . . 34
3.4 Supplemental Documentation. . . . . . . . . . . . . . 35
3.5 Collateral for the Benefit of Agent and Lenders . . . 35
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 36
4.1 Organization. . . . . . . . . . . . . . . . . . . . . 36
4.2 Authorization . . . . . . . . . . . . . . . . . . . . 36
4.3 No Conflicts. . . . . . . . . . . . . . . . . . . . . 36
4.4 Validity and Binding Effect . . . . . . . . . . . . . 37
4.5 No Default. . . . . . . . . . . . . . . . . . . . . . 37
4.6 Financial Statements. . . . . . . . . . . . . . . . . 37
4.7 Insurance . . . . . . . . . . . . . . . . . . . . . . 37
4.8 Litigation; Contingent Liabilities. . . . . . . . . . 37
4.9 Liens . . . . . . . . . . . . . . . . . . . . . . . . 38
4.10 Subsidiaries. . . . . . . . . . . . . . . . . . . . . 38
4.11 Partnerships; Joint Ventures. . . . . . . . . . . . . 38
4.12 Business and Collateral Locations . . . . . . . . . . 38
4.13 Senior Notes. . . . . . . . . . . . . . . . . . . . . 39
4.14 Eligibility of Collateral . . . . . . . . . . . . . . 39
4.15 Intentionally Omitted . . . . . . . . . . . . . . . . 39
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4.16 Patents, Trademarks, etc. . . . . . . . . . . . . . . 39
4.17 Solvency. . . . . . . . . . . . . . . . . . . . . . . 39
4.18 Contracts; Labor Matters. . . . . . . . . . . . . . . 39
4.19 Pension and Welfare Plans . . . . . . . . . . . . . . 40
4.20 Regulations G and U . . . . . . . . . . . . . . . . . 40
4.21 Compliance. . . . . . . . . . . . . . . . . . . . . . 40
4.22 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 40
4.23 Investment Company Act Representation . . . . . . . . 41
4.24 Public Utility Holding Company Act Representation . . 41
4.25 Environmental and Safety and Health Matters . . . . . 41
4.26 Related Agreements. . . . . . . . . . . . . . . . . . 42
4.27 Capitalized Lease Obligations . . . . . . . . . . . . 42
5. BORROWER COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 Financial Statements and Other Reports. . . . . . . . 42
5.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 44
5.3 Existence . . . . . . . . . . . . . . . . . . . . . . 47
5.4 Nature of Business. . . . . . . . . . . . . . . . . . 47
5.5 Books, Records and Access . . . . . . . . . . . . . . 47
5.6 Insurance . . . . . . . . . . . . . . . . . . . . . . 48
5.7 Intentionally Omitted . . . . . . . . . . . . . . . . 48
5.8 Repair. . . . . . . . . . . . . . . . . . . . . . . . 48
5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 48
5.10 Compliance. . . . . . . . . . . . . . . . . . . . . . 49
5.11 Pension Plans . . . . . . . . . . . . . . . . . . . . 49
5.12 Merger, Purchase and Sale . . . . . . . . . . . . . . 49
5.13 Restricted Payments . . . . . . . . . . . . . . . . . 49
5.14 Borrower's and Subsidiaries' Stock. . . . . . . . . . 50
5.15 Indebtedness. . . . . . . . . . . . . . . . . . . . . 50
5.16 Liens . . . . . . . . . . . . . . . . . . . . . . . . 50
5.17 Guaranties. . . . . . . . . . . . . . . . . . . . . . 51
5.18 Investments . . . . . . . . . . . . . . . . . . . . . 51
5.19 Subsidiaries. . . . . . . . . . . . . . . . . . . . . 51
5.20 Intentionally Omitted . . . . . . . . . . . . . . . . 52
5.21 Change in Accounts Receivable . . . . . . . . . . . . 52
5.22 Environmental Issues. . . . . . . . . . . . . . . . . 52
5.23 Related Agreements. . . . . . . . . . . . . . . . . . 52
5.24 Unconditional Purchase Options. . . . . . . . . . . . 52
5.25 Use of Proceeds . . . . . . . . . . . . . . . . . . . 53
5.26 Transactions with Related Parties . . . . . . . . . . 53
5.27 Amendment of Documents. . . . . . . . . . . . . . . . 53
6. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.1 Event of Default. . . . . . . . . . . . . . . . . . . 53
6.2 Effect of Event of Default; Remedies. . . . . . . . . 56
7. ADDITIONAL PROVISIONS REGARDING COLLATERAL AND AGENT'S RIGHTS. . . . . 57
7.1 Notice of Disposition of Collateral . . . . . . . . . 57
7.2 Application of Proceeds of Collateral . . . . . . . . 57
7.3 Care of Collateral. . . . . . . . . . . . . . . . . . 57
7.4 Performance of Borrower's Obligations . . . . . . . . 57
7.5 Agent's Rights. . . . . . . . . . . . . . . . . . . . 57
8. CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER MATTERS. . . . . 58
8.1 Conditions Precedent to Initial Loans . . . . . . . . 58
8.2 Continuing Conditions Precedent to all Loans;
Certification . . . . . . . . . . . . . . . . . . . . 62
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9. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.1 Environmental and Safety and Health Indemnity . . . . 63
9.2 General Indemnity . . . . . . . . . . . . . . . . . . 63
9.3 Capital Adequacy. . . . . . . . . . . . . . . . . . . 64
10. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.1 Appointment of Agent. . . . . . . . . . . . . . . . . 64
10.2 Nature of Duties of Agent . . . . . . . . . . . . . . 64
10.3 Agent in its Capacity as Lender . . . . . . . . . . . 65
10.4 Independent Credit Analysis . . . . . . . . . . . . . 65
10.5 General Immunity. . . . . . . . . . . . . . . . . . . 65
10.6 Action by Agent.. . . . . . . . . . . . . . . . . . . 66
10.7 Right to Indemnity. . . . . . . . . . . . . . . . . . 67
10.8 Rights and Remedies to be Exercised by Agent Only.. . 67
10.9 Agent's Resignation.. . . . . . . . . . . . . . . . . 67
10.10 Disbursement of Proceeds of Loans and Other Advances. 68
10.11 Release of Collateral.. . . . . . . . . . . . . . . . 68
10.12 Agreement to Cooperate. . . . . . . . . . . . . . . . 68
10.13 Sharing of Collateral.. . . . . . . . . . . . . . . . 68
10.14 Lenders to Act as Agents. . . . . . . . . . . . . . . 69
11. ADDITIONAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 69
12. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.1 Borrower Waiver . . . . . . . . . . . . . . . . . . . 69
12.2 Power of Attorney . . . . . . . . . . . . . . . . . . 69
12.3 Expenses; Attorneys' Fees . . . . . . . . . . . . . . 70
12.4 Continental's Fees and Charges. . . . . . . . . . . . 71
12.5 Lawful Interest . . . . . . . . . . . . . . . . . . . 71
12.6 No Waiver by Agent or any Lender; Amendments. . . . . 71
12.7 Termination of Revolving Credit . . . . . . . . . . . 72
12.8 Notices . . . . . . . . . . . . . . . . . . . . . . . 72
12.9 Assignments and Participations; Information . . . . . 73
12.10 Severability. . . . . . . . . . . . . . . . . . . . . 75
12.11 Successors. . . . . . . . . . . . . . . . . . . . . . 75
12.12 Construction. . . . . . . . . . . . . . . . . . . . . 75
12.13 Consent to Jurisdiction . . . . . . . . . . . . . . . 75
12.14 Subsidiary Reference. . . . . . . . . . . . . . . . . 75
12.15 Waiver of Jury Trial. . . . . . . . . . . . . . . . . 75
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LOAN AND SECURITY AGREEMENT
THIS AGREEMENT ("Agreement") is made as of this 29th day of June,
1994 by and among CONTINENTAL BANK N.A. (in its individual capacity,
"Continental"), a national banking association having its principal office
at 231 South LaSalle Street, Chicago, Illinois 60697, as Agent and a Lender
hereunder, the other Lenders from time to time party hereto, and EMPIRE GAS
CORPORATION ("Borrower"), a Missouri corporation having its principal office
at 1700 South Jefferson Street, Lebanon, Missouri 65536.
W I T N E S S E T H:
_ _ _ _ _ _ _ _ _ _
WHEREAS, Borrower may, from time to time, request loans or other
financial accommodations from Lenders, and the parties wish to provide for
the terms and conditions upon which such loans or other financial
accommodations shall be made;
NOW, THEREFORE, in consideration of any loan or advance or grant
of credit (including any loan or advance or grant of credit by renewal or
extension) hereafter made to Borrower by, or on behalf of, Lenders, and for
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS AND OTHER TERMS.
1.1 Definitions. In addition to terms defined elsewhere in
this Agreement or any Supplement, Schedule or Exhibit hereto, when used
herein, the following terms shall have the following meanings (such meanings
shall be equally applicable to the singular and plural forms of the terms
used, as the context requires):
"Account Debtor" means any Person who is or who may become
obligated to Borrower or any Subsidiary under, with respect to, or on
account of an Account Receivable, Contract Right or other Collateral.
"Account Receivable" means any account of Borrower or any
Subsidiary and any other right of Borrower or any Subsidiary to payment for
goods sold or leased or for services rendered, whether or not evidenced by
an instrument or chattel paper and whether or not yet earned by performance.
"Acquisitions" means, collectively, the acquisitions from time to
time by Borrower of other businesses engaged in businesses comparable to
those conducted by Borrower and the Subsidiaries, including without
limitation the acquisition of PSNC Propane Corporation consummated on the
date hereof.
"Adjusted Reference Rate" has the meaning ascribed to such term
in Supplement A.
"Agent" means Continental in its capacity as agent for Lenders
hereunder and under the Related Agreements, or any successor agent pursuant
to Section 10.
"Agreement" means this Loan and Security Agreement, as the same
may be amended, modified or supplemented from time to time.
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"Application" means an application by Borrower, in a form and
containing terms and provisions acceptable to Agent and Issuing Bank, for
the issuance by Issuing Bank of a Letter of Credit.
"Assignee Deposit Account" has the meaning ascribed to such term
in Section 3.2(d).
"Assignment and Acceptance Agreement" means an agreement in the
form of Exhibit D pursuant to which a Lender assigns all or a portion of its
rights, and delegates all or such portion of its obligations, under this
Agreement and the Related Agreements, to another Person.
"Attorneys' Fees" has the meaning ascribed to such term in
Section 12.3.
"Banking Day" means any day other than a Saturday, Sunday or
legal holiday on which banks are authorized or required to be closed for the
conduct of commercial banking business in Chicago, Illinois; provided, with
respect to LIBOR Rate Loans, Banking Days shall not include a day on which
dealings in U.S. Dollars may not be carried on by Continental in the London
interbank LIBOR market.
"Borrower" has the meaning ascribed to such term in the Preamble.
"Borrower Collateral" has the meaning ascribed to such term in
Section 3.1.
"Borrowing Base" has the meaning ascribed to such term in
Supplement A.
"Borrowing Base Certificate" means a certificate in the form of
Exhibit A attached hereto, executed and certified as accurate by an officer
of Borrower designated in writing by Borrower to Lender pursuant to
resolutions of the Board of Directors of Borrower.
"Borrowing Subsidiary" means any Subsidiary identified in writing
to Agent by Borrower from time to time as a Borrowing Subsidiary and that
has satisfied, in form and substance satisfactory to Agent in its sole
discretion, each of the following requirements: (i) such Subsidiary has
executed a guaranty in favor of Agent, for the benefit of itself and
Lenders, pursuant to which such Subsidiary has unconditionally guarantied
the Liabilities; (ii) such Subsidiary has entered into a security agreement
with Agent, for the benefit of itself and Lenders, pursuant to which such
Subsidiary has granted a security interest in its accounts receivable,
inventory, and certain related assets to Agent, for the benefit of itself
and Lenders, as collateral for the guaranty described in clause (i) above,
and Agent, for the benefit of itself and Lenders has a validly perfected
first priority security interest in such assets; (iii) such Subsidiary has
entered into a security agreement with Borrower pursuant to which such
Subsidiary has granted a security interest in its accounts receivable,
inventory, and certain related assets to Borrower as security
for the Intercompany Loans, and Borrower has a validly perfected second
priority security interest in such assets; (iv) such Subsidiary has executed
the Intercompany Agreement and such other agreements, instruments and
documents as Agent shall require in order to evidence such Subsidiary's
Intercompany Loans and (v) Borrower has assigned the proceeds of such
Subsidiary's Intercompany Loan, all of the agreements, instruments and
documents described in clause (iv), and the second priority security
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interest related thereto, to Agent, for the benefit of itself and Lenders.
The Borrowing Subsidiaries as of the date hereof are designated as such on
Schedule 4.10 hereto. Any Subsidiary which is a Restricted Subsidiary shall
be required to be a Borrowing Subsidiary.
"Capitalized Lease" means any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with GAAP.
"Closing Date" means the first date on which Loans are made, or
Letters of Credit are issued, under this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed to also refer to any successor
sections.
"Collateral" means, collectively, (a) Borrower Collateral and (b)
the Obligor Collateral.
"Continental" has the meaning ascribed to such term in the
Preamble.
"Contract Right" means any right of Borrower or any Subsidiary to
payment under a contract for the sale or lease of goods or the rendering of
services, which right is not yet earned by performance.
"Credit" means the facility established under this Agreement
pursuant to which Lenders will make Revolving Loans (the "Revolving Credit")
to Borrower, and/or cause Issuing Bank to issue Letters of Credit for the
account of Borrower.
"Default Rate" means, with respect to a Loan, the rate of
interest which is applicable to such Loan after the occurrence of an Event
of Default, as determined pursuant to Supplement A.
"Demand Deposit Account" has the meaning ascribed to such term in
Section 2.3.
"Depository Accounts" has the meaning ascribed to such term in
Section 3.2(d).
"Disproportionate Advance" has the meaning ascribed to such term
in Section 2.1.1(a).
"Eligible Account Receivable" means an Account Receivable owing
to a Borrowing Subsidiary which meets the following requirements:
(a) it is genuine and in all respects what it purports to
be;
(b) it arises from either (i) the performance of services by
such Borrowing Subsidiary, which services have been fully performed and, if
applicable, acknowledged and/or accepted by the Account Debtor with respect
thereto or (ii) the sale or lease of goods by such Borrowing Subsidiary; and
if it arises from the sale or lease of goods, (A) such goods comply with
such Account Debtor's specifications (if any) and have been shipped to, or
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delivered to and accepted by, such Account Debtor and neither Borrower nor
such Borrowing Subsidiary has knowledge that the Account Debtor has failed
to accept delivery of all or a portion of such goods, and (B) such Borrowing
Subsidiary has possession of shipping and delivery receipts evidencing such
shipment, delivery and acceptance;
(c) it (i) is evidenced by an invoice rendered to the
Account Debtor with respect thereto which (A) is dated not earlier than the
date of shipment or performance and (B) has payment terms not unacceptable
to Agent in its reasonable judgment and (ii) meets the additional Eligible
Account Receivable requirements set forth in Supplement A;
(d) it is not subject to any assignment, claim or Lien,
other than (i) a Lien in favor of Agent, for the benefit of itself and
Lenders, (ii) a Lien in favor of Borrower to secure the Intercompany Loans,
so long as Borrower has assigned such Lien to Agent, for the benefit of
itself and Lenders, (iii) a Lien for current Taxes not delinquent, (iv) a
carrier's, warehouseman's, materialman's or other like statutory Lien
arising in the ordinary course of business and securing obligations which
are not overdue, or (v) a Lien consented to by Agent in writing;
(e) to Borrower's knowledge, it is a valid, legally
enforceable and unconditional obligation of the Account Debtor with respect
thereto, and is not subject to setoff, counterclaim, credit or allowance
(except any credit or allowance which has been deducted in computing the net
amount of the applicable invoice as shown in the original schedule or
Borrowing Base Certificate furnished to Agent identifying or including such
Account Receivable) or adjustment by the Account Debtor with respect
thereto, or to any claim by such Account Debtor denying liability thereunder
in whole or in part, and such Account Debtor has not refused to accept any
of the goods or services which are the subject of such Account Receivable or
offered or attempted to return any of such goods;
(f) to Borrower's knowledge, there are no proceedings or
actions which are then threatened or pending against the Account Debtor with
respect thereto or to which such Account Debtor is a party which might
result in any material adverse change in such Account Debtor's financial
condition or in its ability to pay any Account Receivable in full when due;
(g) it does not arise out of a contract which, by its terms,
forbids, restricts or makes void or unenforceable the assignment by such
Borrowing Subsidiary to Agent, for the benefit of itself and Lenders, of the
Account Receivable arising with respect thereto;
(h) the Account Debtor with respect thereto is not a
Subsidiary, Related Party or Obligor, or a director, officer, employee or
agent of Borrower, a Subsidiary, Related Party or Obligor;
(i) the Account Debtor with respect thereto is a resident or
citizen of, and is located within, the United States of America;
(j) it is not an Account Receivable arising from a "sale on
approval," "sale or return" or "consignment," or subject to any other
repurchase or return agreement;
(k) it is not an Account Receivable with respect to which
possession and/or control of the goods sold giving rise thereto is held,
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maintained or retained by such Borrowing Subsidiary or any Subsidiary,
Related Party or other Obligor (or by any agent or custodian of such
Borrowing Subsidiary, any Subsidiary, Related Party or Obligor) for the
account of or subject to further and/or future direction from the Account
Debtor thereof;
(l) it is not an Account Receivable which in any way fails
to meet or violates any warranty, representation or covenant contained in
this Agreement or any Related Agreement relating directly or indirectly to
Accounts Receivable;
(m) the Account Debtor thereunder is not located in the
States of Indiana, New Jersey or Minnesota; provided, however, that such
restriction shall not apply to an Account Receivable if at the time the
Account Receivable was created and at all times thereafter (i) such Borrow-
ing Subsidiary has filed and has maintained effective a current Notice of
Business Activities Report with the appropriate office or agency of the
State of Indiana, New Jersey or Minnesota, as applicable or (ii) such
Borrowing Subsidiary was and has continued to be exempt from the filing of
such Report and has provided Agent with satisfactory evidence thereof;
(n) it arises in the ordinary course of such Borrowing
Subsidiary's business;
(o) if the Account Debtor is the United States of America or
any department, agency or instrumentality thereof, and the face amount of
such Account Receivable is in excess of $10,000, such Borrowing Subsidiary
has assigned its rights to payment of such Account Receivable to Agent, for
the benefit of itself and Lenders, pursuant to the Assignment of Claims Act
of 1940, as amended;
(p) if Agent in its reasonable business judgment has
established a credit limit for an Account Debtor, the aggregate dollar
amount of Accounts Receivable due from such Account Debtor, including such
Account Receivable, does not exceed such credit limit;
(q) if the Account Receivable is evidenced by chattel paper
or an instrument, (i) Agent shall have specifically agreed in writing to
include such Account Receivable as an Eligible Account Receivable, (ii) only
payments then due and payable under such chattel paper or instrument shall
be included as an Eligible Account Receivable and (iii) the originals of
such chattel paper or instruments have been endorsed and/or assigned and
delivered to Agent, for the benefit of itself and Lenders, in a manner
satisfactory to Agent; and
(r) it is an Account Receivable with respect to which Agent,
for itself and Lenders, has a valid, first priority and fully perfected
Lien.
Agent further reserves the right, from time to time hereafter, to designate
as ineligible specific Accounts Receivable that meet the aforementioned
criteria for Eligible Accounts Receivable if either (i) such Accounts
Receivable are deemed by Agent, in its reasonable business judgment, to be
unacceptable or (ii) Agent determines, in its reasonable business judgment,
that the prospect of payment or performance by the Account Debtor with
respect thereto is or will be impaired for any reason whatsoever. An
Account Receivable which is at any time an Eligible Account Receivable, but
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which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Account Receivable.
"Eligible Inventory" means Inventory of propane gas and other
hard good inventory (exclusive of propane gas tanks held for sale, other
than twenty pound propane gas grill tanks held for resale) of Borrower or
any Borrowing Subsidiary, which meets the following requirements:
(a) it is owned by Borrower or a Borrowing Subsidiary and is
not subject to any prior assignment, claim or Lien, other than (i) a Lien in
favor of Agent, for the benefit of itself and Lenders, (ii) a Lien in favor
of Borrower to secure the Intercompany Loans, so long as Borrower has
assigned such Lien to Agent, for the benefit of itself and Lenders, and
(iii) Liens consented to by Agent in writing;
(b) if it is a hard good held for sale or lease or
furnishing under contracts of service, it is (except as Agent may otherwise
consent in writing) new and unused;
(c) except as Agent may otherwise consent, it is in the
possession and control of Borrower, a Borrowing Subsidiary or their
respective agents;
(d) if it is in the possession or control of a bailee,
warehouseman, processor or other Person other than Borrower or a Borrowing
Subsidiary, Agent is in possession of such agreements, instruments and
documents as Agent may require (each in form and content acceptable to Agent
and duly executed, as appropriate, by the bailee, warehouseman, processor or
other Person in possession or control of such Inventory, as applicable),
including but not limited to warehouse receipts in Agent's name, for the
benefit of itself and Lenders, covering such Inventory;
(e) it is not Inventory which is dedicated to, identifiable
with, or is otherwise specifically to be used in the manufacture of, goods
which are to be sold or leased to the United States of America or any
department, agency or instrumentality thereof and in respect of which
Inventory Borrower or a Borrowing Subsidiary shall have received any
progress or other advance payment which is or may be against any Account
Receivable generated upon the sale or lease of any such goods;
(f) it is not Inventory produced in violation of the Fair
Labor Standards Act and subject to the "hot goods" provisions contained in
Title 29 U.S.C. Section 215 or any successor statute or section;
(g) it is not (i) packaging or shipping materials, (ii)
goods used in connection with maintenance or repair of Borrower's or a
Borrowing Subsidiary's business, properties or assets, (iii) work-in-process
or (iv) general supplies;
(h) it is not Inventory which in any way fails to meet or
violates any warranty, representation or covenant contained in this
Agreement or any Related Agreement relating directly or indirectly to
Inventory;
(i) Agent has not determined in its reasonable business
judgment that it is unacceptable due to age, type, category, quality and/or
quantity;
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(j) it is Inventory with respect to which (i) Agent, for
itself and Lenders, has a valid, first priority and fully perfected Lien and
(ii) if it is Inventory of a Borrowing Subsidiary, Borrower has a valid,
second priority and fully perfected Lien, and such Lien has been assigned to
Agent, for itself and Lenders; and
(k) it is not Inventory the use of which by Borrower or a
Borrowing Subsidiary or the manufacture or sale thereof by Borrower or a
Borrowing Subsidiary, is subject to any licensing, patent, royalty,
trademark, tradename or copyright agreement of any other Person.
Inventory which is at any time Eligible Inventory but which subsequently
fails to meet any of the foregoing requirements shall forthwith cease to be
Eligible Inventory.
"Environmental Laws" means the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability
Act, any so-called "Superfund" or "Superlien" law, the Toxic Substances
Control Act, and any other federal, state or local statute, law, ordinance,
code, rule, regulation, order or decree or other requirement regulating,
relating to, or imposing liability or standards of conduct (including but
not limited to permit requirements, and emission or effluent restrictions)
concerning any Hazardous Materials or any hazardous, toxic or dangerous
waste, substance or constituent, or any pollutant or contaminant or other
substance, whether solid, liquid or gas, as now or at any time hereafter in
effect.
"Environmental Lien" means a Lien in favor of any governmental
entity for (a) any liability under any Environmental Law or (b) damages
arising from or costs incurred by such governmental entity in response to a
Release of any Hazardous Material or the spillage, disposal or release into
the environment of any other hazardous, toxic or dangerous waste, substance
or constituent, or other substance.
"Equipment" means all equipment of Borrower or any Subsidiary of
every description, including without limitation fixtures, furniture,
vehicles and trade fixtures, together with any and all accessions, parts and
equipment attached thereto or used in connection therewith, and any
substitutions therefor and replacements thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" means any corporation, partnership, or other
trade or business (whether or not incorporated) that is, along with
Borrower, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in Sections 414(b) and 414(c),
respectively, of the Code or Section 4001 of ERISA, or a member of the same
affiliated service group within the meaning of Section 414(m) of the Code.
"Eurocurrency Reserve Requirement" means, with respect to any
LIBOR Rate Loan for any Interest Rate Period, a percentage equal to the
daily average during such Interest Rate Period of the percentages in effect
on each day of such Interest Rate Period, as prescribed by the Federal
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Reserve Board, for determining the aggregate maximum reserve requirements
(including all basic, supplemental, marginal and other reserves) applicable
to "Eurocurrency liabilities" pursuant to Regulation D or any other then
applicable regulation of the Federal Reserve Board which prescribes reserve
requirements applicable to "Eurocurrency liabilities," as presently defined
in Regulation D. Without limiting the effect of the foregoing, the
Eurocurrency Reserve Requirement shall reflect any other reserves required
to be maintained by Continental against (i) any category of liabilities that
includes deposits by reference to which the LIBOR Rate is to be determined,
or (ii) any category of extensions of credit or other assets that includes
LIBOR Rate Loans. For purposes of this Agreement, any LIBOR Rate Loan
hereunder shall be deemed to be "Eurocurrency liabilities," as defined in
Regulation D, and, as such, shall be deemed to be subject to such reserve
requirements without the benefit of, or credit for, proration, exceptions or
offsets which may be available to Continental from time to time under
Regulation D.
"Event of Default" has the meaning ascribed to such term in
Section 6.1.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Banking Day, for the next
preceding Banking Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Banking Day, the average of
the quotations for such day on such transactions received by Agent from
three federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fiscal Year" means any period of twelve (12) consecutive
calendar months ending on the thirtieth (30th) day of June. References to a
Fiscal Year with a number corresponding to any calendar year (e.g. "Fiscal
Year 1994") refer to the Fiscal Year ending on the thirtieth (30th) day of
June occurring during such calendar year.
"GAAP" means generally accepted accounting principles as in
effect from time to time (except as otherwise provided in Section 1.4), as
applied in the preparation of the audited financial statement of Borrower
referred to in Section 4.6.
"Hazardous Materials" means any toxic substance, hazardous
substance, hazardous material, hazardous chemical or hazardous waste defined
or qualifying as such in (or for the purposes of) any Environmental Law, or
any pollutant or contaminant, and shall include, but not be limited to,
petroleum, including crude oil, any radioactive material, including but not
limited to any source, special nuclear or by-product material as defined at
42 U.S.C. Section 2011 et seq., as amended or hereafter amended,
polychlorinated biphenyls and asbestos in any form or condition.
"Indebtedness" of any Person means, without duplication, (a) the
principal portion of any obligation of such Person for borrowed money,
including without limitation (i) any obligation of such Person evidenced by
bonds, debentures, notes or other similar debt instruments and (ii) any
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obligation for borrowed money which is non-recourse to the credit of such
Person but which is secured by a Lien on any asset of such Person, (b) any
obligation of such Person on account of deposits or advances, (c) any
obligation of such Person for the deferred purchase price of any property or
services, except Trade Accounts Payable, (d) any obligation of such Person
as lessee under a Capitalized Lease, (e) any obligation of such Person with
respect to interest rate swaps, interest rate caps, interest rate collars or
other interest hedging agreements, (f) any obligation of such Person in
respect of foreign exchange contracts, (g) any obligation of such Person
with respect to Letters of Credit, acceptances, guarantees or similar
obligations of another Person issued for the account of such Person and (h)
any Indebtedness of another Person secured by a Lien on any asset of such
first Person, whether or not such Indebtedness is assumed by such first
Person. For all purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which
such Person is a general partner or joint venturer.
"Intercompany Agreement" means that certain Intercompany
Agreement of even date herewith among Borrower and each of the Borrowing
Subsidiaries.
"Intercompany Loans" means revolving loans made by Borrower to
the Borrowing Subsidiaries with the proceeds of the Loans pursuant to the
terms of this Agreement and the Intercompany Agreement. All funds
downstreamed by Borrower to the Borrowing Subsidiaries with the proceeds of
the Loans will be deemed to be Intercompany Loans.
"Interest Rate Period" means with respect to any portion of the
Revolving Loans, the period commencing on the date on which the LIBOR Rate
is deemed applicable to such portion of the Revolving Loans, and ending on
the numerically corresponding day one (1), two (2) or three (3) months
thereafter, as selected by Borrower pursuant to Section 3.1.1(c) of
Supplement A; provided, however, that:
(a) any Interest Rate Period which would otherwise
end on a day which is not a Banking Day shall end on the next
succeeding Banking Day unless such next succeeding Banking Day
falls in another calendar month, in which case such Interest Rate
Period shall end on the next preceding Banking Day;
(b) any Interest Rate Period which begins on the
last Banking Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the
end of such Interest Rate Period) shall end on the last Banking
Day of the calendar month at the end of such Interest Rate
Period; and
(c) no Interest Rate Period shall extend beyond the
Termination Date.
"Inventory" means any and all of Borrower's and each Subsidiary's
goods (including without limitation goods in transit) which are held for
sale, furnished under any contract of service, or held as raw materials,
work in process, or supplies or materials used or consumed in Borrower's or
such Subsidiary's business, or which are held for use in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such
goods, and any and all goods the sale or other disposition of which has
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given rise to an Account Receivable, Contract Right or any other property
described in Section 3.1(a), which are returned to and/or repossessed and/or
stopped in transit by, or at any time hereafter are in the possession or
under the control of, Borrower, any Subsidiary, Agent or any Lender or any
agent or bailee of any of them, and all documents of title or other
documents representing the same; provided, that the foregoing does not
include tanks leased to, or held for lease to, customers, storage tanks and
other Equipment.
"Investment" of any Person means any investment, made in cash or
by delivery of any kind of property or asset, in any other Person, whether
by acquisition of shares of stock or similar interest, Indebtedness or other
obligation or security, or by loan, advance or capital contribution, or
otherwise.
"Issuing Bank" means Continental or any other Lender selected by
Agent with Borrower's consent (which will not be unreasonably withheld) to
issue Letters of Credit under this Agreement.
"L/C Draft" means a draft drawn on Issuing Bank pursuant to a
Letter of Credit.
"Lenders" means, collectively, Continental and any other Person
that becomes a Lender under this Agreement and each of their respective
successors and assigns as provided in this Agreement; and "Lender" means any
one of Lenders.
"Letter of Credit" means a standby or documentary letter of
credit issued by the Issuing Bank on the Application of Borrower.
"Letter of Credit Obligations" means at any time an amount equal
to the sum of (a) the aggregate outstanding face amount of all Letters of
Credit plus (b) the aggregate outstanding face amount of all accepted but
unpaid L/C Drafts.
"Liabilities" means all of the liabilities, obligations
(including obligations of performance) and indebtedness of Borrower to Agent
or any Lender of any kind or nature, however created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, and arising under, or in connection with,
this Agreement, any Note, any Related Agreement, any Letter of Credit or any
Application therefor, including without limitation all interest, charges,
expenses, Attorneys' Fees and other sums chargeable to Borrower by Agent or
any Lender hereunder or thereunder. "Liabilities" shall also include any
and all amendments, extensions, renewals, refundings or refinancings of any
of the foregoing.
"LIBOR Base Rate" means, with respect to each Interest Rate
Period for a LIBOR Rate Loan, the sum of two and one-half percent (2.50%)
plus the rate per annum at which U.S. Dollar deposits in immediately
available funds are offered to Continental two (2) Banking Days prior to the
beginning of such Interest Rate Period by major banks in the London inter-
bank eurodollar market at or about 11:00 a.m., London time, for delivery on
the first day of such Interest Rate Period, for the number of days comprised
therein and in an amount equal to the amount of the LIBOR Rate Loan to be
outstanding during such Interest Rate Period.
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"LIBOR Rate" means, with respect to each Interest Rate Period for
a LIBOR Rate Loan, a rate per annum (rounded upward, if necessary, to the
nearest one hundredth of one percent (1/100th of 1%)) determined pursuant to
the following formula:
LIBOR Rate = LIBOR Base Rate
__________________________________
1-Eurocurrency Reserve Requirement
"LIBOR Rate Loan" means any portion of the Revolving Loan which
bears interest at a rate determined with reference to the LIBOR Rate.
"Lien" means any security interest, mortgage, pledge,
hypothecation, judgment lien or similar legal process, title retention lien,
or other lien or encumbrance, including without limitation the interest of a
vendor under any conditional sale or other title retention agreement and the
interest of a lessor under any Capitalized Lease.
"Loan" means (a) any Revolving Loan made pursuant to Section
2.1.1 and (b) any other loan or advance made to Borrower by Agent or any
Lender under or pursuant to this Agreement.
"Loan Account" has the meaning ascribed to such term in Section
2.3.
"Margin Stock" has the meaning ascribed to such term in
Regulation U of the Federal Reserve Board or any regulation substituted
therefor, as in effect from time to time.
"Master Revolving Credit Note" means the Master Revolving Credit
Note dated on or about June 30, 1994 (as it may be amended from time to
time) executed by each Borrowing Subsidiary in favor of Borrower and
evidencing the Intercompany Loans made to each Borrowing Subsidiary under
the Intercompany Agreement.
"Material Adverse Change" means (a) a material adverse change in
the condition (financial or otherwise), operations, performance, prospects,
properties or affairs, taken as a whole, of Borrower or in the ability of
Borrower to perform its obligations under any material agreement to which
Borrower is a party, (b) a material adverse change in the condition
(financial or otherwise), operations, performance, prospects, properties or
affairs of Borrower and the Subsidiaries taken as a whole or in the ability
of Borrower and the Subsidiaries taken as a whole to perform their
obligations under any material agreements to which they are parties or (c)
an impairment of Agent's interest, for the benefit of itself and Lenders, in
any material portion of the Collateral or the material diminution in value
of the Collateral.
"Material Adverse Effect" means (a) a material adverse effect
upon the condition (financial or otherwise), operations, performance,
prospects, properties or affairs, taken as a whole, of Borrower or upon the
ability of Borrower to perform its obligations under any material agreement
to which Borrower is a party, (b) a material adverse effect upon the
condition (financial or otherwise), operations, performance, prospects,
properties or affairs of Borrower and the Subsidiaries taken as a whole or
upon the ability of Borrower and the Subsidiaries taken as a whole to
perform their obligations under any material agreements to which they are
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parties or (c) an impairment of Agent's interest, for the benefit of itself
and Lenders, in any material portion of the Collateral or the material
diminution in value of the Collateral.
"Maximum Facility" means $15,000,000.
"Maximum Loan Amount" means, with respect to any Lender, the
maximum amount of Loans which such Lender has agreed, pursuant to the terms
and conditions of this Agreement, to make available to Borrower, as set
forth on the signature page hereto or in an Assignment and Acceptance
Agreement executed by such Lender.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA that is maintained for employees of Borrower or
any ERISA Affiliate.
"Note" means any promissory note of Borrower evidencing any loan
or advance made by any Lender to Borrower pursuant to this Agreement, as the
same may be amended, modified or supplemented from time to time.
"Obligor" means Borrower and each other Person who is or shall
become primarily or secondarily liable on any of the Liabilities, or who
grants to Agent, for the benefit of itself and Lenders, a Lien on any
property of such Person as security for any of the Liabilities.
"Obligor Collateral" means any real or personal property of any
Obligor on which a Lien has been granted to Agent, for the benefit of itself
and Lenders, in order to secure the Liabilities and/or such Obligor's
guaranty of the Liabilities.
"Occupational Safety and Health Law" means the Occupational
Safety and Health Act of 1970 and any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating
to or imposing liability or standards of conduct concerning employee health
and/or safety.
"Over Advance" has the meaning ascribed to such term in Section
2.8.
"Overdraft Loan" has the meaning ascribed to such term in Section
2.7.
"Participant" means any Person, now or at any time or times
hereafter, participating with any Lender, pursuant to the provisions of
Section 12.9, in the Loans made or Letters of Credit issued, pursuant to
this Agreement or any Related Agreement.
"Payment Liabilities" means all Liabilities other than contingent
obligations of Borrower with respect to which neither Agent nor any Lender
has asserted a claim against Borrower or against which Borrower has provided
reserves or Collateral satisfactory to Agent or such Lender; provided, that
Payment Liabilities shall include the Letter of Credit Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
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"Pension Plan" means a "pension plan," as such term is defined in
Section 3(2) of ERISA, that is subject to the provisions of Title IV of
ERISA (other than a Multiemployer Plan) and to which Borrower or any ERISA
Affiliate may have any liability, including any liability by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, entity, or government (whether national, federal, state,
county, city, municipal or otherwise, including without limitation any
instrumentality, division, agency, body or department thereof).
"Pre-Settlement Determination Date" has the meaning ascribed to
such term in Section 2.15.
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage in nine (9) decimal places), the numerator of
which shall be the Maximum Loan Amount of such Lender and the denominator of
which shall be the aggregate amount of the Maximum Loan Amounts of all
Lenders.
"Real Property" means, collectively, all real property presently
owned or hereafter acquired, or presently or hereafter leased, by Borrower
or any Subsidiary.
"Reference Rate" means, at any time, the rate of interest then
most recently announced by Continental at Chicago, Illinois as its reference
rate. Each change in the interest rate on any Loan shall take effect on the
effective date of the change in the Reference Rate.
"Register" has the meaning ascribed to such term in Section
12.9(d).
"Related Agreement" means any agreement, instrument or document
(including without limitation notes, guarantees, chattel mortgages, pledges,
powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements, subordination agreements,
intercreditor agreements, trust account agreements and all other written
matter) heretofore, now, or hereafter delivered to Agent or any Lender with
respect to or in connection with or pursuant to this Agreement or any of the
Liabilities, and executed by or on behalf of Borrower, any Subsidiary or
any other Obligor, as each of the same may be amended, modified or
supplemented from time to time and shall specifically include any Notes.
"Related Party" means, with respect to any Person, any other
Person (a) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such first
Person or a subsidiary of such first Person, (b) that beneficially owns or
holds ten percent (10%) or more of the equity interest of such first Person
or a subsidiary of such first Person or (c) ten percent (10%) or more of the
equity interest of which is beneficially owned or held by such first Person
or a subsidiary of such first Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"Release" means any actual or threatened spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing of Hazardous Materials into the environment.
"Reportable Event" has the meaning given to such term in ERISA.
"Requisite Lenders" means Lenders having, in the aggregate, Pro
Rata Shares of (a) one hundred percent (100%) at such times as there are one
or two Lenders, or (b) at least fifty-one percent (51%) at such times as
there are three or more Lenders.
"Restricted Subsidiaries" has the meaning given to such term in
the Senior Loan Documents.
"Revolving Credit" has the meaning ascribed to such term in the
definition of "Credit."
"Revolving Credit Amount" has the meaning ascribed to such term
in Supplement A.
"Revolving Loan" has the meaning ascribed to such term in Section
2.1.1.
"Revolving Loan Availability" means the lesser of (a) the
Revolving Credit Amount minus the Letter of Credit Obligations and (b) the
Borrowing Base minus the Letter of Credit Obligations.
"Seasonal Overadvance" means the advances to Borrower under
Sections 2.2(iii) and (iv) of Supplement A.
"Senior Loan Documents" means, collectively, the agreements,
instruments and documents evidencing, governing and securing the Senior
Notes, including the Senior Note Indenture as each of the same may be
amended, modified or supplemented from time to time pursuant to Section 5.27
hereof.
"Senior Loans" means, collectively, all indebtedness of Borrower
represented by the Senior Notes.
"Senior Note Indenture" means the Indenture dated June 29, 1994
between Borrower, certain Subsidiaries and Shawmut Bank Connecticut,
National Association, Trustee.
"Senior Notes" means, collectively, Borrower's 12 7/8% Senior
Secured Notes due 2004 in the aggregate principal amount due upon maturity
of not more than $127,200,000, issued pursuant to the Senior Loan Documents.
"Settlement Date" has the meaning ascribed to such term in
Section 2.15.
"Stock Repurchase" means the repurchase by Borrower of all shares
of its common stock held by Mr. Robert W. Plaster and certain other
departing officers of Borrower, which is being consummated on the date
hereof.
"Subordinated Debt" means, collectively, (a) Indebtedness of
Borrower under the certain Indenture dated June 7, 1983 relating to
Borrower's 9% Subordinated Debentures due December 31, 2007, as supplemented
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by a certain First Supplemental Indenture dated December 13, 1989
(collectively, the "2007 Indenture"), in the current aggregate approximate
principal amount of $9,500,000, and (b) that portion of any other
liabilities, obligations or Indebtedness of Borrower which contains terms
satisfactory to Agent and is subordinated, in a manner satisfactory to Agent
(as evidenced by Agent's written agreement of satisfaction), as to right and
time of payment of principal and interest thereon, to all of the
Liabilities.
"Subordinated Debt Documents" means, collectively, the
agreements, instruments and documents evidencing or otherwise pertaining to
any Subordinated Debt, including without limitation the 2007 Indenture, as
each of the same may be amended, modified or supplemented from time to time
pursuant to Section 5.27.
"Subsidiary" means any Person of which or in which Borrower and
its other Subsidiaries own directly or indirectly more than fifty percent
(50%) of (a) the combined voting power of all classes of stock having
general voting power under ordinary circumstances to elect a majority of the
board of directors of such Person, if it is a corporation, (b) the capital
interest or profits interest of such Person, if it is a partnership, joint
venture or similar entity or (c) the beneficial interest of such Person, if
it is a trust, association or other unincorporated organization.
"Supplemental Documentation" has the meaning ascribed to such
term in Section 3.4.
"Tangible Net Worth" means at any time, the total of
shareholders' equity (including capital stock, additional paid-in capital
and retained earnings and after deducting treasury stock), less the sum of
the total amount of all intangible assets, in each case determined on a
consolidated basis for Borrower and the Subsidiaries and in accordance with
GAAP. Intangible assets shall include, without limitation, unamortized debt
discount and expense, unamortized deferred charges and goodwill.
"Taxes" with respect to any Person means taxes, assessments or
other governmental charges or levies imposed upon such Person, its income or
any of its properties, franchises or assets.
"Termination Date" means June 29, 1997 or such later date to
which it may be extended pursuant to Section 12.7.
"Trade Accounts Payable" of any Person means trade accounts
payable of such Person with a maturity of not greater than ninety (90) days
incurred in the ordinary course of such Person's business.
"Transactions" has the meaning ascribed to such term in Section
8.1.3.
"UCC" means the Uniform Commercial Code as in effect in the State
of Illinois, and any successor statute, together with any regulations
thereunder, in each case as in effect from time to time. References to
sections of the UCC shall be construed to also refer to any successor
sections.
"Units" means the investment unit consisting of ten Senior Notes
and 13.8 Warrants.
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"Unmatured Event of Default" means any event or condition which,
with the lapse of time or giving of notice to Borrower or both, would
constitute an Event of Default.
"Warrant Agreement" means the Warrant Agreement dated on or about
June 29, 1994 executed by Empire and Shawmut Bank Connecticut, National
Association, as Warrant Agent.
"Warrants" means warrants issued to holders of the Senior Notes
entitling such holders to purchase up to 175,536 shares of the common stock,
$.001 par value per share, of Borrower, in accordance with the Warrant
Agreement.
1.2 Other Definitional Provisions. Unless otherwise defined
or the context otherwise requires, all financial and accounting terms used
herein or in any certificate or other document made or delivered pursuant
hereto shall be defined in accordance with GAAP. Unless otherwise defined
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Related Agreement or Supplemental Documentation. Terms
used in this Agreement which are defined in any Supplement or Exhibit hereto
shall, unless the context otherwise indicates, have the meanings given them
in such Supplement or Exhibit. Other terms used in this Agreement shall,
unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein.
1.3 Interpretation of Agreement. A Section, an Exhibit or a
Schedule is, unless otherwise stated, a reference to a section hereof, an
exhibit hereto or a schedule hereto, as the case may be. Section captions
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement. The words "hereof," "herein," "hereto" and
"hereunder" and words of similar import when used in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement. Reference to "this Agreement" shall include the provisions of
Supplement A.
1.4 Compliance with Financial Restrictions. Compliance with
each of the financial ratios and restrictions contained in Section 5 or
Supplement A shall, except as otherwise provided herein, be determined in
accordance with GAAP consistently followed.
2. LOANS; LETTERS OF CREDIT; OTHER MATTERS.
2.1 Loans.
2.1.1 Revolving Loans.
(a) Subject to the terms and conditions of this Agreement
and the Related Agreements, and in reliance upon the warranties and
representations of Borrower set forth herein and the warranties and
representations of Borrower and each other Obligor set forth in the Related
Agreements, each Lender, severally and not jointly, agrees to make its Pro
Rata Share of such loans or advances (individually each a "Revolving Loan"
and collectively the "Revolving Loans") from time to time before the
Termination Date to Borrower as Borrower may from time to time request;
provided, that Agent may, but shall not be obligated to, make such Revolving
Loans to Borrower on behalf of Lenders as a "Disproportionate Advance" (as
defined below); provided further, that, except as provided in Section 2.8,
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the aggregate outstanding principal amount of the Revolving Loans made by or
on behalf of Lenders shall not at any time exceed the Revolving Loan
Availability. Revolving Loans made by or on behalf of Lenders may be repaid
and, subject to the terms and conditions hereof, reborrowed to but not
including the Termination Date unless the Credit extended under this
Agreement is otherwise terminated as provided in this Agreement. No Lender
shall be obligated at any time to make available to Borrower its Pro Rata
Share of any requested Revolving Loan if such amount, plus its Pro Rata
Share of all Revolving Loans then outstanding, would exceed such Lender's
Maximum Loan Amount at such time. No Lender shall be obligated to make
available its Pro Rata Share of any Revolving Loans during the occurrence of
any Event of Default or Unmatured Event of Default; provided that
notwithstanding the foregoing or anything contained herein to the contrary,
regardless of whether an Event of Default or an Unmatured Event of Default
exists, each Lender shall, at the request of Agent, continue to be obligated
to make its Pro Rata Share of the Revolving Loans available to Borrower for
a period of up to five (5) Banking Days, but in any event, no Lender shall
be obligated at any time to make available to Borrower its Pro Rata Share of
any such requested Revolving Loan if such amount, plus its Pro Rata Share of
all Revolving Loans then outstanding, would exceed such Lender's Maximum
Loan Amount at such time. Neither Agent nor any Lender shall be responsible
for any failure by any other Lender to perform its obligations to make
advances hereunder, and the failure of any Lender to make its Pro Rata Share
of any advance hereunder shall not relieve any other Lender of its
obligation, if any, to make its Pro Rata Share of Loans hereunder, nor
require such other Lender to make more than its Pro Rata Share of any Loans
hereunder. If Borrower makes a request for a Revolving Loan as provided
herein, or if Agent desires to make a Revolving Loan pursuant to Sections
2.2(b), 2.2(c), 2.2(d), 2.4.4, 2.10(c), 3.2(c), 5.5, 5.6, 5.22, 7.4, 12.3,
12.4 or any other provision of this Agreement or any Related Agreement that
permits Agent to advance Revolving Loans to Borrower, Agent, at its option
and in its sole and absolute discretion, shall do either of the following:
(i) Advance the amount of the proposed Revolving
Loan to Borrower disproportionately (a "Disproportionate
Advance") out of Agent's own funds on behalf of Lenders, and
request settlement in accordance with Section 2.15, such that
upon such settlement, each Lender's share of the outstanding
Revolving Loans (including, without limitation, the amount of any
Disproportionate Advance) equals its Pro Rata Share and such
Disproportionate Advance shall be deemed to be repaid; or
(ii) Notify each Lender and Borrower by telecopy or
other similar form of teletransmission of the proposed advance on
the same day Agent is notified by Borrower of Borrower's request
for an advance hereunder or the same day Agent desires to make a
Revolving Loan for the benefit of Borrower (to the extent
permitted hereunder or under any Related Agreement). Each Lender
shall remit, to the Demand Deposit Account, on or prior to twelve
o'clock noon, Chicago time, on the business day immediately
succeeding the date of such notification, immediately available
funds in an amount equal to such Lender's Pro Rata Share of such
proposed advance.
If and to the extent that a Lender does not settle with Agent as required
under clause (i), Borrower agrees to repay to Agent forthwith on demand such
amount required to be paid by such Lender to Agent, together with interest
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thereon, for each day from the date such amount is made available to
Borrower until the date such amount is repaid to Agent, at the interest rate
applicable at such time for such Revolving Loans; provided, that Borrower's
obligation to repay such advance to Agent shall not relieve each Lender of
its liability to Agent or Borrower for failure to settle as provided in
clause (i).
(b) In the event the aggregate outstanding principal balance
of the Revolving Loans exceeds the Revolving Loan Availability, Borrower
shall, unless Agent permits such Over Advance as provided in Section 2.8 or
Requisite Lenders shall otherwise consent, without notice or demand of any
kind, immediately make such repayments of the Revolving Loans or take such
other actions as shall be necessary to eliminate such excess.
(c) All Revolving Loans hereunder shall be paid by Borrower
on the Termination Date, unless payable sooner pursuant to the provisions of
this Agreement, but may, at Borrower's election, be repaid in whole or in
part at any time prior to such date without premium or penalty (other than
as expressly provided in Section 3.4 of Supplement A with respect to LIBOR
Rate Loans repaid prior to the end of the applicable Interest Rate Period).
2.1.2 Prepayment of all Liabilities; Reduction of Revolving
Credit Amount. Borrower may prepay all of the Liabilities in full at any
time, without premium or penalty (other than as expressly provided in
Section 3.4 of Supplement A with respect to LIBOR Rate Loans repaid prior to
the end of the applicable Interest Rate Period), by prepaying the
outstanding principal balance of the Revolving Loans, together with (a) all
accrued and unpaid interest on the Liabilities, (b) all other outstanding
Liabilities and (c) cash in the amount of, or adequate (in Agent's
determination) cash collateral for, the Letter of Credit Obligations.
Borrower may not permanently reduce the Revolving Credit Amount except in
connection with the prepayment in full of all of the Liabilities.
2.1.3 Maximum Outstanding Liabilities. Notwithstanding any
other provision of this Agreement, the aggregate outstanding principal
balance of the Loans plus Letter of Credit Obligations shall not exceed the
Maximum Facility; provided, however, that the foregoing shall not limit the
right of Agent to advance Revolving Loans to Borrower pursuant to the
provisions of Section 2.2(b), 2.2(c), 2.2(d), 2.4.4, 2.10(c), 3.2(c), 5.5,
5.6, 5.22, 7.4, 12.3 or 12.4 or any other provision of this Agreement or any
Related Agreement that permits Agent to advance Revolving Loans to Borrower.
Any Revolving Loan advanced by Agent to Borrower under any of the foregoing
provisions shall be deemed to be a Revolving Loan made by Agent on behalf of
Lenders.
2.2 Letters of Credit.
(a) In addition to Loans made pursuant to Section 2.1, Agent
will, upon receipt of duly executed Applications and such other documents,
instruments and/or agreements as Agent may require, request, on Borrower's
behalf, that Issuing Bank issue Letters of Credit on such terms as are
satisfactory to Agent and Issuing Bank, provided, however that no Letter of
Credit will be issued if, before or after taking such Letter of Credit into
account, (i) the Letter of Credit Obligations exceed $4,000,000 or (ii) the
Letter of Credit Obligations exceeds the lesser of (A) the Revolving Credit
Amount minus the outstanding principal balance of the Revolving Loans and
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(B) the Borrowing Base minus the outstanding principal balance of the
Revolving Loans. If such excess shall at any time exist, Borrower shall,
unless Requisite Lenders shall otherwise consent, promptly make such
payments as are necessary to eliminate such excess or shall promptly post
cash collateral in the amount of such excess. No Letter of Credit shall
have an expiry date after the date that is thirty (30) days prior to the
initial Termination Date or, if the Termination Date is extended pursuant to
Section 12.7, the applicable extended Termination Date.
(b) Borrower agrees to pay to Issuing Bank, on demand,
Issuing Bank's standard issuance, negotiation and administrative operating
fees and charges in effect from time to time for issuing and administering
any Letters of Credit and if not so paid, each Lender shall, without regard
to any other provision of this Agreement or any other Related Agreement, any
defense that Borrower may have to its obligation to pay Issuing Bank in
connection with such fees and charges or any defense that any Lender may
have in connection with the participation described in Section 2.2(e) in
connection with any Letter of Credit or L/C Draft, pay Issuing Bank for such
Lender's Pro Rata Share of such fees and charges, and any payments so made
by Lenders to Issuing Bank shall be deemed to be Revolving Loans. Each
Lender (other than a Lender that is Issuing Bank) acknowledges and agrees
that it shall not be entitled to any of the fees and charges of Issuing
Bank. Borrower further agrees to pay Agent, for the benefit of itself and
Lenders, a commission equal to one percent (1%) per annum (calculated on the
basis of a year consisting of three hundred sixty (360) days and paid for
actual days elapsed) of the daily average of the undrawn amount of each
Letter of Credit and on each L/C Draft accepted in connection therewith.
Such Letter of Credit commissions shall be paid in arrears on the last day
of each month thereafter. Agent may provide for the payment of any fees,
charges or commissions due hereunder by advancing the amount thereof to
Borrower as a Revolving Loan. At all times that any
Default Rate is being charged under this Agreement, the Letter of Credit
commission shall be equal to the otherwise applicable commission plus two
percent (2%) per annum.
(c) Subject to the remaining sentences of this clause (c),
Borrower agrees to reimburse Issuing Bank, on demand, for each payment made
by Issuing Bank under or pursuant to any Letter of Credit or L/C Draft and
if not so reimbursed, each Lender shall, without regard to any other
provision of this Agreement or any other Related Agreement, any defense that
Borrower may have to its obligation to reimburse Issuing Bank in connection
with such payment or any defense that any Lender may have in connection with
the participation described in Section 2.2(e) in connection with any Letter
of Credit or L/C Draft, reimburse Issuing Bank for such Lender's Pro Rata
Share of such payment, and any payments so made by Lenders to Issuing Bank
shall be deemed to be Revolving Loans. Agent and Lenders agree that so long
as there is sufficient Revolving Loan Availability and provided that no
Event of Default is then in existence or would be caused thereby, Agent will
provide for the payment of any reimbursement obligations and any interest
accrued thereon by advancing the amount thereof to Borrower as a Revolving
Loan as soon as reasonably practicable. Prior to such advance, the amount
of such reimbursement obligations shall bear interest at the then applicable
Adjusted Reference Rate. Agent shall have the option, pursuant to Section
2.8, to so provide for such payments even if there is not sufficient
Revolving Loan Availability or if an Event of Default is then in existence
or would be caused thereby and such amounts will bear interest at the rate
set forth in Section 2.8. In the event a Letter of Credit or
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L/C Draft is not reimbursed from a Revolving Loan as provided herein,
Borrower agrees to pay Agent, for the benefit of itself and Lenders, on
demand, interest at the Default Rate on any amounts paid by Issuing Bank in
respect of a Letter of Credit or an L/C Draft until the reimbursement of
Issuing Bank by Borrower of such payment.
(d) Notwithstanding anything to the contrary herein or in
any Application, upon the occurrence of an Event of Default, an amount equal
to the aggregate amount of the outstanding Letter of Credit Obligations
shall, at Agent's option and without demand upon or further notice to
Borrower, be deemed (as between Lenders and Borrower) to have been paid or
disbursed by Agent under the Letters of Credit and accepted L/C Drafts
(notwithstanding that such amounts may not in fact have been so paid or
disbursed), and a Revolving Loan to Borrower in the amount of such Letter of
Credit Obligations to have been made and accepted, which Loan shall be
immediately due and payable. In lieu of the foregoing, at the election of
Agent at any time after an Event of Default, Borrower shall, upon Agent's
demand, deliver to Agent cash collateral equal to the aggregate Letter of
Credit Obligations. Any such cash collateral and/or any amounts received by
Agent in payment of the Loan made pursuant to this paragraph (d) shall be
held by Agent, for the benefit of itself and Lenders, in the Assignee
Deposit Account or a separate account appropriately designated as a cash
collateral account in relation to this Agreement and the Letters of Credit
and shall be retained by Agent, for the benefit of itself and Lenders, as
collateral security in respect of, first, the Liabilities under or in
connection with the Letters of Credit and L/C Drafts and then, all other
Liabilities. Such amounts shall not be used by Agent to pay any amounts
drawn or paid under or pursuant to any Letter of Credit or L/C Draft, but
may be applied to reimburse Issuing Bank for drawings or payments under or
pursuant to Letters of Credit or L/C Drafts which Issuing Bank has paid, or
if no such reimbursement is required, to payment of such other Liabilities
as Agent shall determine. Any amounts remaining in any cash collateral
account established pursuant to this paragraph (d) following payment in full
of all Liabilities shall be returned to Borrower.
(e) Immediately upon the issuance of a Letter of Credit in
accordance with this Agreement, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from Issuing Bank,
without recourse or warranty, an undivided interest and participation
therein to the extent of such Lender's Pro Rata Share (including without
limitation, all obligations of Borrower with respect thereto). Borrower
hereby indemnifies each of Agent and each Lender against any and all
liability and expense it may incur in connection with any Letter of Credit
or L/C Draft and agrees to reimburse each of Agent and each Lender for any
payment made by Agent or any Lender to Issuing Bank, except for any
liability incurred or payment made as a result of Agent's or such Lender's
gross negligence or willful misconduct.
2.3 Loan Account; Demand Deposit Account. Agent shall
establish or cause to be established on its books in Borrower's name one or
more accounts (each a "Loan Account") to evidence Loans made to Borrower.
Agent or Lenders, as appropriate, will credit or cause to be credited to a
commercial account ("Demand Deposit Account") maintained by Borrower at
Continental's 231 South LaSalle Street, Chicago, Illinois office the amount
of any sums advanced as Loans hereunder, which shall be disbursed at
Borrower's direction. Any amounts advanced as Loans hereunder which are
credited to Borrower's Demand Deposit Account, together with any other
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amounts advanced to Borrower as a Loan pursuant to this Agreement, will be
debited to the applicable Loan Account and result in an increase in the
principal balance outstanding in such Loan Account in the amount thereof.
2.4 Interest and Fees.
2.4.1 Interest. The unpaid principal amount of each Revolving
Loan hereunder shall bear interest until maturity at the rate or rates
applicable to Revolving Loans indicated in Supplement A hereto. If any
Revolving Loan or portion thereof is not paid when due, whether by
acceleration or otherwise, the entire unpaid principal amount of the
Revolving Loans shall bear interest thereafter until such amount is paid in
full at the Default Rate applicable to Revolving Loans indicated in
Supplement A hereto. Until maturity, interest on the Revolving Loans shall
be paid by Borrower on the date(s) indicated in Supplement A, and at such
maturity. After maturity, whether by acceleration or otherwise, accrued
interest shall be payable on demand.
2.4.2 Nonuse Fee. Borrower agrees to pay to Agent, for the
benefit of itself and Lenders, a fee equal to three-eighths of one percent
(0.375%) per annum on the daily average amount by which the Revolving Credit
Amount exceeds the outstanding principal balance of the Revolving Loans plus
the Letter of Credit Obligations. The fee provided for in this Section
2.4.2 shall be payable monthly in arrears on the twenty-eighth day of each
month commencing July 28, 1994, and on the date the Revolving Credit
terminates for the period then ended.
2.4.3 Method of Calculating Interest and Fees. Interest on
the unpaid principal amount of each Loan shall accrue from and including the
date such Loan is made to, but not including, the date such Loan is paid.
Interest and any fees shall be calculated on the basis of a year consisting
of three hundred sixty (360) days and paid for actual days elapsed.
2.4.4 Payment of Interest and Fees. Agent may provide for the
payment of any unpaid accrued interest and any fees by charging the Demand
Deposit Account or any bank account maintained by Borrower with Agent or by
advancing the amount thereof to Borrower as a Revolving Loan.
2.5 Requests for Loans; Borrowing Base Certificates; Other
Information.
(a) Loans shall be requested in writing or by telephone,
except for Overdraft Loans and Revolving Loans made pursuant to the
provisions of Section 2.2(b), 2.2(c), 2.2(d), 2.4.4, 2.10(c), 3.2(c), 5.5,
5.6, 5.22, 7.4, 12.3, or 12.4 or any other provision of this Agreement or
any Related Agreement that permits Agent to advance Revolving Loans to
Borrower.
(b) In the event that Borrower shall at any time, or from
time to time, (i) make a request for a Loan hereunder or (ii) be deemed to
have requested an Overdraft Loan, Borrower agrees to forthwith provide Agent
and Lenders with such information, at such frequency and in such format, as
is reasonably required by Agent, such information to be current as of the
time of such request. As of the date hereof, it is not Agent's intent to
require that Borrower provide information to Agent and Lenders in excess of,
or at times other than, that specifically required to be provided by the
terms of this Agreement or the Related Agreements; however, Agent reserves
the right, from time to time, in its reasonable judgment, to require
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Borrower to provide information at different times than currently required
and/or to provide additional types of information.
(c) Borrower further agrees to provide to Agent and Lenders
a current Borrowing Base Certificate on the first Banking Day of each month
for the preceding month and, after the occurrence of an Event of Default or
an Unmatured Event of Default, at such other times as Agent may request.
Such Borrowing Base Certificate shall be in substantially the same form as
that attached hereto as Exhibit A, executed and certified as accurate by
such officers or employees of Borrower as Borrower designates in writing to
Agent pursuant to duly adopted resolutions of Borrower's Board of Directors
authorizing such action.
(d) Borrower may request, telephonically or by written
authorization, the disbursement of Revolving Loans by Agent or Lenders, as
appropriate. Borrower shall provide Agent with documentation satisfactory
to Agent indicating the names of those employees of Borrower authorized by
Borrower to sign Borrowing Base Certificates and/or to make telephonic
requests for Loans and Letters of Credit, and/or to authorize disbursement
of the proceeds of Loans by wire transfer or otherwise, and Agent and
Lenders shall be entitled to rely upon such documentation until notified in
writing by Borrower of any change(s) in the names of the employees so
authorized. Agent and Lenders shall be entitled to act on the instructions
of anyone identifying himself as one of the persons authorized to request
Loans and Letters of Credit, or disbursements of Loan proceeds by telephone
and Borrower shall be bound thereby in the same manner as if the person were
actually so authorized. Borrower agrees to indemnify and hold each of Agent
and each Lender harmless from any and all claims, damages, liabilities,
losses, costs and expenses (including Attorneys' Fees) which may arise or be
created by the acceptance of instructions for making or paying Loans in
writing or by telephone. Each such request must be received by Agent no
later than 11:00 a.m. (Chicago time) on the date on which such Revolving
Loan is requested to be made.
2.6 Statements. All Loans and payments hereunder shall be
recorded on Agent's books, which shall be rebuttably presumptive evidence of
the amount of such Loans outstanding at any time hereunder. Agent will
account monthly as to all Loans and payments hereunder and, absent
demonstrable error, each monthly accounting will be fully binding on
Borrower unless, within fifteen (15) days of Borrower's receipt thereof,
Borrower shall provide Agent with a specific listing of exceptions.
Notwithstanding any term or condition of this Agreement to the contrary,
however, the failure of Agent to record the date and amount of any Loan
hereunder shall not limit or otherwise affect the obligation of Borrower to
repay any such Loan.
2.7 Overdraft Loans. Agent, in its sole and absolute
discretion, and subject to the terms hereof, may make a Revolving Loan to
Borrower in an amount equal to the amount of any overdraft which may from
time to time exist with respect to the Demand Deposit Account or any bank
account which Borrower may now or hereafter have with Agent. The existence
of any such overdraft shall be deemed to be a request by Borrower for such
Loan. Borrower acknowledges that Agent is under no duty or obligation to
make any Loan to Borrower to cover any overdraft. Borrower further agrees
that if the making of a Loan to cover any Overdraft would result in an Over
Advance, such overdraft shall constitute a separate Loan under this
Agreement (an "Overdraft Loan"), which shall bear, from the date on which
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the overdraft occurred until paid, interest in an amount equal to the
greater of one hundred thirty percent (130%) of the highest rate of interest
then actually being charged for Revolving Loans (other than Overdraft Loans)
made hereunder, and $50 per day. If Agent, in its sole and absolute
discretion, decides not to make a Loan to cover part or all of any
overdraft, Agent may return any check(s) which created such overdraft.
2.8 Over Advances. If the aggregate outstanding Revolving
Loans and Letter of Credit Obligations exceed the lesser of (i) the
Borrowing Base and (ii) the Revolving Credit Amount (such excess Liabilities
are herein referred to as "Over Advances"), Agent, in its sole and absolute
discretion, may, for a period of five (5) Banking Days, to the extent such
Over Advance arises as a result of a reduction in the Borrowing Base, permit
such Over Advance to exist without the consent of any Lender (but subject to
Section 2.1.1(a)) and continue to make Revolving Loans on behalf of Lenders,
and after the expiration of such five (5) Banking Day period, no such event
or occurrence shall cause or constitute a waiver by any Lender of its right
to refuse to make any further Revolving Loans at any time that an Over
Advance exists or would result therefrom; provided, that Agent may not (i)
make Revolving Loans on behalf of Lenders under this Section 2.8 to the
extent such Revolving Loans would cause a Lender's Pro Rata Share of the
Revolving Loans to exceed such Lender's Maximum Loan Amount or (ii) make
Revolving Loans on behalf of Lenders under this Section 2.8 to the extent
such Revolving Loans would cause the then outstanding Revolving Loans and
Letter of Credit Obligations to exceed the sum of $1,000,000 and the amount
of the outstanding Revolving Loans and Letter of Credit Obligations as of
the date Agent became aware of the Over Advance. During any period in which
an Over Advance exists, the amount of Over Advances shall bear interest at a
rate equal to one hundred thirty percent (130%) of the highest rate of
interest then actually being charged for Revolving Loans made hereunder.
2.9 All Loans One Obligation. The Revolving Loans and all
other Loans under this Agreement shall constitute one Loan, and all
Indebtedness and other Liabilities of Borrower under this Agreement and any
of the Related Agreements shall constitute one general obligation secured by
Agent's Lien, for the benefit of itself and Lenders, on all of the
Collateral and by all other Liens heretofore, now, or at any time or times
hereafter granted by Borrower or any other Obligor to Agent, for the benefit
of itself and Lenders. Borrower agrees that all of the rights of Agent and
Lenders set forth in this Agreement shall apply to any modification of or
supplement to this Agreement, any Supplements or Exhibits hereto, and the
Related Agreements, unless otherwise agreed in writing.
2.10 Making of Payments; Application of Collections; Charging
of Accounts.
(a) All payments hereunder (including payment of Letter of
Credit Obligations and payments with respect to any Notes) shall be made
without set-off or counterclaim and shall be made to Agent in immediately
available funds (except for payments to be made to Issuing Bank as provided
in Section 2.2 and except as Agent may otherwise consent) prior to 12:30
p.m., Chicago time, on the date due at Continental's office at 231 South
LaSalle Street, Chicago, Illinois 60697, or at such other place as may be
designated by Agent to Borrower in writing. Any payments received after
such time shall be deemed received on the next Banking Day. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on
a date other than a Banking Day, such payment may be made on the next
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succeeding Banking Day, and such extension of time shall be included in the
calculation of interest and any fees.
(b) (i) Borrower authorizes Agent, and Agent will, subject
to the provisions of this paragraph (b), apply the whole or any part of any
amounts received by Agent (whether deposited in the Assignee Deposit Account
or otherwise received by Agent) from the collection of items of payment and
proceeds of any Collateral (including without limitation proceeds of
insurance), against the principal and/or interest of any Loans made
hereunder and/or any other Liabilities, whether or not then due, in such
order of application as Agent may determine; provided, however, that prior
to the occurrence of an Event of Default, any such amounts received by Agent
shall be applied in the manner, if any, specifically set forth in this
Agreement with respect to such payment and if no such manner is specifically
set out, then as follows: first, to payment of amounts then due with respect
to fees (including Attorneys' Fees), charges and expenses for which
Borrower is liable pursuant to this Agreement and the Related Agreements;
second, to payment of amounts then due with respect to interest on the
Loans; third, to payment of the principal of the Loans.
(ii) Notwithstanding subparagraph (i) above, if prior to an
Event of Default, at any time (x) the funds received by Agent in the
Assignee Deposit Account, or otherwise, exceed (A) the sum of the
outstanding principal balance of the Loans bearing interest at the Adjusted
Reference Rate, and the amounts described in clauses first and second of the
proviso set forth above in subparagraph (i) or (B) the sum of the amounts
described in clauses first, second and third of the proviso set forth above
in subparagraph (i), or (y) there are no Payment Liabilities, then in any
such case, Borrower may direct that such excess proceeds be held in a cash
collateral account maintained by Agent. The funds held in any cash
collateral account referred to in the preceding sentence may be disbursed,
at Borrower's direction, so long as after giving effect to such
disbursements, the Payment Liabilities do not exceed Revolving Loan
Availability.
(iii) Notwithstanding anything to the contrary herein, (i) all
cash, checks, instruments and other items of payment, solely for purposes of
determining the occurrence of an Event of Default, shall be deemed received
upon actual receipt by Agent, unless the same is subsequently dishonored for
any reason whatsoever, (ii) for purposes of determining whether, under
Sections 2.1 and 2.2, there is availability for Loans or Letters of Credit,
all cash, checks, instruments and other items of payment shall be applied
against the Liabilities on the first Banking Day after receipt thereof by
Agent and (iii) solely for purposes of interest calculation hereunder, all
cash, checks, instruments and other items of payment shall be deemed to have
been applied against the Liabilities on the first Banking Day after receipt
by Agent of collected funds with respect thereto; further provided, that any
amounts earned on such funds during the period after receipt thereof by
Agent and prior to application thereof against the Liabilities as provided
herein, shall be retained by Agent for Agent's own account. Notwithstanding
the foregoing, no checks, drafts or other instruments received by Agent
shall constitute final payment with respect to any Liabilities unless and
until such item of payment has actually been collected.
(c) Borrower hereby authorizes Agent, and Agent may, in its
sole and absolute discretion, charge to Borrower at any time when due all or
any portion of any of the Liabilities including but not limited to any
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Attorneys' Fees and other costs and expenses of Agent and Lenders for which
Borrower is liable pursuant to the terms of this Agreement or any Related
Agreement, or for which any other Obligor is liable pursuant to the terms of
any Related Agreement, by charging Borrower's Demand Deposit Account or any
bank account of Borrower with Agent or by advancing the amount thereof to
Borrower as a Revolving Loan; provided, however that the provisions of this
Section 2.10(c) shall not affect Borrower's obligation to pay when due all
amounts payable by Borrower under this Agreement, any Note or any Related
Agreement, whether or not there are sufficient funds therefor in the Demand
Deposit Account or any such other bank account of Borrower.
2.11 Agent's Election Not to Enforce. Notwithstanding any
term or condition of this Agreement to the contrary, Agent, in the sole and
absolute discretion of Requisite Lenders, at any time and from time to time,
may suspend or refrain from enforcing any or all of the restrictions imposed
in this Section 2, but no such suspension or failure to enforce shall impair
any right or power of Agent or any Lender under this Agreement, including
without limitation any right of each Lender to refrain from making a Loan or
Issuing Bank to refrain from issuing a Letter of Credit if all conditions
precedent to such Lender's obligation to make such Loan or Issuing Bank's
obligation to issue such Letter of Credit have not been satisfied.
2.12 Reaffirmation. Each Loan or Letter of Credit, or
designation or continuation of a LIBOR Rate Loan, in each case requested by
Borrower pursuant to this Agreement, shall constitute an automatic
certification by Borrower to Agent and Lenders that (a) all of the
representations and warranties of Borrower in this Agreement and each of the
Related Agreements are true and correct on the date of such request to the
same extent as if made on such date, except for such changes as are
specifically permitted hereunder (or under such Related Agreement) and
except for those representations and warranties made solely as of the date
hereof or the Closing Date and (b) immediately before and after making the
requested Loan or issuing the requested Letter of Credit, no Event of
Default, or Unmatured Event of Default, then exists or would result
therefrom.
2.13 Setoff. In addition to and not in limitation of all
other rights and remedies (including other rights of offset or banker's
lien) that Agent and Lenders may have under applicable law, each of Agent
and each Lender shall, upon the occurrence of any Event of Default described
in Section 6.1, or any Unmatured Event of Default described in Section
6.1(e), have the right to appropriate and apply to the payment of the
Liabilities (whether or not then due), in such order of application as Agent
may elect, any and all balances, credits, deposits (general or special, time
or demand, provisional or final), accounts or moneys of Borrower then or
thereafter with Agent or any Lender. Agent and each Lender shall promptly
advise Borrower of any such setoff and application but failure to do so
shall not affect the validity of such setoff and application.
2.14 Closing Fee. Borrower agrees to pay to Continental, for
its own account, in connection with the closing of this Agreement, a closing
fee of $150,000, which amount shall be deemed fully earned and shall be
payable in full on the Closing Date. With Agent's consent, the amount of
the closing fee may be advanced to Borrower as a Revolving Loan.
2.15 Settlements, Distributions and Apportionment of
Payments. On a weekly basis (or more frequently if required by Agent) (a
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"Settlement Date"), Agent shall provide each Lender with a statement of the
outstanding balance of the Liabilities as of the end of the Banking Day
preceding the Settlement Date (the "Pre-Settlement Determination Date") and
the current balance of the Revolving Loans funded by each Lender (whether
made directly by such Lender to Borrower or constituting a settlement by
such Lender of a previous Disproportionate Advance made by Agent on behalf
of such Lender to Borrower). If such statement discloses that such Lender's
current balance of the Revolving Loans as of the Pre-Settlement
Determination Date exceeds such Lender's Pro Rata Share of the Revolving
Loans outstanding as of the Pre-Settlement Determination Date, then Agent
shall, one (1) Banking Day after the Settlement Date, transfer to such
Lender, by wire transfer, the net amount due to such Lender in accordance
with such Lender's instructions, and if such statement discloses that such
Lender's current balance of the Revolving Loans as of the Pre-Settlement
Determination Date is less than such Lender's Pro Rata Share of the
Revolving Loans outstanding as of the Pre-Settlement Determination Date,
then such Lender shall, one (1) Banking Day after the Settlement Date,
transfer to Agent, by wire transfer the net amount due to Agent in
accordance with Agent's instructions. In addition, payments actually
received by Agent with respect to the following items shall be distributed
by Agent to Lenders as follows:
(a) Within one (1) Banking Day of receipt thereof by
Agent, payments to be applied to interest on the Loans shall be
paid to each Lender in proportion to its Pro Rata Share, subject
to any adjustments for any Disproportionate Advances so that
Agent shall receive interest on the Disproportionate Advances and
each Lender shall only receive interest on the amount of funds
actually advanced by such Lender; and
(b) Within one (1) Banking Day of receipt thereof by
Agent, payments to be applied to the unused line fee set forth in
Section 2.4.2 and the Letter of Credit commission set forth in
Section 2.2(b), shall each be paid to each Lender in proportion
to its Pro Rata Share. Notwithstanding the foregoing, if a
Lender has failed to remit its Pro Rata Share of any Loans
required to be made pursuant to Section 2.1.1 or has failed to
make a settlement payment to Agent pursuant to this Section 2.15,
no payment shall be made to such Lender by Agent at any time such
Lender's share of the outstanding Loans is less than such
Lender's Pro Rata Share. If Agent or any Lender fails to pay the
other any payment due under this Agreement on its due date, the
party to whom such payment is due shall be entitled to recover
interest from the party obligated to make such payment at a rate
per annum equal to the overnight Federal Funds Rate.
3. COLLATERAL.
3.1 Grant of Security Interest. As security for the
payment of all Loans now or hereafter made by, or on behalf of, Lenders to
Borrower hereunder or under any Note, and as security for the payment or
other satisfaction of all other Liabilities (including without limitation
all reimbursement obligations under any Letters of Credit), Borrower hereby
grants to Agent, for the benefit of itself and Lenders, a security interest
in and to the following property of Borrower, whether now owned or existing,
or hereafter acquired or coming into existence, wherever now or hereafter
located (all such property is hereinafter referred to collectively as the
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"Borrower Collateral"):
(a) Accounts Receivable; Contract Rights; any and
all security deposits and other security held by or granted to
Borrower to secure payments from any and all persons who are or
may become obligated to Borrower under, with respect to, or on
account of any Account Receivable or Contract Right; and all
chattel paper and instruments evidencing, arising out of or
relating to any obligations to Borrower for goods sold or leased
or services rendered, or otherwise arising out of or relating to
any property described in this Section 3.1;
(b) any and all amounts from time to time owing by
Subsidiaries to Borrower pursuant to the Master Revolving Credit
Note; all agreements, instruments and documents evidencing or
otherwise pertaining to the loans made pursuant to such Master
Revolving Credit Note; and any or all security held by or granted
to Borrower by any or all Subsidiaries to secure amounts owing by
any or all Subsidiaries to Borrower pursuant to such Master Re-
volving Credit Note;
(c) Inventory (whether or not Eligible Inventory);
(d) Any and all balances, credits, deposits (general
or special, time or demand, provisional or final), accounts or
monies of or in the name of Borrower now or hereafter with Agent
and any and all property of every kind or description of or in
the name of Borrower now or hereafter, for any reason or purpose
whatsoever, in the possession or control of, or in transit to, or
standing to Borrower's credit on the books of, Agent, any agent
or bailee for Agent, or any Participant;
(e) To the extent related to the property described
in clauses (a) through (d) above, all books, correspondence,
credit files, records, invoices and other papers and documents,
including without limitation, to the extent so related, all
tapes, cards, computer runs, computer programs and other papers
and documents in the possession or control of Borrower or any
computer bureau from time to time acting for Borrower, and, to
the extent so related, all rights in, to and under all policies
of insurance, including claims of rights to payments thereunder
and proceeds therefrom, including any credit insurance; and
(f) All products and proceeds (including but not
limited to any Accounts Receivable or other proceeds arising from
the sale or other disposition of any property described above,
any returns of Inventory sold by Borrower, and the proceeds of
any insurance covering any of the property described above) of
any of the foregoing.
3.2 Accounts Receivable.
(a) If requested by Agent, Borrower shall notify Agent
immediately of each dispute or claim by any Account Debtor of an amount in
excess of $30,000 and settle or adjust them, or cause them to be settled or
adjusted, at no expense to Agent or Lenders. If Agent directs after the
occurrence of an Event of Default, no discount or credit allowance shall be
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granted thereafter by Borrower or any Subsidiary to any Account Debtor,
other than discounts and trade allowances offered in the ordinary course of
Borrower's or a Subsidiary's business, on terms no more advantageous to
customers than those being granted by Borrower or such Subsidiary to
customers on the Closing Date. If requested by Agent, Borrower will, and
will cause each Subsidiary to, make proper entries in its books and records,
disclosing the assignment of Accounts Receivable to Agent, for the benefit
of itself and Lenders.
(b) Borrower warrants and covenants that: (i) all of the
Accounts Receivable are and will continue to be bona fide existing
obligations created by the sale of goods, the rendering of services, or the
furnishing of other good and sufficient consideration to Account Debtors in
the regular course of business; (ii) all shipping or delivery receipts and
other documents furnished or to be furnished to Agent upon Agent's request
in connection therewith are and will be genuine; and (iii) none of the
Accounts Receivable identified or included on any schedule, Borrowing Base
Certificate or report as Eligible Accounts Receivable fail at the time so
identified or included to satisfy any of the requirements for eligibility
set forth in the definition of Eligible Accounts Receivable.
(c) Agent is authorized and empowered (which authorization
and power, being coupled with an interest, is irrevocable until the last to
occur of termination of this Agreement and payment and performance in full
of all of the Payment Liabilities under this Agreement) at any time in its
sole and absolute discretion:
(i) After the occurrence of an Event of Default, to
request, in the name of Agent, in Borrower's or a Subsidiary's
name or the name of a third party, confirmation from any Account
Debtor or party obligated under or with respect to any Collateral
of the amount shown by the Accounts Receivable or other
Collateral to be payable, or any other matter stated therein;
(ii) To endorse in Borrower's or a Subsidiary's name
and to collect any chattel paper, checks, notes, drafts,
instruments or other items of payment tendered to or received by
Agent in payment of any Account Receivable or other obligation
owing to Borrower or such Subsidiary;
(iii) After the occurrence of an Event of Default, to
notify, either in Agent's name or Borrower's or a Subsidiary's
name, and/or to require Borrower or such Subsidiary to notify,
any Account Debtor or other Person obligated under or in respect
of any Collateral, of the fact of Agent's Lien thereon, for the
benefit of itself and Lenders, and of the collateral assignment
thereof to Agent, for the benefit of itself and Lenders;
(iv) After the occurrence of an Event of Default, to
direct, either in Borrower's or a Subsidiary's name or Agent's
name, and/or to require Borrower or such Subsidiary to direct,any
Account Debtor or other Person obligated under or in respect of
any Collateral to make payment directly to Agent of any amounts
due or to become due thereunder or with respect thereto; and
(v) After the occurrence of an Event of Default, to
demand, collect, surrender, release or exchange all or any part
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of any Collateral or any amounts due thereunder or with respect thereto, or
compromise or extend or renew for any period (whether or not longer than the
initial period) any and all sums which are now or may hereafter become due
or owing upon or with respect to any of the Collateral, or enforce, by suit
or otherwise, payment or performance of any of the Collateral either in
Agent's own name or in the name of Borrower or a Subsidiary.
Under no circumstances shall Agent be under any duty to act in regard to any
of the foregoing matters. The costs relating to any of the foregoing
matters, including Attorneys' Fees and out-of-pocket expenses, and the cost
of any Depository Account, Assignee Deposit Account, or other bank account
or accounts which may be required hereunder, shall be borne solely by
Borrower whether the same are incurred by Agent or Borrower, and Agent may
advance same to Borrower as a Revolving Loan.
(d) Unless otherwise consented to by Agent, Borrower will,
forthwith upon receipt by Borrower of all checks, drafts, cash and other
remittances in payment or as proceeds of, or on account of, any of the
Accounts Receivable or other Collateral, deposit the same in special bank
accounts (the "Depository Accounts") at such banks or financial institutions
as Agent shall consent. Said proceeds shall be deposited in precisely the
form received except for Borrower's endorsement where necessary to permit
collection of items, which endorsement Borrower agrees to make. Pending
such deposit, Borrower agrees not to commingle any such checks, drafts, cash
and other remittances with any of its funds or property, but will hold them
separate and apart therefrom and upon an express trust for Agent, for the
benefit of itself and Lenders, until deposit thereof is made in the
Depository Accounts. All funds in the Depository Accounts at the end of
each Banking Day will be wire transferred or transferred by other means
acceptable to Agent to a special bank account (the "Assignee Deposit
Account") at Continental, over which Agent alone has power of withdrawal.
Borrower acknowledges that the maintenance of the Assignee Deposit Account
is solely for the convenience of Agent in facilitating its own operations,
and Borrower does not and shall not have any right, title or interest in the
Assignee Deposit Account or in the amounts at any time appearing to the
credit thereof, except to the extent that such amounts are transferred to a
cash collateral account in accordance with Section 2.10(b)(ii). Borrower
agrees not to maintain any depository accounts other than Depository
Accounts and the Assignee Deposit Account established pursuant to this
Section 3.2(d) and other than depository accounts established solely for the
proceeds of property of Borrower and the Subsidiaries other than the
Collateral, pursuant to the terms of the Senior Loan Documents. The
foregoing shall not limit Borrower's ability to maintain such separate
disbursement accounts as Borrower determines to be appropriate from time to
time. Upon Agent's request after the occurrence of an Event of Default,
Borrower agrees to notify its Account Debtors to make all payments in
respect of Borrower's Accounts Receivable directly to one or more lockbox
accounts under the control of Agent and evidenced by agreements in form and
substance satisfactory to Agent. Upon the liquidation of all Payment
Liabilities, Agent will pay over to Borrower any excess amounts received by
Agent as payment or proceeds of Collateral, whether received by Agent as a
deposit in the Assignee Deposit Account, contained in a lockbox account or
any Depository Account or received by Agent as a direct payment on any of
the sums due hereunder. Borrower will cause each of its Subsidiaries to
establish accounts comparable to those set forth above for the collection of
the proceeds of their Accounts Receivable, and Borrower shall cause each
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Subsidiary to take all other actions to implement the collection mechanism
set forth in this Section 3.2(d).
(e) Borrower appoints Agent, or any Person whom Agent may
from time to time designate, as Borrower's attorney and agent-in-fact with
power: (i) after the occurrence of an Event of Default, to notify the post
office authorities to change the address for delivery of Borrower's mail to
an address designated by Agent; (ii) to receive, open and dispose of all
mail addressed to Borrower, but received by Agent; (iii) after the
occurrence of an Event of Default, to send requests for verification of
Accounts Receivable or other Collateral to Account Debtors; (iv) to open
under Agent's sole control (subject, where applicable, to the provisions of
Section 2.10(b)), an Assignee Deposit Account, Depository Accounts, lockbox
accounts or other accounts required under this Agreement for the collection
of Accounts Receivable or other Collateral, if not required contem-
poraneously with the execution hereof and if not previously opened by
Borrower; and (v) to do all other things which Agent is permitted to do
under this Agreement or any Related Agreement or which are necessary to
carry out this Agreement and the Related Agreements. Neither Agent nor any
of its directors, officers, employees or agents will be liable for any acts
of commission or omission nor for any error in judgment or mistake of fact
or law, unless the same shall have resulted from gross negligence or willful
misconduct. The foregoing appointment and power, being coupled with an
interest, is irrevocable until all Payment Liabilities under this Agreement
are paid and performed in full and this Agreement is terminated. Borrower
expressly waives presentment, demand, notice of dishonor and protest of all
instruments and any other notice to which it might otherwise be entitled.
(f) If any Account Receivable or Contract Right in an amount
in excess of $10,000 arises out of a contract with the United States or any
department, agency, or instrumentality thereof, Borrower will, upon Agent's
request, immediately notify Agent in writing and execute any instruments and
take any steps required by Agent in order that all monies due and to become
due under such contract shall be assigned to Agent, for the benefit of
itself and Lenders, and notice thereof given to the government under the
Federal Assignment of Claims Act of 1940, as amended, or other applicable
laws or regulations.
(g) If any Account Receivable or Contract Right is evidenced
by chattel paper or promissory notes, trade acceptances, or other
instruments for the payment of money, Borrower will, unless Agent shall
otherwise agree, deliver the originals of same to Agent, appropriately
endorsed to Agent's order and, regardless of the form of such endorsement,
Borrower hereby expressly waives presentment, demand, notice of dishonor,
protest and notice of protest and all other notices with respect thereto.
3.3 Inventory.
(a) Borrower warrants and covenants that: (i) all of the
Inventory is, and at all times shall be, owned by Borrower or a Subsidiary
free of all claims and Liens (except as set forth in Section 5.16); and (ii)
neither Borrower nor any Subsidiary will make any further assignment of any
thereof or create or permit to exist any further Lien thereon, unless
approved in writing by Requisite Lenders, nor permit any of Agent's rights
therein to be affected by any attachment, levy, garnishment or other
judicial process.
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(b) Neither Agent nor any Lender shall be liable or
responsible in any way for the safekeeping of any Inventory delivered to it,
to any bailee appointed by or for it, to any warehouseman, or under any
other circumstances. Neither Agent nor any Lender shall be responsible for
collection of any proceeds or for losses in collected proceeds held by
Borrower or any Subsidiary in trust for Agent. Any and all risk of loss for
any or all of the foregoing shall be upon Borrower and the Subsidiaries,
except for such loss as shall result from Agent's or any Lenders' gross
negligence or willful misconduct.
(c) Any material change in the value (other than changes
resulting from market price changes), or condition of any Inventory, and any
errors discovered in any monthly inventory certificate under Section 5.1.3
or any other inventory schedule delivered to Agent and Lenders, shall be
reported to Agent promptly. Borrower represents and warrants that, as to
each schedule of Inventory delivered to Agent or any Lender:
(i) The descriptions, origins, sizes, qualities, quantities,
weights, and markings of all goods stated thereon, or on any
attachment thereto, are true and correct in all material
respects;
(ii) None of the goods are defective, of second quality,
used, or goods returned after shipment, except where described as
such; and
(iii) All Inventory not included on such schedule has been
previously scheduled.
3.4 Supplemental Documentation. At Agent's request,
Borrower shall execute and deliver, or cause to be executed and delivered,
to Agent, at any time or times hereafter, such agreements, documents,
financing statements, warehouse receipts, bills of lading, notices of
assignment of Accounts Receivable, schedules of Accounts Receivable
assigned, and other written matter necessary or reasonably requested by
Agent to perfect and maintain perfected Agent's security interest in the
Collateral, for the benefit of itself and Lenders (all the above hereinafter
referred to as "Supplemental Documentation"), in form and substance
acceptable to Agent, and pay all taxes, fees and other costs and expenses
associated with any recording or filing of the Supplemental Documentation.
Borrower hereby irrevocably makes, constitutes and appoints Agent (and all
Persons designated by Agent for that purpose) as Borrower's true and lawful
attorney (and agent-in-fact) (which appointment and power, being coupled
with an interest, is irrevocable until the last to occur of termination of
this Agreement and payment and performance in full of all of the Payment
Liabilities under this Agreement) to sign the name of Borrower on any of the
Supplemental Documentation and to deliver any of the Supplemental
Documentation to such Persons as Agent in its sole and absolute discretion,
may elect. Borrower agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement.
3.5 Collateral for the Benefit of Agent and Lenders. All
Liens granted to Agent hereunder and under the Related Agreements and all
Collateral delivered to Agent hereunder and under the Related Agreements
shall be deemed to have been granted and delivered to Agent, for the benefit
of itself and Lenders, to secure the Liabilities.
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4. REPRESENTATIONS AND WARRANTIES.
To induce Agent and Lenders to make Loans to, and issue Letters
of Credit for the account of, Borrower under this Agreement, Borrower makes
the following representations and warranties to Agent and Lenders, all of
which shall be true and correct as of the date the initial Loan is made or
the initial Letter of Credit is issued and shall survive the execution of
this Agreement and the making of the initial Loan and the issuance of the
initial Letter of Credit:
4.1 Organization. Borrower and all of its corporate
Borrowing Subsidiaries are corporations duly organized, validly existing and
in good standing under the laws of the jurisdictions of their respective
incorporation. All of Borrower's other Borrowing Subsidiaries, if any, are
entities duly organized, validly existing and in good standing under the
laws of the jurisdictions of their respective organization. Borrower and
all of the Borrowing Subsidiaries are in good standing and are duly
qualified to do business in each jurisdiction where, because of the nature
of their respective activities or properties, such qualification is
required, except for those states in which its failure to qualify to do
business would not be likely to have a Material Adverse Effect. Except as
set forth on Schedule 4.1, on the date hereof, Borrower and each Borrowing
Subsidiary conducts business in its own name exclusively. Schedule 4.1 sets
forth a complete and accurate list, as of the date of this Agreement, of (a)
the state of formation of Borrower, (b) each state in which Borrower is
qualified to do business and (c) all of Borrower's tradenames, trade styles
or doing business forms.
4.2 Authorization. Borrower is duly authorized to execute
and deliver this Agreement, any Notes, and any Related Agreements or
Supplemental Documentation contemplated by this Agreement, and is and will
continue to be duly authorized to borrow monies hereunder and to perform its
obligations under this Agreement, any Notes and any such Related Agreements
and Supplemental Documentation. Each Borrowing Subsidiary is duly
authorized to execute and deliver any Related Agreements or Supplemental
Documentation contemplated to be delivered by such Borrowing Subsidiary, and
is and will continue to be duly authorized to perform its obligations
thereunder. The execution, delivery and performance by (a) Borrower of this
Agreement, any Notes, and any Related Agreements or Supplemental
Documentation contemplated by this Agreement, and the borrowings hereunder
and (b) each Borrowing Subsidiary of any Related Agreements or Supplemental
Documentation to which it is a party, do not and will not require any
consent or approval of any governmental agency or authority.
4.3 No Conflicts. The execution, delivery and performance
by (a) Borrower of this Agreement, any Notes, and any Related Agreements or
Supplemental Documentation contemplated by this Agreement and (b) each
Borrowing Subsidiary of any Related Agreements or Supplemental Documentation
to which it is a party, do not and will not conflict with (i) any provision
of law, (ii) the Certificate or Articles of Incorporation, as applicable, or
by-laws, of Borrower or such Borrowing Subsidiary, (iii) any agreement
binding upon Borrower or such Borrowing Subsidiary or (iv) any court or
administrative order or decree applicable to Borrower or such Borrowing
Subsidiary, and do not and will not require, or result in, the creation or
imposition of any Lien on any asset of Borrower or any Borrowing Subsidiary,
except as provided herein.
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4.4 Validity and Binding Effect. This Agreement, any Notes,
and any Related Agreements or Supplemental Documentation contemplated by
this Agreement, when duly executed and delivered will be legal, valid and
binding obligations of Borrower and each Subsidiary party thereto, as
applicable, enforceable against Borrower and each such Subsidiary in
accordance with their respective terms.
4.5 No Default. Neither Borrower nor any Subsidiary is in
default under any agreement or instrument to which Borrower or any
Subsidiary is a party or by which any of their respective properties or
assets is bound or affected, which default is reasonably likely to have a
Material Adverse Effect. No Event of Default or Unmatured Event of Default
has occurred and is continuing.
4.6 Financial Statements. Borrower's consolidated audited
financial statements as at June 30, 1993 and Borrower's consolidated
unaudited financial statements as at March 31, 1994, copies of which have
been furnished to Agent, have been prepared in conformity with GAAP applied
on a basis consistent with that of the preceding Fiscal Year and period and
present fairly the financial condition of Borrower and the Subsidiaries as
at such dates and the results of their operations for the periods then
ended, subject (in the case of the interim financial statement) to year-end
audit adjustments. Since March 31, 1994, there has been no Material Adverse
Change. Borrower's consolidated unaudited pro forma balance sheets as of
the Closing Date reflect pro forma changes in Borrower's financial condition
since March 31, 1994, including the pro forma effects of the Transactions
and the application of proceeds in respect thereof, and have been prepared
in conformity with GAAP and, to the best knowledge of Borrower, present
fairly the expected financial condition of Borrower and the Subsidiaries as
of such date.
4.7 Insurance. Schedule 4.7 hereto is a complete and
accurate summary, as of the date hereof, of the property and casualty
insurance program carried by Borrower and the Subsidiaries on the date
hereof. Schedule 4.7 includes the insurer's(s') name(s), policy number(s),
expiration date(s), amount(s) of coverage, type(s) of coverage, the annual
premium(s), deductibles and self-insured retention and describes any retro-
spective rating plan, fronting arrangement or any other self-insurance or
risk assumption agreed to by Borrower or any Subsidiary or imposed upon
Borrower or any Subsidiary by any such insurer. This summary also includes
any self-insurance program that is in effect.
4.8 Litigation; Contingent Liabilities.
(a) As of the date hereof, except for those referred to in
Schedule 4.8, there are no claims, litigation, arbitration proceedings or
governmental proceedings pending or threatened against or affecting Borrower
or any Subsidiary which involve an amount in controversy in excess of
$100,000 or which request injunctive or other equitable relief. Neither
Borrower nor any Subsidiary is subject to any claims, litigation,
arbitration proceeding or governmental proceeding, either pending or threat-
ened, the result of which is reasonably likely to have a Material Adverse
Effect.
(b) Other than any liability incident to the claims,
litigation or proceedings disclosed in Schedule 4.8 or Schedule 4.19, or
provided for or disclosed in the financial statements referred to in Section
4.6, as of the date hereof, neither Borrower nor any of the Subsidiaries has
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any contingent liabilities which are reasonably likely to have a Material
Adverse Effect.
4.9 Liens. None of the Collateral or other property,
revenues or assets of Borrower or any Subsidiary is subject to any Lien
(including but not limited to Liens pursuant to Capitalized Leases under
which Borrower or any Subsidiary is a lessee) except: (a) Liens in favor of
Agent, for the benefit of itself and Lenders; (b) Liens for current Taxes
not delinquent or Taxes being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as
may be required by GAAP are being maintained; (c) carriers', warehousemen's,
mechanics', materialmen's and other like statutory Liens arising in the
ordinary course of business securing obligations which are not overdue or
which are being contested in good faith and by appropriate proceedings and
as to which such reserves or other appropriate provisions as may be required
by GAAP are being maintained; (d) Liens listed on Schedule 4.9 and Liens
permitted by Section 5.16; (e) Liens granted to the holders of the Senior
Notes or their representatives pursuant to the Senior Loan Documents; (f)
Liens on Obligor Collateral of the Borrowing Subsidiaries in favor of
Borrower, securing the Intercompany Loans and assigned to Agent, for the
benefit of itself and Lenders; (g) other Liens securing Indebtedness not in
excess of $100,000 in the aggregate; and (h) Liens consented to in writing
by Requisite Lenders.
4.10 Subsidiaries. As of the date hereof, all of Borrower's
Subsidiaries are listed on Schedule 4.10. Schedule 4.10 sets forth, for
each such Subsidiary, a complete and accurate statement of (a) Borrower's
and each Subsidiary's percentage ownership of each of their respective
Subsidiaries, (b) the state or other jurisdiction of formation or
incorporation of each Subsidiary, (c) each state in which each Subsidiary is
qualified to do business and (d) all of each Subsidiary's trade names, trade
styles or doing business forms. Except as otherwise noted on Schedule 4.10,
all of the Subsidiaries listed on Schedule 4.10 are Restricted Subsidiaries.
4.11 Partnerships; Joint Ventures. As of the date hereof,
neither Borrower nor any of the Subsidiaries is a partner or joint venturer
in any partnership or joint venture other than the partnerships and joint
ventures listed on Schedule 4.11. Schedule 4.11 sets forth, for each such
partnership or joint venture, a complete and accurate statement of (a)
Borrower's and each Subsidiary's percentage ownership of each such
partnership or joint venture, (b) the state or other jurisdiction of
formation or incorporation, as appropriate, of each such partnership or
joint venture, (c) each state in which each such partnership or joint
venture is qualified to do business and (d) all of each such partnership's
or joint venture's trade names, trade styles or doing business forms on the
date of this Agreement.
4.12 Business and Collateral Locations.
(a) On the date hereof, the office where Borrower and each
Borrowing Subsidiary keeps its books and records concerning its Accounts
Receivable and other Collateral, and Borrower's chief place of business and
chief executive office, is located at the address of Borrower set forth on
the signature pages of this Agreement. Schedule 4.12 contains a complete
and accurate list, as of the date of this Agreement, of all of Borrower's
and each Subsidiary's places of business other than that referred to in the
first sentence of this paragraph (a).
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(b) Schedule 4.12 contains a complete and accurate list, as
of the date of this Agreement, of the locations of all Inventory and other
tangible Collateral and if any Inventory or other Collateral is not in the
possession or control of Borrower or the owner of such Collateral, the name
and mailing address of each bailee, processor, warehouseman or other Person
in possession or control thereof.
4.13 Senior Notes. The Units have been issued in accordance
with and pursuant to the terms of the Prospectus dated as of June 23, 1994
and in compliance with all applicable federal and state securities laws.
The issuance of the Units has been duly authorized by all necessary
corporate action on the part of Borrower and will not require any consent or
approval of any governmental agency or authority that has not been obtained
prior to the date hereof. The issuance of the Units and the execution of
the Senior Loan Documents does not conflict with (i) any provision of law,
(ii) the Certificate of Incorporation or by-laws of Borrower, (iii) any
agreement binding upon Borrower or (iv) any court or administrative order or
decree applicable to Borrower, and do not and will not require, or result
in, the creation or imposition of any Lien on any asset of Borrower or any
Subsidiary, except as expressly provided therein.
4.14 Eligibility of Collateral. Each Account Receivable or
item of Inventory which Borrower shall, expressly or by implication (by
inclusion on a Borrowing Base Certificate or otherwise), request Agent to
classify as an Eligible Account Receivable or as Eligible Inventory,
respectively, will, as of the time when such request is made, conform in all
respects to the requirements of such classification set forth in the
respective definitions of "Eligible Account Receivable" and "Eligible
Inventory" set forth herein.
4.15 Intentionally Omitted.
4.16 Patents, Trademarks, etc. Borrower and each of the
Borrowing Subsidiaries possesses adequate licenses, patents, patent
applications, copyrights, trademarks, trademark applications, trade styles,
and tradenames to continue to conduct its respective business as heretofore
conducted by it, and all such licenses, patents, patent applications,
copyrights, trademarks, trademark applications, trade styles, and tradenames
existing on the date hereof and that are material to the business of
Borrower or any Borrowing Subsidiary, and, in the case of patents,
trademarks and copyrights, the date of issuance thereof, are listed on
Schedule 4.16.
4.17 Solvency. Borrower and its Subsidiaries, taken as a
whole, now have capital sufficient to carry on their businesses and
transactions and all businesses and transactions in which any of them is
about to engage, and they are able to pay their debts as they mature.
Borrower and its Subsidiaries, taken as a whole, are now solvent and now own
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the debts of Borrower and its
Subsidiaries.
4.18 Contracts; Labor Matters. Except as disclosed on
Schedule 4.18: (a) neither Borrower nor any Borrowing Subsidiary is a party
to any contract or agreement, or is subject to any charge, corporate
restriction, judgment, decree or order, which is reasonably likely to have a
Material Adverse Effect; (b) as of the date hereof, no labor contract to
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which Borrower or any Borrowing Subsidiary is a party or is otherwise
subject is scheduled to expire prior to the initial Termination Date; (c)
neither Borrower nor any Borrowing Subsidiary has, within the two (2)-year
period preceding the date of this Agreement, taken any action which would
have constituted or resulted in a "plant closing" or "mass layoff" within
the meaning of the Federal Worker Adjustment and Retraining Notification Act
of 1988 or any similar applicable federal, state or local law, and Borrower
has no reasonable expectation that any such action is or will be required at
any time prior to the initial Termination Date and (d) on the date of this
Agreement (i) neither Borrower nor any Borrowing Subsidiary is a party to
any labor dispute and (ii) there are no strikes or walkouts relating to any
labor contracts to which Borrower or any Borrowing Subsidiary is a party or
is otherwise subject.
4.19 Pension and Welfare Plans. Each Pension Plan complies,
and has been administered in compliance, in all material respects, with all
applicable statutes and governmental rules and regulations; no Reportable
Event has occurred and is continuing with respect to any Pension Plan;
neither Borrower nor any ERISA Affiliate has withdrawn from any
Multiemployer Plan in a "complete withdrawal" or a "partial withdrawal" as
defined in Section 4203 or 4205 of ERISA, respectively; no steps have been
instituted to terminate any Pension Plan; no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA; no condition exists or event or transaction
has occurred in connection with any Pension Plan or Multiemployer Plan that
is reasonably likely to have a Material Adverse Effect; and neither Borrower
nor any ERISA Affiliate is a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA of a "single-employer plan" as defined in Section
4001(a)(15) of ERISA that has two or more contributing sponsors at least two
of whom are not under common control. Except as listed in Schedule 4.19,
neither Borrower nor any ERISA Affiliate, to the extent there is joint and
several liability with Borrower to pay such benefits, has any liability to
pay any welfare benefits under any employee welfare benefit plan within the
meaning of Section 3(l) of ERISA to former employees thereof or to current
employees with respect to claims incurred after the termination of their
employment other than as required by Section 4980B of the Code or Part 6 of
Subtitle B of Title 1 of ERISA.
4.20 Regulations G and U. Borrower is not engaged in the
business of purchasing or selling Margin Stock or extending credit to others
for the purpose of purchasing or carrying Margin Stock, and no part of the
proceeds of any borrowing hereunder will be used to purchase or carry any
Margin Stock or for any other purpose which would violate any of the margin
regulations of the Federal Reserve Board.
4.21 Compliance. Except as described on Schedule 4.21 or
Schedule 4.25, Borrower and the Subsidiaries are in compliance with all
statutes and governmental rules and regulations applicable to them, the
noncompliance with which is reasonably likely to have a Material Adverse
Effect.
4.22 Taxes. Each of Borrower and the Subsidiaries has filed
all tax returns which are required to have been filed and has paid, or made
adequate provisions for the payment of, all of its Taxes which are due and
payable, except such Taxes, if any, as are being contested in good faith and
by appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP have been maintained. The
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federal income tax liability of Borrower and the Subsidiaries has been
audited by the Internal Revenue Service and has been finally determined and
satisfied (or the time for audit has expired) for all tax years up to and
including the tax year ended June 30, 1990. Except as described on Schedule
4.22, Borrower is not aware of any proposed assessment against Borrower or
any of the Subsidiaries for additional Taxes (or any basis for any such
assessment) which is reasonably likely to have a Material Adverse Effect.
4.23 Investment Company Act Representation. Borrower is not
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
4.24 Public Utility Holding Company Act Representation.
Borrower is not a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
4.25 Environmental and Safety and Health Matters. Except as
disclosed on Schedule 4.25, Borrower and each of the Subsidiaries and/or
each property, operations and facility that Borrower or any Subsidiary may
own, operate or control (a) complies in all respects with (i) all applicable
Environmental Laws the failure with which to comply would be reasonably
likely to have a Material Adverse Effect and (ii) all applicable
Occupational Safety and Health Laws the failure with which to comply would
be reasonably likely to have a Material Adverse Effect; (b) is not subject
to any judicial or administrative proceeding alleging the violation of any
Environmental Law or Occupational Safety and Health Law which violation, if
proven, would be reasonably likely to have a Material Adverse Effect; (c)
has not received any notice (i) that it may be in violation of any
Environmental Law or Occupational Safety and Health Law which violation, if
proven, would be reasonably likely to have a Material Adverse Effect, (ii)
threatening the commencement of any proceeding relating to allegedly
unlawful, unsafe or unhealthy conditions, which, if adversely determined,
would be reasonably likely to have a Material Adverse Effect, or (iii)
alleging that it is or may be responsible for any response, cleanup, or
corrective action, including but not limited to any remedial
investigation/feasibility studies, under any Environmental Law or
Occupational Safety and Health Law, which, if adversely determined, would be
reasonably likely to have a Material Adverse Effect; (d) to Borrower's
knowledge, is not the subject of federal or state investigation evaluating
whether any investigation, remedial action or other response is needed to
respond to (i) a Release or threatened Release into the environment of any
Hazardous Material or the spillage, disposal or release or threatened
release into the environment of any other hazardous, toxic or dangerous
waste, substance or constituent, or other substance which, if adversely
determined, would be reasonably likely to have a Material Adverse Effect or
(ii) any allegedly unsafe or unhealthful condition, which, if adversely
determined, would be reasonably likely to have a Material Adverse Effect;
(e) has not filed any notice under or relating to any Environmental Law or
Occupational Safety and Health Law indicating or reporting (i) any past or
present Release into the environment of, or treatment, storage or disposal
of, any Hazardous Material or spillage, disposal or release into the
environment of any other hazardous, toxic or dangerous waste, substance or
constituent, or other substance or (ii) any potentially unsafe or
unhealthful condition, in either case, which, if adversely determined, would
be reasonably likely to have a Material Adverse Effect, and to Borrower's
knowledge, there exists no basis for such notice irrespective of whether
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such notice was actually filed; and (f) has no contingent liability in
connection with (i) any actual or potential Release into the environment of,
or otherwise with respect to, any Hazardous Material or spillage, disposal
or release into the environment of any other hazardous, toxic or dangerous
waste, substance or constituent, or other substance, whether on any premises
owned or occupied by Borrower or any Subsidiary or on any other premises,
which would be reasonably likely to have a Material Adverse Effect or (ii)
any unsafe or unhealthful condition, which would be reasonably likely to
have a Material Adverse Effect. Except as disclosed on Schedule 4.25, there
are no Hazardous Materials on, in or under any property or facilities owned,
operated or controlled by Borrower or any Subsidiary the presence of which
would be reasonably likely to have a Material Adverse Effect, including but
not limited to such Hazardous Materials that may be contained in underground
storage tanks, but excepting such Hazardous Materials used in accordance
with all applicable laws and in the same manner as an ordinary consumer
(e.g., gasoline in tanks of motor vehicles, small amounts of cosmetic
cleaners, etc.).
4.26 Related Agreements. As of the date hereof, all
representations and warranties of Borrower and each Subsidiary contained in
any Related Agreements and any agreement evidencing any of the other Trans-
actions (whether such representations and warranties were made to Agent or
any Lender or to another Person), other than the Senior Loan Documents, are
true and correct as if made on the date hereof (except for those
representations and warranties which are expressly made as of another
specified date) and Borrower hereby adopts and affirms all such
representations and warranties which Borrower agrees shall be incorporated
by reference herein and made a part hereof.
4.27 Capitalized Lease Obligations. As of the date hereof,
the Indebtedness of Borrower and its Subsidiaries under Capitalized Leases
is as set forth on Schedule 4.27.
5. BORROWER COVENANTS.
From the date of this Agreement and thereafter until the Credit
is terminated and all Payment Liabilities of Borrower hereunder are paid in
full, Borrower agrees that unless Agent, at the written direction of
Requisite Lenders, shall otherwise consent in writing, it will:
5.1 Financial Statements and Other Reports. Furnish to
Agent and each Lender, in form satisfactory to Agent:
5.1.1 Financial Reports:
(a) Annual Audited Financial Statements. Within ninety (90)
days after each Fiscal Year, a copy of the annual audited financial
statements of Borrower and the Subsidiaries prepared on a consolidated basis
and in conformity with GAAP and certified by an independent certified public
accountant who shall be satisfactory to Agent, together with (i) a
certificate from such accountant, (x) in the form attached hereto as Exhibit
B, acknowledging to Agent and Lenders such accountant's understanding that
Agent, Lenders and any Participant are relying on such annual audit report,
(y) containing a computation of, and showing compliance with, each of the
financial ratios and restrictions contained in this Section 5 or in
Supplement A, and (z) to the effect that, in making the examination
necessary for the signing of such annual audit report, such accountant has
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not become aware of any Event of Default or Unmatured Event of Default that
has occurred and is continuing and that relates to financial or other
accounting matters or the financial ratios and restrictions contained in
this Section 5 or in Supplement A, or, if such accountant has become aware
of any such event, describing it and the steps, if any, being taken to cure
it and (ii) the annual operating statements of Borrower and the Subsidiaries
prepared on a consolidating basis and in conformity with GAAP applied in a
manner consistent with the audit report referred to in preceding clauses
(a)(i), signed by Borrower's chief financial officer.
(b) Monthly Financial Statement. Within thirty (30) days
after the end of each month of each Fiscal Year of Borrower, a copy of the
unaudited financial statement of Borrower and the Subsidiaries prepared on a
consolidated basis and in conformity with GAAP applied in a manner
consistent with the audit report referred to in preceding clause (a)(i),
signed by Borrower's chief financial officer and consisting of at least a
balance sheet as at the close of such month and an income statement and cash
flow statement for such month and for the period from the beginning of such
Fiscal Year to the close of such month, compared, in each case, to the
actual results for the same period during the prior Fiscal Year and to
Borrower's budget (delivered pursuant to Section 5.1.1(c), for the current
Fiscal Year.
(c) Annual Budgets. Within thirty (30) days after the end
of each Fiscal Year of Borrower, a copy of an annual budget for the current
Fiscal Year, prepared on a consolidated basis and in conformity with GAAP
applied in a manner consistent with the prior Fiscal Year's budget, signed
by Borrower's chief financial officer and consisting of at least a balance
sheet, an income statement and a cash flow statement, each calculated on a
quarter by quarter basis.
(d) Officer's Certificate. Together with the financial
statements furnished by Borrower under the preceding clauses (a), and (b),
a certificate of Borrower's chief financial officer in the form of Exhibit
C, dated the date of such annual audit report or such monthly financial
statement, as the case may be, containing a statement that no Event of
Default or Unmatured Event of Default has occurred and is continuing, or, if
there is any such event, describing it and the steps, if any, being taken to
cure it, and containing a computation of, and showing compliance with, each
of the financial ratios and restrictions contained in this Section 5 or in
Supplement A.
5.1.2 Agings. Within fifteen (15) days after the end of each
month, an aging of all Accounts Receivable and an aging of all accounts
payable of Borrower and the Borrowing Subsidiaries as of the end of such
month, in each case in form and content acceptable to Agent.
5.1.3 Inventory Certification. Within fifteen (15) days after
the end of each month, an Inventory certification report as of the end of
the month for all Inventory locations of Borrower and the Borrowing
Subsidiaries as of the end of such month, in form and content acceptable to
Agent.
5.1.4 Other Reports and Information:
(a) SEC and Other Reports. Copies of each filing and report
made by Borrower or any Subsidiary with or to any securities exchange or the
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Securities and Exchange Commission promptly upon the filing or making
thereof;
(b) Report of Change Relating to Borrower or Subsidiaries.
Promptly from time to time, a written report of any change in the
information set forth in Schedule 4.10 concerning Borrower or any
Subsidiary;
(c) Intercompany Loans. Within fifteen (15) days after the
end of each month, a list of all outstanding balances of each Borrowing
Subsidiary's Intercompany Loan as of the end of such month, together with a
list of all debits and credits with respect thereto, in form and content
acceptable to Agent; and
(d) Other Reports. Any information required to be provided
pursuant to other provisions of this Agreement, and such other reports or
information from time to time reasonably requested by Agent on behalf of
itself or any Lender. As of the date hereof, it is not Agent's intent to
require that Borrower provide information to Agent and Lenders in excess of,
or at times other than, that specifically required to be provided by the
terms of this Agreement; however, Agent reserves the right, from time to
time, in its reasonable judgment, to require Borrower to provide information
at different times than currently required and/or to provide additional
types of information.
5.2 Notices. Notify Agent in writing of any of the
following, within the periods indicated, describing the same and, if applic-
able, the steps being taken by the Person(s) affected with respect thereto:
(a) Concurrent Reporting. Concurrently with the occurrence
thereof:
(i) the consummation of any Acquisition; and
(ii) any change in the location of Borrower's or any
Subsidiary's chief executive office or chief place of business.
(b) Prompt Reporting. Within ten (10) Banking Days after
Borrower learns of the occurrence thereof (or, in the case of clause (viii),
after the delivery or receipt thereof):
(i) Default. The occurrence of (i) an Event of
Default or Unmatured Event of Default and (ii) the default by
Borrower, any other Obligor or any Subsidiary under any note,
indenture, loan agreement, mortgage, lease, deed or other similar
agreement to which Borrower, any other Obligor or any Subsidiary,
as appropriate, is a party or by which it is bound (including
without limitation any Senior Loan Document or Subordinated Debt
Document) that evidences or secures Indebtedness in a principal
amount in excess of $500,000, or where such default would be
reasonably likely to have a Material Adverse Effect;
(ii) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding affecting
Borrower, any other Obligor, any Subsidiary or any Collateral,
involving an amount in controversy in excess of $2,000,000,
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whether or not considered to be covered by insurance, or request-
ing injunctive relief;
(iii) Judgment. The entry of any uninsured judgment
or decree against Borrower, any other Obligor or any Subsidiary,
if the amount of such judgment exceeds $500,000;
(iv) Material Adverse Change or Effect. The
occurrence of a Material Adverse Change or the occurrence of any
event that would be reasonably likely to have a Material Adverse
Effect;
(v) Change in Chief Executive Officer or Lines of
Business. If any change occurs in the Person holding the
position of chief executive officer of Borrower, or any change
occurs in Borrower's or any Subsidiary's line(s) of business;
(vi) Insurance Cancellation. Any cancellation of any
insurance by Borrower or any Subsidiary or any receipt by
Borrower or any Subsidiary of any notice of any cancellation by
any of its insurers;
(vii) Other Indebtedness Notices. Copies of any
amendments, waivers or consents, notices of breach or default,
notices relating to the exercise or nonexercise of any remedy
available to any Person, notices of indemnity or other claims,
written materials relating to any dispute, written materials
relating to the exercise of any rights derived from or arising in
connection with any Indebtedness and other written communications
of a material nature, including any communications by Borrower in
connection with the Senior Loans or the Subordinated Debt other
than any such notice or other written materials already sent to
Agent pursuant to any other Section of this Agreement; and
(viii) Stock Purchase/Acquisitions. Copies of any
agreements, instruments and documents and any amendments, waivers
or consents, notices of breach or default, notices relating to
the exercise or nonexercise of any remedy available to any
Person, notices of indemnity or other claims, written materials
relating to any dispute, written materials relating to the
exercise of any rights derived from or arising in connection with
the Stock Repurchase or any Acquisition and other written
communications of a material nature, pertaining thereto.
(c) Monthly Reporting - Name Changes. Within ten (10)
Banking Days after the end of the month during which such a change occurs,
any change in the name of Borrower, any Subsidiary or any other Obligor.
(d) Quarterly Reporting. Within ten (10) Banking Days after
the end of the fiscal quarter during which Borrower learns of the occurrence
thereof:
(i) Pension Plans and Welfare Plans. The occurrence
of a Reportable Event with respect to any Pension Plan; the
filing of a notice of intent to terminate a Pension Plan by
Borrower or any ERISA Affiliate; the institution of proceedings
to terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial withdrawal"
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as defined in Sections 4203 and 4205, respectively, of ERISA by
Borrower or any ERISA Affiliate from any Multiemployer Plan; the
failure of Borrower or any ERISA Affiliate to make a required
contribution to any Pension Plan, including but not limited to
any failure to pay an amount sufficient to give rise to a Lien
under Section 302(f) of ERISA; the taking of any action with
respect to a Pension Plan that could result in the requirement
that Borrower or any ERISA Affiliate furnish a bond or other
security to the PBGC or such Pension Plan; the occurrence of any
other event with respect to any Pension Plan that is reasonably
likely to have a Material Adverse Effect; or, with respect to any
"employee welfare benefit plan" as defined in Section 3(l) of
ERISA which covers former employees thereof or current employees
and their beneficiaries with respect to claims incurred after the
termination of their employment, the establishment of a new plan
subject to ERISA or an amendment to any existing plan which will
result in a material increase in contributions or benefits under
such plan or the incurrence of any material increase in the
liability of Borrower or an ERISA Affiliate to the extent there
is joint and several liability with Borrower or any other Obligor
or any Subsidiary;
(ii) Business and Collateral Information. Any change
or proposed change in any of the information set forth on
Schedule 4.10 or Schedule 4.12, including but not limited to (i)
the formation of any new Subsidiary, (ii) any change in the
location of any Inventory or any Collateral to a location not
included on such Schedule, (iii) the identity of any new bailee,
processor, warehouseman or other Person in possession or control
of any Inventory or other Collateral, (iv) any opening, closing
or other change in the list of offices and other places of
business of Borrower and each Subsidiary and (v) any opening,
closing or other change in the offices and other places of
business of each other Obligor;
(iii) Insurance Information. Any material change in
the information set forth in Schedule 4.7;
(iv) Environmental and Safety and Health Matters.
The occurrence of any event, or the acquisition of any
information which, if it had occurred or was true on or before
the Closing Date, would have been required to have been disclosed
and included on Schedule 4.25, including but not limited to
existence of any Environmental Lien and receipt of any notice
from any federal, state or local government or agency with
respect to any actual or alleged violation of any Environmental
Law or any Occupational Safety and Health Law;
(v) Change in Other Operating Management. If any
change occurs in any of the Persons holding the positions of
chief financial officer or divisional vice president of Borrower;
or any change occurs in Borrower's or any Subsidiary's line(s) of
business;
(vi) Patents, Etc. Any change to the list of
patents, trademarks, copyrights and other information set forth
in Schedule 4.16;
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(vii) Litigation. An update of any changes to
Schedule 4.8 since the last quarterly update, disclosing all
newly instituted claims, litigation, arbitration proceedings or
governmental proceedings against or affecting Borrower or any
Subsidiary which involves an amount in controversy in excess of
$100,000 or which requests injunctive or other equitable relief,
and which discloses any significant events or occurrences in any
of the matters set forth on Schedule 4.8 or any updates
previously provided thereto;
(viii) Certain Changes. Any change in the information
set forth in Schedule 4.1 or Schedule 4.11 concerning Borrower,
any Subsidiary or any partnership or joint venture; and
(ix) Other Notices. Notice of the occurrence of such
other event as Agent may reasonably from time to time specify.
(e) Other Notices. On a timely basis, any notices required
to be provided pursuant to any Related Agreement or the other provisions of
this Agreement.
5.3 Existence. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, its respective existence as a
corporation or other form of business organization, as the case may be, and
all rights, privileges, licenses, patents, patent rights, copyrights,
trademarks, trade names, trade styles, franchises and other authority to the
extent material and necessary for the conduct of its respective business in
the ordinary course as conducted from time to time.
5.4 Nature of Business. Engage in, and cause each
Subsidiary to engage in, substantially the same fields of business as it is
engaged in on the date hereof.
5.5 Books, Records and Access. Maintain, and cause each
Subsidiary to maintain, complete and accurate books and records (including
but not limited to records relating to Accounts Receivable, Inventory, and
other Collateral and property), in which full and correct entries in
conformity with GAAP shall be made of all dealings and transactions in
relation to its respective business and activities, including without
limitation complete and accurate records of all debits and credits in
respect of all Intercompany Loans. Cause its books and records as at the
end of any calendar month to be posted and closed not more than thirty (30)
days after the last business day of such month. Permit, and cause each
Subsidiary to permit, access by Agent and its agents and employees to the
books and records of Borrower and such Subsidiary at Borrower's or such
Subsidiary's place or places of business at intervals to be determined by
Agent (but in the absence of an Event of Default no more than four (4) times
each in any twelve (12) month period) upon reasonable prior notice and
during normal business hours and without hindrance or delay, and permit and
cause each Subsidiary to permit Agent and its agents and employees to
inspect the books and records and location of such Subsidiary and to
inspect, audit, check and make copies and/or extracts from the books,
records, computer data and records, computer programs, journals, orders,
receipts, correspondence and other data relating to Inventory, Accounts
Receivable, and, any other Collateral and property, or relating to any other
transactions between the parties hereto; provided, that Borrower shall
permit each Lender and its respective agents and employees to accompany
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Agent on each such visit; and provided further, that after the occurrence of
an Event of Default, Agent and Lenders may have access to such premises at
such times as they desire, without having given prior notice. Any and all
such inspections, appraisals and/or audits by Agent and its agents and
employees relating to Borrower's books and records and location shall be at
Borrower's expense, no matter when the same shall occur; and any and all
such inspections, appraisals and/or audits by Agent and its agents and
employees relating to a Subsidiary's books and records and location shall be
at Borrower's expense only after the occurrence of an Event of Default.
Agent may advance such costs for which Borrower is responsible to Borrower
as a Revolving Loan.
5.6 Insurance. Maintain, and cause each Subsidiary to
maintain, insurance to such extent and against such hazards and liabilities
as is commonly maintained by companies similarly situated. Keep the
Collateral properly housed and insured for its full insurable value (subject
to customary deductibles) against loss or damage by fire, theft, explosion,
sprinklers and such other risks as are customarily insured against by
persons engaged in business similar to that of Borrower or such Subsidiary,
as applicable, with such companies, in such amounts and under policies in
such form as shall be satisfactory to Agent. Certificates of such policies
of insurance (other than workman's compensation insurance) have been
delivered to Agent prior to the date hereof together with evidence of
payment of all premiums therefor then due; certificates with respect to
worker's compensation insurance and evidence of premium payment shall be
delivered to Agent within thirty (30) days after the Closing Date. Borrower
shall cause each issuer of an insurance policy for Borrower or any
Subsidiary to provide Agent within thirty (30) days after the Closing Date,
with an endorsement or an independent instrument naming Agent as an
additional insured, for the benefit of itself and Lenders. In the event
Borrower at any time or times hereafter shall fail to obtain or maintain any
of the policies of insurance required herein or to pay any premium in whole
or in part relating thereto when due, then Agent, without waiving or
releasing any obligation of or default by Borrower hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain
and maintain such policies of insurance and pay such premiums and take any
other action with respect thereto which Agent deems advisable. All sums so
disbursed by Agent, including reasonable Attorneys' Fees, court costs,
expenses and other charges relating thereto, shall be payable on demand by
Borrower to Agent, and Agent may, in its sole and absolute discretion,
advance such sums to Borrower as a Revolving Loan. Borrower shall cause
each Subsidiary to grant to Agent rights identical to those granted by
Borrower to Agent in respect of its insurance.
5.7 Intentionally Omitted.
5.8 Repair. Maintain, preserve and keep, and cause each
Subsidiary to maintain, preserve and keep, its Equipment and other
properties in good operating condition and repair, ordinary wear and tear
excepted, and from time to time make, and cause each Subsidiary to make, all
necessary and proper repairs, renewals, replacements, additions, betterments
and improvements thereto so that at all times the efficiency thereof shall
be fully preserved and maintained.
5.9 Taxes. Pay, and cause each Subsidiary to pay, when due,
all of its Taxes, unless and only to the extent that Borrower or such
Subsidiary is contesting such Taxes in good faith and by appropriate
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proceedings and Borrower or such Subsidiary has set aside on its books such
reserves or other appropriate provisions therefor as may be required by
GAAP; not file a consolidated tax return together with any other Person,
unless consented to in writing by Agent, except that Borrower and the
Subsidiaries may file consolidated returns; and not change its Fiscal Year
or tax year without Agent's prior written consent.
5.10 Compliance. Comply, and cause each Subsidiary to
comply, with all statutes and governmental rules and regulations applicable
to it, except where the failure to so comply would not be reasonably likely
to have a Material Adverse Effect.
5.11 Pension Plans. Not permit, and not permit any
Subsidiary to permit, any condition to exist in connection with any Pension
Plan that might constitute grounds for the PBGC to institute proceedings to
have such Pension Plan terminated or a trustee appointed to administer such
Pension Plan; not fail, and not permit any Subsidiary to fail, to make a
required contribution to any Pension Plan if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA; and not engage in, or
permit to exist or occur, or permit any of the Subsidiaries to engage in, or
permit to exist or occur, any other condition, event or transaction with
respect to any Pension Plan that is reasonably likely to result in a
Material Adverse Effect.
5.12 Merger, Purchase and Sale. Not, and not permit any
Subsidiary to: (a) be a party to any merger, liquidation or consolidation,
including without limitation a merger constituting a "Repurchase Event"
under the terms of the Warrant Agreement; (b) except for sales of Inventory
and Equipment in the normal course of its business, sell, transfer, convey,
lease or otherwise dispose of its assets; or (c) sell or assign, with or
without recourse, any Accounts Receivable, Contract Rights, notes receivable
or chattel paper, except as provided in this Agreement; provided, that
nothing herein shall prohibit the (i) merger of any Borrowing Subsidiary
with another Borrowing Subsidiary, and (ii) sale, transfer, conveyance,
lease or other disposition of all of the capital stock of any Subsidiary or
all or substantially all of the assets of any Subsidiary if: (A) no Event
of Default or Unmatured Event of Default then exists or would exist after
giving effect to such transaction and the application of proceeds thereof,
and (B) Borrower delivers to Agent from the proceeds thereof for application
to the Loans in accordance with Section 2.10 an amount not less than the
outstanding principal amount of the Intercompany Loan of such Subsidiary,
along with all accrued interest thereon, as of the date of such transaction,
plus the amount, if any, of any Over Advance that would result from such
transaction after giving effect to the repayment of such Intercompany Loan
but before any other application of proceeds thereof. Nothing in this
Agreement shall be deemed to in any way limit the right of the holders of
the Senior Notes or their representative to exercise any rights under the
Senior Loan Documents, although such exercise may constitute a breach of
this Section 5.12 or other Sections of this Agreement.
5.13 Restricted Payments. Not, and not permit any Subsidiary
to, (a) purchase or redeem any shares of its stock or any options or
warrants therefor, other than a repurchase of the Warrants upon the
occurrence of a merger constituting a Repurchase Event to which Agent has
consented; (b) declare or pay any dividends on any of its stock (other than
dividends payable in non-redeemable capital stock) or make any distribution
to stockholders as such or set aside any funds for any such purpose; (c)
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make any voluntary prepayment, purchase or redemption of any Senior Loans
other than as expressly required by the terms of the Senior Loan Documents;
(d) except as permitted in any applicable subordination or intercreditor
agreements, or any subordination terms contained within the applicable
Subordinated Debt Documents, pay, prepay, purchase or redeem any
Subordinated Debt; or (e) repay any amounts owing from time to time by any
Subsidiary to Borrower, exclusive of the Intercompany Loans; provided, that
if no Event of Default or Unmatured Event of Default then exists and if the
outstanding amount of the Revolving Loans does not exceed the sum of the
amounts described in Sections 2.2(i) and (ii) of Supplement A, or if there
are then no Payment Liabilities, (i) any Subsidiary may pay dividends to
Borrower from time to time, and (ii) any Borrowing Subsidiary may repay any
amounts owing from time to time by such Borrowing Subsidiary to Borrower.
5.14 Borrower's and Subsidiaries' Stock. Not permit any
Subsidiary to purchase or otherwise acquire any shares of the stock of
Borrower, and not take any action, or permit any Subsidiary to take any
action, which will result in a decrease in Borrower's or any Subsidiary's
ownership interest in any Subsidiary.
5.15 Indebtedness. Not, and not permit any Subsidiary to,
incur or permit to exist any Indebtedness (including but not limited to
Indebtedness as lessee under Capitalized Leases), except: (a) Indebtedness
under the terms of this Agreement; (b) Subordinated Debt; (c) other
Indebtedness outstanding on the date hereof and listed on Schedule 5.15; (d)
Indebtedness hereafter incurred in connection with Liens permitted under
Section 5.16(d); (e) Indebtedness in respect of the Senior Loans, with an
aggregate principal amount due upon maturity of not more than $127,200,000;
(f) Indebtedness in respect of loans from Borrower to a Borrowing
Subsidiary, including without limitation any Intercompany Loans the right to
receive payment of which has been assigned by Borrower to Agent, for the
benefit of itself and Lenders; (g) other Indebtedness not in excess of
$100,000 for Borrower and the Subsidiaries at any time outstanding; (h)
"Acquisition Indebtedness" as that term is defined in the Senior Loan
Documents in an aggregate principal amount at any one time outstanding not
to exceed $15,000,000 and no more than $6,000,000 of which may be incurred
in any twelve month period, (i) other Indebtedness, if after giving effect
thereto, the "Consolidated Coverage Ratio" (as defined in the Senior Note
Indenture) would be greater than 1.75:1.00; and (j) other Indebtedness
approved in writing by Requisite Lenders.
5.16 Liens. Not, and not permit any Subsidiary to, create or
permit to exist any Lien with respect to any property, revenue or assets now
owned or hereafter acquired, except: (a) Liens for current Taxes not
delinquent or Taxes being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as
may be required by GAAP are being maintained; (b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, and other like statutory Liens
arising in the ordinary course of business securing obligations which are
not overdue or which are being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as
may be required by GAAP are being maintained; (c) pledges or deposits in
connection with workers' compensation, unemployment insurance and other
social security legislation; (d) Liens in connection with the acquisition of
Equipment after the date hereof, by way of purchase money mortgage,
conditional sale or other title retention agreement, Capitalized Lease or
other deferred payment contract, and attaching only to the property being
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acquired, if (i) the Indebtedness secured thereby does not exceed eighty
percent (80%) of the fair market value of such property at the time of the
acquisition thereof, (ii) the Indebtedness secured by any single piece of
property does not exceed $100,000 and (iii) the aggregate outstanding amount
of such Indebtedness of Borrower and the Subsidiaries does not exceed
$3,000,000; (e) Liens in favor of Agent, for the benefit of itself and
Lenders; (f) Liens on property of Borrowing Subsidiaries in favor of
Borrower securing the Intercompany Loans and assigned to Agent, for the
benefit of itself and Lenders; (g) Liens granted to the holders of Senior
Notes or their representative pursuant to the Senior Loan Documents;
(h)Liens referred to in Section 4.9; (i) Liens granted to the holders of
Indebtedness incurred pursuant to clause (h) of Section 5.15 to the extent
such Liens do not encumber any property other than the property acquired
with such Indebtedness and to the extent such Liens do not encumber any
assets described in Section 3.1 and (j) Liens consented to in writing by
Requisite Lenders.
5.17 Guaranties. Not, and not permit any Subsidiary to,
become or be a guarantor or surety of, or otherwise become or be responsible
in any manner (whether by agreement to purchase any obligations, stock,
assets, goods or services, or to supply or advance any funds, assets, goods
or services, or otherwise) with respect to, any undertaking of any other
Person, except for the endorsement, in the ordinary course of collection, of
instruments payable to it or its order, except any guaranty in favor of
Agent, for the benefit of itself and Lenders, except for any guaranty of the
Senior Notes (in the form attached to the Senior Loan Documents) executed by
any Restricted Subsidiary and except for guaranties by Borrower or any
Subsidiary of utility bills and charges of newly organized Subsidiaries in
an aggregate amount not in excess of $50,000.
5.18 Investments. Not, and not permit any Subsidiary to,
make or permit to exist any Investment in any Person, except for: (a)
advances to employees of Borrower or any of the Subsidiaries for travel or
other ordinary business expenses provided that the aggregate amount
outstanding at any one time shall not exceed $25,000 for any single employee
and $75,000 in the aggregate for all employees; (b) extensions of credit in
the nature of Accounts Receivable or notes receivable arising from the sale
of goods and services in the ordinary course of business; (c) shares of
stock, obligations or other securities received in settlement of claims
arising in the ordinary course of business; (d) other Investments
outstanding on the date hereof and listed on Schedule 5.18; (e) other
Investments not in excess of $50,000 in the aggregate for Borrower and the
Subsidiaries; (f) Investments made in the form of loans by Borrower to the
Borrowing Subsidiary, including without limitation the Intercompany Loans;
(g) Investments in the form of capital contributions by Borrower in new and
existing Subsidiaries with funds not constituting proceeds of the Revolving
Loans or the Collateral (other than proceeds of the Collateral located in a
cash collateral account and available to Borrower under the terms of Section
2.10(b)(ii); (h) Investments resulting from Acquisitions complying with the
provisions of clause (d) of Section 5.12; (i) Investments in Unrestricted
Subsidiaries to the extent permitted in the Senior Note Indenture; (j)
Investments consisting of bank accounts permitted under this Agreement; and
(k) other Investments consented to by Requisite Lenders in writing.
5.19 Subsidiaries. Except as provided in Section 5.12, not,
and not permit any Subsidiary to, acquire any stock or similar interest in
any Person, and not create, establish or acquire any Subsidiaries; not
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designate any Restricted Subsidiary to be an "Unrestricted Subsidiary" (as
defined in the Senior Loan Documents) or designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; and not designate any new
Subsidiary as an Unrestricted Subsidiary unless such designation complies
with the applicable terms of the Senior Note Indenture and unless Agent
receives concurrent notice of such designation.
5.20 Intentionally Omitted.
5.21 Change in Accounts Receivable. After the occurrence of
an Event of Default, not permit or agree to, or permit any Subsidiary to
permit or agree to, any extension, compromise or settlement or make any
change or modification of any kind or nature with respect to any Account
Receivable, including any of the terms relating thereto.
5.22 Environmental Issues. Provide such information and
certifications which Agent may reasonably request from time to time
pertaining to the environmental aspects of Borrower and the Subsidiaries and
any property owned, operated or controlled by Borrower or any Subsidiary.
In order to investigate environmental aspects of Borrower and the
Subsidiaries and their properties, facilities and operations, Agent and its
agents shall have the right at any time that Agent shall have determined
that an environmental condition affecting any Real Property would be
reasonably likely to have a monetary impact of $2,000,000 or more upon
Borrower or a Subsidiary, upon reasonable notice to enter upon the property
of Borrower or any Subsidiary, take samples, review the books, records or
other documents of Borrower and the Subsidiaries, interview officers and
employees of Borrower or the Subsidiaries, and conduct such other activities
as Agent, in its sole discretion, deems appropriate. Borrower shall, and
shall cause the Subsidiaries to, cooperate fully in the conduct of any such
audit. Borrower shall pay upon demand all costs and expenses (including
Attorney's Fees) connected with such audit. Agent, may, in its discretion,
provide for the payment of any amount due from Borrower under this Section
5.22 by making Borrower a Revolving Loan. Nothing in this Section 5.22, and
no actions taken by Agent or any Lender pursuant thereto, shall give, or be
construed as controlling, or giving to Agent or any Lender the right or
obligation to direct or control, the conduct or action or inaction of
Borrower or any Subsidiary with respect to any environmental matters,
including but not limited to those pertaining to compliance with any
Environmental Laws. Agent agrees to share with Borrower the results of any
such audit conducted by a third party.
5.23 Related Agreements. Not enter into, or permit any
Subsidiary to enter into, any agreement containing any provision which would
be violated or breached by the performance by Borrower or such Subsidiary of
its obligations hereunder or under any Related Agreement or any instrument
or document delivered or to be delivered by Borrower or such Subsidiary in
connection herewith.
5.24 Unconditional Purchase Options. Not enter into or be a
party to, or permit any Subsidiary to enter into or be a party to any
contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services.
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5.25 Use of Proceeds. Not use or permit any proceeds of the
Loans or Letters of Credit to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying" any Margin Stock, and furnish to Agent upon request, a statement
in conformity with the requirements of Federal Reserve Form U-l referred to
in Regulation U of the Board of Governors of the Federal Reserve System.
5.26 Transactions with Related Parties. Not, and not permit
any Subsidiary to, (a) pay any management, consulting or similar fees to any
Related Party, whether for services rendered to Borrower or any Subsidiary,
or otherwise or (b) enter into or be a party to any other transaction or
arrangement, including without limitation the purchase, sale, lease or
exchange of property or the rendering of any service, with any Related
Party, except in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Borrower or such Subsidiary than would
obtain in a comparable arm's-length transaction with a Person not a Related
Party.
5.27 Amendment of Documents. Not amend, modify or alter, or
permit to be amended, modified or altered, (a) any Senior Loan Document
(other than an amendment permitted by section 8.1(a), (b), (c) or (f) of the
Senior Note Indenture), or (b) any Subordinated Debt Document (other than an
amendment permitted by section 11.01(a) or (d) of the 2007 Indenture or that
has the purpose of curing any ambiguity or correcting or supplementing any
provision contained in the 2007 Indenture which may be defective or
inconsistent with any other provision contained in the 2007 Indenture), or
(c) any agreement, instrument or document evidencing any of the Indebtedness
listed on Schedule 5.15.
6. DEFAULT.
6.1 Event of Default. Each of the following shall
constitute an Event of Default under this Agreement:
(a) Non-Payment. Default in the payment, when due or
declared due, of any of the Liabilities.
(b) Non-Payment of Other Indebtedness. Default in the
payment when due, whether by acceleration or otherwise (subject to any
applicable grace period), of any Indebtedness of, or guaranteed by,
Borrower, any other Obligor or any Subsidiary with a principal balance in
excess of $1,000,000 (other than (i) any Indebtedness under this Agreement
and any Notes or (ii) any Indebtedness of any Subsidiary to Borrower or to
any other Subsidiary), including without limitation the Senior Loans and the
Subordinated Debt.
(c) Acceleration of Other Indebtedness. Any event or
condition shall occur which results in the acceleration of the maturity of
any Indebtedness of, or guaranteed by, Borrower, any other Obligor or any
Subsidiary with a principal balance in excess of $1,000,000 (other than (i)
any Indebtedness of any Subsidiary to Borrower or to any other Subsidiary
and (ii) the Indebtedness under this Agreement and any Notes), including
without limitation the Senior Loans and the Subordinated Debt, or enables
the holder or holders of such other Indebtedness or any trustee or agent for
such holders to accelerate the maturity of such other Indebtedness.
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(d) Other Obligations. Default in the performance or
observance (subject to any applicable grace period or waiver of such
default) of (i) any obligation or agreement of Borrower, any other Obligor
or any Subsidiary to or with Agent or any Lender (other than any obligation
or agreement of Borrower hereunder and under any Notes) or (ii) any
obligation or agreement of Borrower, any other Obligor or any Subsidiary to
or with any other Person (other than (x) any such obligation or agreement
constituting or related to Indebtedness, (y) Trade Accounts Payable or (z)
any obligation or agreement of any Subsidiary to Borrower or to any other
Subsidiary), in any case, if such default would be reasonably likely to have
a Material Adverse Effect, except only to the extent that the existence of
any such default is being contested by Borrower, such other Obligor or such
Subsidiary, as the case may be, in good faith and by appropriate proceedings
and Borrower, such other Obligor or such Subsidiary, as applicable, shall
have set aside on its books such reserves or other appropriate provisions
therefor as may be required by GAAP.
(e) Bankruptcy. Borrower, any other Obligor or any
Subsidiary applies for, consents to, or acquiesces in the appointment of a
trustee, receiver or other custodian for Borrower, such other Obligor or
such Subsidiary, or for a substantial part of the property of Borrower, such
other Obligor or such Subsidiary, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for
Borrower, any other Obligor or any Subsidiary, or for a substantial part of
the property of Borrower, any other Obligor or any Subsidiary and is not
discharged or dismissed within sixty (60) days; or any bankruptcy,
reorganization, debt arrangement or other proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation proceeding, is instituted
by or against Borrower, any other Obligor or any Subsidiary; or any warrant
of attachment or similar legal process is issued against any substantial
part of the property of Borrower, any other Obligor or any Subsidiary.
Notwithstanding the foregoing, none of the foregoing events that occurs with
respect to a Subsidiary shall constitute an Event of Default, unless such
event would be reasonably likely to have a Material Adverse Effect.
(f) Insolvency. Borrower, any other Obligor or any
Subsidiary becomes insolvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they mature. Notwithstanding the
foregoing, none of the foregoing events that occurs with respect to a
Subsidiary shall constitute an Event of Default, unless such event would be
reasonably likely to have a Material Adverse Effect.
(g) ERISA Liabilities. Any of the following events shall
have occurred, if such event is reasonably likely to have a Material Adverse
Effect: (i) the existence of a Reportable Event, (ii) the withdrawal of
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (iii) the occurrence of an obligation to provide affected parties
with a written notice of intent to terminate a Pension Plan in a distress
termination under Section 4041 of ERISA, (iv) the institution by PBGC of
proceedings to terminate any Pension Plan, (v) any event or condition that
would require the appointment of a trustee to administer a Pension Plan,
(vi) the withdrawal of Borrower or any ERISA Affiliate from a Multiemployer
Plan, and (vii) any event that would give rise to a Lien under Section
302(f) of ERISA.
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(h) Non-Compliance With This Agreement. Default in the
performance of any of Borrower's agreements set forth in Section 3.2, 3.3,
5.5, 5.6, 5.12 through 5.19, 5.22 through 5.27 or in Section 6 of Supplement
A hereto (and not constituting an Event of Default under any of the other
subsections of this Section 6.1) and continuance of such default for ten
(10) days after the occurrence thereof; or default in the performance of any
of Borrower's agreements set forth in Section 5.1.1, 5.1.2, 5.1.3, 5.1.4 or
5.2 (and not constituting an Event of Default under any of the other
subsections of this Section 6.1), and continuance of such default for five
(5) days after the occurrence thereof; or default in the performance of any
of Borrower's other agreements herein set forth (and not constituting an
Event of Default under any of the other subsections of this Section 6.1),
and continuance of such default for thirty (30) days after notice thereof to
Borrower by Agent.
(i) Non-Compliance With Related Agreements. Default in the
performance by Borrower, any other Obligor or any Subsidiary of any of its
agreements set forth in any Related Agreement (and not constituting an Event
of Default under any of the other subsections of this Section 6.1), and
continuance of such default after notice from Agent and the expiration of
the grace or cure period (if any) set forth therein.
(j) Representations and Warranties. Any representation or
warranty made by Borrower or any other Obligor herein (including without
limitation any representation or warranty contained in Section 3.2 or 3.3)
or in any Related Agreement is untrue or misleading in any material respect
when made or deemed made; or any schedule, statement, report, notice,
certificate or other writing furnished by Borrower or any other Obligor to
Agent or any Lender is untrue or misleading in any material respect on the
date as of which the facts set forth therein are stated or certified; or any
certification made or deemed made by Borrower or any other Obligor to Agent
or any Lender is untrue or misleading in any material respect on or as of
the date made or deemed made.
(k) Litigation. There shall be entered against any one of
Borrower, any other Obligor or any Subsidiary one or more judgments or
decrees in excess of $2,000,000 in the aggregate at any one time
outstanding, excluding those judgments or decrees (i) that shall have been
outstanding less than thirty (30) calendar days from the entry thereof, (ii)
for and to the extent which Borrower, such Obligor or such Subsidiary, as
applicable, is insured and with respect to which the insurer has assumed
responsibility in writing or for and to the extent which Borrower, such
Obligor or such Subsidiary, as applicable, is otherwise indemnified if the
terms of such indemnification are satisfactory to Agent or (iii) which have
been stayed pending appeal and with respect to which Borrower, such Obligor
or such Subsidiary has posted any required bond or letter of credit.
(l) Termination of Obligations. If any Obligor shall
terminate any of its obligations to Agent or any Lender in respect of the
Liabilities.
(m) Validity. If the validity or enforceability of this
Agreement or any Related Agreement shall be challenged by Borrower or any
other Obligor, or if this Agreement or any Related Agreement shall fail to
remain in full force and effect.
(n) Conduct of Business. If Borrower, any other Obligor or
any Subsidiary is enjoined, restrained or in any way prevented by court
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order, which has not been dissolved or stayed within five (5) Banking Days,
from conducting all or any material part of its business affairs and such
event might have a Material Adverse Effect.
(o) Change of Control. If Paul S. Lindsey, Jr., members of
his immediate family, and the other Persons who are officers of Borrower on
the Closing Date, cease to retain among them record and beneficial ownership
of not less than a majority of the outstanding voting stock of Borrower on a
fully diluted basis; or if any "Change of Control" (as defined in the Senior
Loan Documents) occurs which results in an obligation of Borrower to
commence a "Change of Control Offer" pursuant to the terms of the Senior
Loan Documents.
(p) Material Adverse Change. Agent shall have determined in
good faith that a Material Adverse Change has occurred.
6.2 Effect of Event of Default; Remedies.
(a) In the event that one or more Events of Default
described in Section 6.1(e) shall occur, then each Lender's commitment and
the Credit extended under this Agreement shall terminate and all Liabilities
hereunder and under any Notes shall be immediately due and payable without
demand, notice or declaration of any kind whatsoever.
(b) In the event an Event of Default other than one
described in Section 6.1(e) shall occur, at the option of Agent or Requisite
Lenders, each Lender's commitment shall terminate and all Liabilities
hereunder and under any Notes shall immediately be due and payable without
demand or notice of any kind whatsoever, whereupon the Credit extended under
this Agreement shall terminate. Agent shall promptly advise Borrower of any
such declaration.
(c) In the event of the occurrence of any Event of Default,
Agent may exercise any one or more or all of the following remedies, all of
which are cumulative and non-exclusive:
(i) Any remedy contained in this Agreement or in any of the
Related Agreements or any Supplemental Documentation;
(ii) Any rights and remedies available to Agent or any Lender
under the UCC, and any other applicable law;
(iii) To the extent permitted by applicable law, Agent may,
without notice, demand or legal process of any kind, take
possession of any or all of the Collateral (in addition to
Collateral which it may already have in its possession), wherever
it may be found, and for that purpose may pursue the same
wherever it may be found, and may enter into any premises where
any of the Collateral may be or is supposed to be, and search
for, take possession of, remove, keep and store any of the Colla-
teral until the same shall be sold or otherwise disposed of, and
Agent shall have the right to store the same in any of Borrower's
premises without cost to Agent;
(iv) At Agent's request, Borrower will, at Borrower's
expense, assemble the Collateral and make it available to Agent
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at a place or places to be designated by Agent which is
reasonably convenient to Agent and Borrower; and
(v) Agent at its option, and pursuant to notification given
to Borrower as provided for below, may sell any Collateral
actually or constructively in its possession at public or private
sale and apply the proceeds thereof as provided below.
7. ADDITIONAL PROVISIONS REGARDING COLLATERAL AND AGENT'S RIGHTS.
7.1 Notice of Disposition of Collateral. Any notification
of intended disposition of any of the Collateral required by law shall be
deemed reasonably and properly given if given at least five (5) calendar
days before such disposition.
7.2 Application of Proceeds of Collateral. Any proceeds of
any disposition by Agent of any of the Collateral may be applied by Agent to
the payment of expenses in connection with the taking possession of,
storing, preparing for sale, and disposition of Collateral, including
Attorneys' Fees and legal expenses, and any balance of such proceeds may be
applied by Agent toward the payment of such of the Liabilities, and in such
order of application, as Agent may from time to time elect.
7.3 Care of Collateral. Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral
in its possession if it takes such action for that purpose as Borrower
requests in writing, but failure of Agent to comply with such request shall
not, of itself, be deemed a failure to exercise reasonable care, and no
failure of Agent to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by Borrower, shall be
deemed a failure to exercise reasonable care in the custody or preservation
of such Collateral.
7.4 Performance of Borrower's Obligations. Agent shall have
the right, but shall not be obligated, to discharge any claims or Liens
against, and any Taxes at any time levied or placed upon any or all
Collateral, including without limitation those arising under statute or in
favor of landlords, taxing authorities, government, public and/or private
warehousemen, common and/or private carriers, processors, finishers,
draymen, coopers, dryers, mechanics, artisans, laborers, attorneys, courts,
or others. Agent may also pay for maintenance and preservation of
Collateral. Agent may, but is not obligated to, perform or fulfill any of
Borrower's responsibilities under this Agreement which Borrower has failed
to perform or fulfill. Agent may advance to Borrower as a Revolving Loan
any payment made or expense incurred under this Section 7.4.
7.5 Agent's Rights. None of the following shall affect the
obligations of Borrower or any Subsidiary to Agent or any Lender under this
Agreement or Agent's right with respect to the remaining Collateral (any or
all of which actions may be taken by Agent at any time, whether before or
after an Event of Default, at its sole and absolute discretion and without
notice to Borrower):
(a) acceptance or retention by Agent or any Lender of other
property or interests in property as security for the
Liabilities, or acceptance or retention of any Obligor(s), in
addition to Borrower, with respect to any of the Liabilities;
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(b) release of its Lien on, or surrender or release of, or
the substitution or exchange of or for, all or any part of the
Collateral or any other property securing any of the Liabilities
(including but not limited to any property of any Obligor other
than Borrower), or any extension or renewal for one or more
periods (whether or not longer than the original period), or
release, compromise, alteration or exchange, of any obligations
of any guarantor or other Obligor with respect to any Collateral
or any such property;
(c) extension or renewal for one or more periods (whether or
not longer than the original period), or release, compromise,
alteration or exchange of any of the Liabilities, or release or
compromise of any obligation of any Obligor with respect to any
of the liabilities; or
(d) failure by Agent or any Lender to resort to other
security or pursue any Person liable for any of the Liabilities
before resorting to the Collateral.
8. CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER MATTERS.
8.1 Conditions Precedent to Initial Loans and Letters of
Credit. The obligation of each Lender that is a party to this Agreement on
the date hereof to make the initial Loans and for Issuing Bank to issue the
initial Letters of Credit is subject to satisfaction of the following
conditions precedent (in addition to those provided in Section 8.2):
8.1.1 Legal Audit. Each Lender's counsel shall have completed
its legal due diligence relating to Borrower, each Subsidiary, and each
other Obligor, the results of which shall provide such Lender with results
and information which, in such Lender's sole determination, are satisfactory
to permit such Lender to enter into the secured financing transaction
described in this Agreement and the Related Agreements. Such due diligence
examination may include but need not be limited to an analysis of all of
Borrower's, each Subsidiary's, and each other Obligor's business operations,
affairs, conditions, assets, liabilities and commitments (including without
limitation analysis of contingent liabilities, environmental and health and
safety matters, material contracts, labor matters, union contracts, employee
benefit plans, pending or threatened litigation and tax matters).
8.1.2 Liens. The Liens on the Collateral granted under this
Agreement and the Related Agreements and all other Liens granted to Agent,
for the benefit of itself and Lenders, to secure the Liabilities, shall be
senior, perfected Liens, except for the Liens disclosed on Schedule 4.9
which are designated as senior to the Liens of Agent, and except as
otherwise agreed by Agent and Lenders, and all financing statements and
other documents relating to Collateral shall have been filed or recorded, as
appropriate.
8.1.3 Transactions. (i) Borrower shall have issued the Units,
such Units and the Senior Loan Documents shall in all respects be
satisfactory to each Lender, the net proceeds of such Units, in an amount
not less than $95,000,000, shall have been received by Borrower and the
proceeds thereof shall have been used by Borrower in substantially the
manner described in the "Use of Proceeds" section of the effective
Registration Statement for the Units (the "Prospectus"), (ii) the Stock
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Repurchase shall have been consummated in accordance with the terms of the
applicable agreements and all applicable laws, (iii) Borrower shall have
acquired the assets of PSNC Propane Corporation, and (iv) the merger of
Empire Gas Operating Corporation and Borrower shall have been consummated,
all as described in the Prospectus and all pursuant to agreements,
instruments and documents in form and substance satisfactory to each Lender
(the transactions referred to in clauses (i), (ii), (iii) and (iv) are
hereinafter referred to as the "Transactions").
8.1.4 Solvency. Each Lender shall be satisfied that, after
giving effect to the Transactions, and the initial Loans and Letters of
Credit, Borrower, each Borrowing Subsidiary and each other Obligor shall
have assets (excluding goodwill and other intangible assets not capable of
valuation) having a value, both at present fair salable value and at fair
valuation, greater than the amount of such Person's liabilities (including
trade debt and Indebtedness to Agent and Lenders). Each Lender shall be
satisfied that all of the assets supporting the Loans and Letters of Credit
under this Agreement shall be sufficient in value to provide Borrower and
each Subsidiary with sufficient cash flow and working capital to enable it
to thereafter profitably operate its business and to meet its obligations as
they become due. Each Lender shall be satisfied that Borrower and each
Borrowing Subsidiary has adequate capital for the business in which it is
about to engage. Notwithstanding the foregoing, the failure of any
individual Borrowing Subsidiaries to meet the foregoing requirements shall
not constitute a failure to satisfy this Section 8.1.4 unless such failure
would be reasonably likely to have Material Adverse Effect. In connection
with the foregoing, each Lender shall have received such written appraisals,
balance sheets, solvency certificates or other materials as Agent shall
reasonably request.
8.1.5 Maximum Initial Loans. There shall be no Loans made on
the Closing Date in excess of $2,000,000.
8.1.6 Organization. Each Lender shall be satisfied with the
corporate, capital and legal structures of Borrower and the Subsidiaries,
and the terms of any agreements, documents or instruments relating thereto.
8.1.7 Effect of Law. No law or regulation affecting Agent's
or any Lender's entering into the secured financing transaction contemplated
by this Agreement shall impose upon Agent or such Lender any material
obligation, fee, liability, loss, penalty, cost, expense or damage.
8.1.8 Exhibits; Schedules. All Exhibits and Schedules to this
Agreement shall have been completed and submitted to each Lender, shall be
in form and substance satisfactory to such Lender and shall contain no facts
or information which such Lender, in its sole judgment, determines to be
unacceptable.
8.1.9 Licenses, Permits and Consents. All licenses, permits,
consents, judicial and regulatory approvals and corporate action necessary
to consummate the Transactions and the making of the initial Loans and the
issuance of the initial Letters of Credit shall have been obtained on terms
acceptable to each Lender.
8.1.10 Fees. If not funded with the proceeds of the initial
Loans, Agent shall have received the closing fee referred to in Section 2.14
and any other fees due and payable by Borrower or any other Person on the
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funding of the initial Loans and the issuance of the initial Letters of
Credit.
8.1.11 Title to Assets. Borrower and its Subsidiaries shall
have good, indefeasible and merchantable title to the Collateral, free and
clear of all Liens, except as otherwise permitted in Section 5.16 hereof.
8.1.12 Material Adverse Change; Litigation. No Material
Adverse Change, as reasonably determined by each Lender, shall have occurred
from March 31, 1994 through the Closing Date and the issuance of the initial
Letters of Credit and no Material Adverse Change, as reasonably determined
by such Lender, shall have occurred in the facts and information disclosed
to such Lender or otherwise relied upon by such Lender in making its
decision to enter into this Agreement. In addition, there shall not have
been instituted or threatened any litigation or proceedings in any court or
administrative forum affecting or threatening to affect the consummation of
the Transactions or which would have a Material Adverse Effect, in each case
as reasonably determined by each Lender.
8.1.13 Documents. In addition to this Agreement, each Lender
shall have received all of the following, each duly executed where
appropriate and dated as of the Closing Date (or such other date as shall be
satisfactory to Agent), in form, and containing terms and provisions,
acceptable to such Lender:
(a) Resolutions. A copy, duly certified by the secretary or
an assistant secretary of Borrower of (i) resolutions of the
Board of Directors of Borrower authorizing (A) the borrowings by
Borrower hereunder, (B) the execution, delivery and performance
by Borrower of this Agreement and each Related Agreement to which
Borrower is a party or by which it is bound, and (C) certain
officers or employees of Borrower to request borrowings by
telephone and to execute Borrowing Base Certificates, and the
consent of the shareholders of Borrower thereto, (ii) all
documents evidencing any other necessary corporate action with
respect to this Agreement and the Related Agreements, (iii) all
approvals or consents, if any, with respect to this Agreement and
the Related Agreements, (iv) a list of the names of all officers
and directors of Borrower, together with the true signatures of
such officers, and specifying those authorized to sign this
Agreement and the Related Agreements, (v) the by-laws of
Borrower, (vi) the Certificate of Incorporation of Borrower and
(vii) a list of all shareholders of Borrower and the number of
shares of Borrower's stock owned by each; and similar certifi-
cates executed by the secretary or assistant secretary of each
Borrowing Subsidiary or other Obligor;
(b) Borrower's Closing Certificate. The certificate of the
President or Chairman of the Board of Borrower certifying to the
fulfillment of all conditions precedent to closing and funding
the secured financing transaction contemplated by this Agreement
(other than those conditions solely under the control of Agent
and Lenders), to the truth and accuracy, as of such date, of the
representations and warranties of Borrower contained in this
Agreement and each Related Agreement to which Borrower is a party
or by which it is bound and to the absence of any defaults under
any such agreements;
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(c) Certificates and Articles of Incorporation. A copy,
duly certified by the Secretary of State of Missouri, of
Borrower's Certificate of Incorporation; and a copy, duly
certified by the Secretary of State of the applicable state, of
each Borrowing Subsidiary's and other Obligor's Articles or
Certificates of Incorporation, as applicable;
(d) Good Standing. A copy, duly certified by the applicable
Secretary of State of (i) a certificate of good standing issued
by the Secretary of the State of each state where Borrower, any
Borrowing Subsidiary or any other Obligor is incorporated or
organized and (ii) in any state in which Borrower, any Borrowing
Subsidiary or any other Obligor is doing business under an
assumed name, a certificate or other document issued by the
Secretary of State of each such state evidencing Borrower's, any
Borrowing Subsidiary's or any other Obligor's authority to use
such name;
(e) Legal Opinion. Legal opinion from Wilmer, Cutler &
Pickering, counsel for Borrower and the Subsidiaries;
(f) Insurance. Evidence satisfactory to Agent of the
existence of insurance on the Collateral and business of Borrower
and each Subsidiary, in amounts and with insurers acceptable to
Agent, together with evidence establishing that Agent, for the
benefit of itself and Lenders, is named as the sole loss payee
with respect to property and casualty insurance covering the
Collateral, and additional insured with respect to liability
insurance;
(g) Authorization to Pay Proceeds. Written authorization
and instructions from Borrower, in form satisfactory to Agent,
for disbursement of the proceeds of the initial Loans and
issuance and delivery of the initial Letters of Credit;
(h) Intercompany Loans. The agreements, instruments and
documents governing the Intercompany Loans shall have been
executed and delivered by Borrower and the Subsidiaries, such
agreements, instruments and documents shall be in form and
substance satisfactory to each Lender, and the liens and security
interests granted to secure such indebtedness shall have been
properly perfected;
(i) Other Related Agreements. Notes in the aggregate amount
of $15,000,000 with respect to the Revolving Loans executed by
Borrower; and a Solvency Certificate executed by Borrower;
(j) Borrowing Subsidiary Guaranty. Each Borrowing
Subsidiary shall have entered into a guaranty in favor of Agent,
for the benefit of itself and Lenders, pursuant to which such
Borrowing Subsidiary shall have unconditionally guaranteed the
Liabilities;
(k) Borrowing Subsidiary Security Agreement. Each Borrowing
Subsidiary shall have entered into a security agreement with
Agent, for the benefit of itself and Lenders, pursuant to which
such Borrowing Subsidiary shall have granted to Agent, for the
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benefit of itself and Lenders, a security interest in the
accounts receivable, inventory, and certain other assets of such
Borrowing Subsidiary as collateral for the guaranty described in
clause (j) above; and
(l) Other Documents. Such other documents as Lenders shall
determine, in their sole discretion, to be necessary or
desirable.
8.1.14 Default. No Event of Default or Unmatured Event of
Default shall have occurred and be continuing or would be caused thereby.
8.2 Continuing Conditions Precedent to all Loans;
Certification. The obligation of each Lender to make the initial Loans and
each subsequent Loan and to establish any LIBOR Rate Loans, and for Issuing
Bank to issue the initial Letters of Credit and each subsequent Letter of
Credit, is subject to satisfaction of the following conditions precedent in
addition to those provided in Section 8.1:
(a) No Change in Condition. No change in the condition or
operations, financial or otherwise, of Borrower, any Subsidiary
or any other Obligor, shall have occurred which change, in the
reasonable credit judgment of Requisite Lenders, is reasonably
likely to have a Material Adverse Effect;
(b) Default. Before and after giving effect to such Loan
and/or Letter of Credit, no Event of Default or Unmatured Event
of Default shall have occurred and be continuing;
(c) Insurance. There shall have been no material change, or
notice of prospective material change (whether such notice is
formal or informal), in the nature, extent, scope or cost of the
insurance policies of Borrower or any Subsidiary listed on
Schedule 4.7 which change would have a Material Adverse Effect,
or would significantly adversely affect Borrower's or any
Subsidiary's ability to perform its obligations under this
Agreement, any Note(s), or any Related Agreement to which it is a
party or by which it is bound;
(d) Representations and Warranties. Before and after giving
effect to such Loan and/or Letter of Credit, the representations
and warranties in Section 4 shall be true and correct as though
made on the date of such Loan and/or Letter of Credit, except for
those representations and warranties which are expressly made as
of the date hereof, except for such changes as are specifically
permitted hereunder, and except for the representation and
warranty contained in Section 4.26 with regard to the
truthfulness and correctness of all representations and
warranties contained in any agreement evidencing any of the
Transactions (which representations and warranties are only being
made as of the date specified in the relevant agreement) other
than those, if any, contained in the Senior Loan Documents; and
(e) Accounting Methods. Borrower shall not have made any
material (as determined by Agent) change in its accounting
methods or principles except as required by GAAP.
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Each request for a Loan or a Letter of Credit hereunder made or deemed to
have been made by Borrower shall be deemed to be a certificate of Borrower
as to the matters set out in the foregoing provisions of this Section 8.2.
9. INDEMNITY.
9.1 Environmental and Safety and Health Indemnity. Borrower
hereby indemnifies Agent and each Lender and agrees to hold Agent and each
Lender harmless from and against any and all losses, liabilities, damages,
injuries, costs, expenses and claims of any and every kind whatsoever
(including without limitation court costs and Attorneys' Fees) which at any
time or from time to time may be paid, incurred or suffered by, or asserted
against, Agent or any Lender for, with respect to, or as a direct or
indirect result of the violation by Borrower or any of the Subsidiaries of
any Environmental Law or Occupational Safety and Health Law, or with respect
to, or as a direct or indirect result of (a) the presence on or under, or
the Release from, properties utilized by Borrower and/or any Subsidiary in
the conduct of its business into or upon any land, the atmosphere, or any
watercourse, body of water or wetland, of any Hazardous Material or the
escape, seepage, leakage, spillage, disposal, discharge, emission or release
of any other hazardous or toxic waste, substance or constituent, or other
substance (including without limitation any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any Environ-
mental Law) or (b) the existence of any unsafe or unhealthful condition on
or at any premises utilized by Borrower and/or any Subsidiary in the conduct
of its business, in either case, except for any such amounts owing as a
direct result of the gross negligence or willful misconduct of Agent or any
Lender. The provisions of and undertakings and indemnification set out in
this Section 9.1 shall survive satisfaction and payment of the Liabilities
and termination of this Agreement.
9.2 General Indemnity. In addition to the payment of
expenses pursuant to Section 12.3, whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to indemnify, pay
and hold Agent and each Lender, and the officers, directors, employees,
agents, and affiliates of each of Agent and each Lender (collectively, the
"Indemnitees") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of
counsel for any of such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or
not any of such Indemnitees shall be designated a party thereto) that may be
imposed on, incurred by, or asserted against any Indemnitee, in any manner
relating to or arising out of this Agreement or any Related Agreement, the
statements contained in any commitment letter delivered by Agent or any
Lender, Agent's or any Lender's agreement to make the Loans or to issue
Letters of Credit hereunder, the use or intended use of any Letters of
Credit, or the use or intended use of the proceeds of any of the Loans
hereunder (the "indemnified liabilities"); provided that Borrower shall have
no obligation to an Indemnitee hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of such
Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall contribute the maximum
portion that it is permitted to pay under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or
any of them. The provisions of the undertakings and indemnification set out
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in this Section 9.2 shall survive satisfaction and payment of the
Liabilities and termination of this Agreement.
9.3 Capital Adequacy. If Agent or any Lender shall
reasonably determine that the application or adoption of any law, rule,
regulation, directive, interpretation, treaty or guideline regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof, whether or not having the force or law (including without
limitation application of changes to Regulation H and Regulation Y of the
Federal Reserve Board issued by the Federal Reserve Board on January 19,
1989 and regulations of the Comptroller of the Currency, Department of the
Treasury, 12 CFR Part 3, Appendix A, issued by the Comptroller of the
Currency on January 27, 1989) increases the amount of capital required or
expected to be maintained by Agent or such Lender or any Person controlling
Agent or such Lender in excess of any such increases affecting Agent or such
Lender as of the date hereof, and such increase is based upon the existence
of Agent's or such Lender's obligations hereunder and other commitments of
this type, then from time to time, within ten (10) days after demand from
Agent or such Lender, Borrower shall pay to Agent or such Lender, as
applicable, such amount or amounts as will compensate Agent or such Lender
or such controlling Person, as the case may be, for such increased capital
requirement. The determination of any amount to be paid by Borrower under
this Section 9.3 shall take into consideration the policies of Agent or such
Lender or any Person controlling Agent or such Lender with respect to
capital adequacy and shall be based upon any reasonable averaging,
attribution and allocation methods. A certificate of Agent or such Lender,
as applicable, setting forth the amount or amounts as shall be necessary to
compensate Agent or such Lender as specified in this Section 9.3 shall be
delivered to Borrower and shall be conclusive in the absence of manifest
error.
10. AGENT.
10.1 Appointment of Agent. Each Lender hereby irrevocably
appoints and authorizes Continental to act as its Agent under this Agreement
and the Related Agreements. Each Lender hereby irrevocably appoints and
authorizes Agent to take such action on such Lender's behalf under the
provisions of this Agreement and the Related Agreements and to exercise such
powers and perform such duties under this Agreement and the Related
Agreements as are specifically delegated to Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental hereto
and thereto. Agent may perform any of its duties hereunder or under the
Related Agreements by or through its agents or employees. The provisions of
this Section 10 are solely for the benefit of Agent and Lenders, and neither
Borrower nor any Obligor 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 Related Agreements, Agent shall act solely as
agent of Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for
Borrower or any Obligor.
10.2 Nature of Duties of Agent. Agent shall have no duties,
obligations or responsibilities except those expressly set forth in this
Agreement and the Related Agreements. Neither Agent nor any of its
officers, directors, employees or agents shall be liable for any action
taken or omitted by it as such hereunder or under the Related Agreements or
in connection herewith or therewith, unless caused by its or their gross
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negligence or willful misconduct. The duties of Agent shall be mechanical
and administrative in nature; Agent shall not have by reason of this
Agreement or the Related Agreements a fiduciary relationship in respect of
any Lender; and nothing in this Agreement or the Related Agreements,
expressed or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of this Agreement or the Related
Agreements except as expressly set forth herein or therein. No duty to act,
or refrain from acting, and no other obligation whatsoever, shall be implied
on the basis of or imputed in respect of any right, power or authority
granted to Agent or shall become effective in the event of any temporary or
partial exercise of such rights, power or authority.
10.3 Agent in its Capacity as Lender. With respect to its
obligation to lend under this Agreement and the Related Agreements, the
Loans made by it and its participation in Letters of Credit, Agent shall
have the same rights and powers under this Agreement and the Related
Agreements as any Lender and may exercise the same as though it were not
Agent, and the terms "Lender" or "Lenders" shall, unless the context
otherwise indicates, include Agent in its capacity as a Lender hereunder.
Agent, any Lender and their respective affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking or trust business
with Borrower, or Related Parties of Borrower, as if it were not Agent or as
if it or they were not a Lender hereunder and without any duty to account
therefor to the other parties to this Agreement; provided, that the
obligations of Borrower under such transactions shall not be deemed to be
Liabilities or secured by any Collateral without the prior written agreement
of the Requisite Lenders; provided, further that Lenders acknowledge and
agree that the obligations of Borrower to Continental or any other Lender as
Issuing Bank and with respect to any lockbox or bank account maintained by
or for the benefit of Borrower, including the Demand Deposit Account, the
Depository Accounts, and the Assignee Deposit Account, shall be deemed to be
Liabilities secured by the Collateral.
10.4 Independent Credit Analysis. Each Lender agrees that it
has, independently and without reliance upon Agent, any other Lender, or the
directors, officers, agents, attorneys or employees of Agent or of any other
Lender, and instead in reliance upon information supplied to it by or on
behalf of Borrower, made its own independent credit analysis and decision to
enter into this Agreement and the Related Agreements to which it is a party,
and that it shall independently and without reliance upon Agent, any other
Lender, or the directors, officers, agents, attorneys or employees of Agent
or of any other Lender, continue to make its own independent credit analysis
and decisions in acting or not acting under this Agreement and the Related
Agreements. Except as otherwise expressly provided herein, Agent shall not
have any duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information concerning the
affairs, financial condition, litigation, liabilities, or business of
Borrower or any other Obligor which may at any time come into the possession
of Agent (or any of its affiliates). In the event such information is
furnished to any Lender by Agent, Agent shall have no duty to confirm or
verify its accuracy or completeness and shall have no liability whatsoever
with respect thereto.
10.5 General Immunity. Neither Agent nor any of its
directors, officers, agents, attorneys or employees shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or the Related Agreements or in connection herewith or therewith
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except for its or their own willful misconduct or gross negligence. Without
limiting the generality of the foregoing, Agent: (i) shall not be
responsible to Lenders for any recitals, statements, warranties or
representations under this Agreement or the Related Agreements or any
agreement or document relative hereto or thereto or for the financial or
other condition of any Obligor, (ii) shall not be responsible for the
authenticity, accuracy, completeness, value, validity, effectiveness, due
execution, legality, genuineness, enforceability, collectibility or
sufficiency of this Agreement or the Related Agreements or any other
agreements or any assignments, certificates, requests, financial statements,
projections, notices, schedules or opinions of counsel executed and
delivered pursuant hereto or thereto, (iii) shall not be bound to ascertain
or inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the Related Agreements on the
part of Obligors or of any of the terms of any such agreement by any party
hereto or thereto and shall have no duty to inspect the property (including
the books and records) of any Obligor, (iv) shall have no obligation
whatsoever to Lenders or to any other Person to assure that the Collateral
exists or is owned by Borrower or another Obligor or is cared for, protected
or insured or that the Liens granted to Agent herein or in Related
Agreements or pursuant hereto or thereto have been properly or sufficiently
or lawfully created, perfected, protected, enforced, realized upon or are
entitled to any particular priority, and (v) shall incur no liability under
or in respect of this Agreement or the Related Agreements or any other
document by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telegram, cable, telex, telecopier or similar
form of facsimile transmission) believed by Agent to be genuine and signed
or sent by the proper party. Agent may consult with legal counsel
(including counsel for Borrower), independent public accountants and other
experts selected by Agent and shall not be liable for any action taken or
omitted to be taken in good faith in accordance with the advice of such
counsel, accountants or experts.
10.6 Action by Agent.
(a) Actual Knowledge. Agent may assume that no Event of
Default has occurred and is continuing, unless Agent has actual knowledge of
the Event of Default, has received notice from Borrower or Borrower's
independent certified public accountants stating the nature of the Event of
Default, or has received notice from a Lender stating the nature of the
Event of Default and that such Lender considers the Event of Default to have
occurred and to be continuing.
(b) Discretion to Act. Agent shall have the right to
request instructions from Requisite Lenders by notice to each Lender. If
Agent shall request instructions from Requisite Lenders with respect to any
act or action (including the failure to act) in connection with this
Agreement or any Related Agreement, Agent shall be entitled to refrain from
such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, and Agent shall not incur liability to
any Person by reason of so refraining. 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 Related
Agreement in accordance with the instructions of Requisite Lenders. Agent
may give any notice required under Section 6 hereof without the consent of
any of Lenders unless otherwise directed by Requisite Lenders in writing and
will, at the direction of Requisite Lenders, give any such notice required
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under Section 6. Except for any obligation expressly set forth in this
Agreement or the Related Agreements, Agent may, but shall not be required
to, exercise its discretion to act or not act, except that Agent shall be
required to act or not act upon the instructions of Requisite Lenders
(unless all of Lenders are required to provide such instructions as provided
in Section 12.6) and those instructions shall be binding upon Agent and all
Lenders; provided that Agent shall not be required to act or not act if to
do so would expose Agent to liability or would be contrary to this Agreement
or any Related Agreements or to applicable law.
10.7 Right to Indemnity. Agent shall be fully justified in
failing or refusing to take any action under this Agreement or the Related
Agreements or in relation hereto or thereto unless it shall first be
indemnified (upon requesting such indemnification) to its satisfaction by
Lenders against any and all liability and expense which it may incur by
reason of taking or continuing to take any such action. Lenders further
agree to indemnify Agent ratably in accordance with their Pro Rata Shares
for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Agent in any way relating to or arising out of this Agreement or the other
Related Agreements or the transactions contemplated hereby or thereby, or
the enforcement of any of the terms hereof or thereof or of any other
documents; provided no such liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement results from Agent's
gross negligence or willful misconduct. Each Lender agrees to reimburse
Agent in the amount of its Pro Rata Share of any out-of-pocket expenses for
which Agent is entitled to receive, but has not received, reimbursement
pursuant to this Agreement. The agreements in this Section 10.7 shall
survive the payment and fulfillment of the Liabilities and termination of
this Agreement.
10.8 Rights and Remedies to be Exercised by Agent Only. In
the event any remedy may be exercised with respect to this Agreement or the
Related Agreements or the Collateral, Agent shall pursue remedies designated
by Requisite Lenders subject to the proviso set forth in Section 10.6(b).
Each Lender agrees that no Lender shall have any right individually (a) to
realize upon the security created by this Agreement or the Related
Agreements, (b) enforce any provision of this Agreement or the Related
Agreements, or (c) make demand under this Agreement or the Related
Agreements; provided, that any Lender that is an Issuing Bank may make
demand upon Borrower as the Issuing Bank pursuant to Sections 2.2(b) and
2.2(c) and Continental may make demand upon Borrower pursuant to Section
12.4. Without limiting the foregoing, no Lender shall have any right
individually to take any action or provide any notice in connection with any
Subordinated Debt.
10.9 Agent's Resignation. Agent may resign at any time after
giving at least thirty (30) days' prior written notice of its intention to
do so to each Lender and to Borrower. Upon satisfaction of the foregoing
condition, Requisite Lenders shall have the right to appoint a successor
Agent (such appointment to be subject to the consent of Borrower (which
consent of Borrower shall not be unreasonably withheld or delayed);
provided, that Borrower's consent shall not be required if a Lender is
appointed Agent). If no successor Agent shall have been so appointed and
shall have accepted such appointment within twenty (20) days after Agent's
giving of such notice of resignation, then the resigning Agent may appoint a
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successor Agent. After any resigning Agent's resignation hereunder as
Agent, it shall be discharged from its duties and obligations under this
Agreement but the provisions of this Section 10 shall continue to bind Agent
and inure to Agent's benefit as to any actions taken or omitted to be taken
by it while it was Agent hereunder. Upon appointment of a successor Agent,
the term "Agent" shall for all purposes of this Agreement thereafter mean
such successor.
10.10 Disbursement of Proceeds of Loans and Other Advances.
Agent may (and is hereby irrevocably authorized by Lenders), but shall have
no duty to make such other disbursements and advances as Revolving Loans on
behalf of Lenders, including without limitation the making of advances for
the expenditures described in Section 7.4 of this Agreement, which Agent, in
its sole discretion, deems necessary or desirable to preserve or protect the
Collateral, or any portion thereof. Agent's use of its own checks upon its
funds or Agent's transfer of its own funds, by wire or otherwise, to an
account of Borrower or any other Obligor shall be deemed to be disbursements
made by each Lender under this Agreement and pursuant to the Related
Agreements.
10.11 Release of Collateral. Each Lender hereby irrevocably
authorizes Agent, at its option and in its discretion, to release any and
all guaranties of the Liabilities and any Lien granted to or held by Agent
upon any Collateral (i) upon termination of Lenders' obligations to make
Loans and payment and satisfaction of all Loans, Letter of Credit
reimbursement obligations and all other Payment Liabilities and which Agent
has been notified in writing are then due and payable; (ii)constituting
Collateral being sold or disposed of if Borrower certifies to Agent that the
sale or disposition is made in compliance with the terms of this Agreement
(and, absent any actual knowledge of Agent to the contrary, Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which Borrower or any other Obligor owned no
interest at the time the Lien was granted and at all times thereafter; or
(iv) if approved, authorized or ratified in writing by Agent at the
direction of all Lenders. Upon request by Agent at any time, each Lender
will confirm in writing Agent's authority to release particular types or
items of Collateral pursuant to this Section 10.11.
10.12 Agreement to Cooperate. Each Lender agrees to cooperate
to the end that the terms and provisions of this Agreement may be promptly
and fully carried out. Lenders also agree, from time to time, at the
request of Agent, to execute and deliver any and all other agreements,
documents or instruments and to take such other actions, all as may be
reasonably necessary or desirable to effectuate the terms, provisions and
intent of this Agreement and the Related Agreements.
10.13 Sharing of Collateral. If any Lender shall obtain any
payment (whether voluntary, involuntary, through exercise of any right of
set off, or otherwise) on account of the Liabilities in excess of the amount
to which it is entitled pursuant to this Agreement, such Lender shall
forthwith purchase from the other Lenders such participations in such other
Lenders' claims against Borrower as shall be necessary to cause such
purchasing Lender to share the excess payment with the other Lenders in
accordance with the provisions of this Agreement; provided, that if all or
any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from such other Lender shall be rescinded
and such other Lenders shall repay to the purchasing Lender the purchase
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price to the extent of their portion of such recovery together with an
amount equal to the share (according to the proportion of (i) the amount of
such other Lenders' required repayment, to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid
or payable by purchasing Lender in respect of the total amount recovered.
10.14 Lenders to Act as Agents. If any Collateral or proceeds
thereof at any time comes into the possession or under the control of any
Lender, such Lender shall hold such Collateral or proceeds thereof as agent
for the joint benefit of Lenders, and will, upon receipt therefor, deliver
such Collateral or proceeds thereof to Agent.
11. ADDITIONAL PROVISIONS.
Additional provisions are set forth in Supplement A.
12. GENERAL.
12.1 Borrower Waiver. Except as otherwise provided for in
this Agreement, Borrower waives (a) presentment, demand and protest and
notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, one or more extensions or renewals of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent or any Lender on which
Borrower may in any way be liable and hereby ratifies and confirms whatever
Agent or any Lender may do in this regard; (b) all rights to notice and a
hearing prior to Agent's or any Lender's taking possession or control of, or
Agent's or any Lender's replevy, attachment or levy on or of, the Collateral
or any bond or security which might be required by any court prior to
allowing Agent or any Lender to exercise any of Agent's or any Lender's
remedies; and (c) the benefit of all valuation, appraisement and exemption
laws. Borrower acknowledges that it has been advised by counsel of its
choice with respect to this Agreement and the transactions evidenced by this
Agreement.
12.2 Power of Attorney. Borrower appoints Agent, or any
Person whom Agent may from time to time designate, as Borrower's attorney
and agent-in-fact with power (which appointment and power, being coupled
with an interest, is irrevocable until all Payment Liabilities under this
Agreement are paid and performed in full and this Agreement is terminated),
without notice to Borrower, to:
(a) At such time or times hereafter as Agent or said agent,
in its sole and absolute discretion, may determine in Borrower's
or Agent's name (i) endorse Borrower's name on any checks, notes,
drafts or any other items of payment relating to and/or proceeds
of the Collateral which come into the possession of Agent or
under Agent's control and apply such payment or proceeds to the
Liabilities; (ii) endorse Borrower's name on any chattel paper,
document, instrument, invoice, freight bill, bill of lading or
similar document or agreement in Agent's possession relating to
Accounts Receivable, Inventory or any other Collateral; (iii)
after the occurrence of an Event of Default, use the information
recorded on or contained in any data processing equipment and
computer hardware and software to which Borrower has access
relating to Accounts Receivable, Inventory and/or other
Collateral; (iv) after the occurrence of an Event of Default, use
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Borrower's stationery and sign the name of Borrower to
verification of Accounts Receivable and notices thereof to
Account Debtors; and (v) if not done by Borrower, do all acts and
things determined by Agent to be necessary, to fulfill Borrower's
obligations under this Agreement; and
(b) At such time or times after the occurrence of an Event
of Default, as Agent or said agent, in its sole and absolute
discretion, may determine, in Borrower's or Agent's name: (i)
demand payment of the Accounts Receivable; (ii) enforce payment
of the Accounts Receivable, by legal proceedings or otherwise;
(iii) exercise all of Borrower's rights and remedies with respect
to the collection of the Accounts Receivable and other Colla-
teral; (iv) settle, adjust, compromise, extend or renew the
Accounts Receivable; (v) settle, adjust or compromise any legal
proceedings brought to collect the Accounts Receivable; (vi) if
permitted by applicable law, sell or assign the Accounts
Receivable and/or other Collateral upon such terms for such
amounts and at such time or times as Agent may deem advisable;
(vii) discharge and release the Accounts Receivable and/or other
Collateral; (viii) prepare, file and sign Borrower's name on any
proof of claim in bankruptcy or similar document against any
Account Debtor; (ix) prepare, file and sign Borrower's name on
any notice of lien, assignment or satisfaction of lien or similar
document in connection with the Accounts Receivable and/or other
Collateral; and (x) do all acts and things necessary, in Agent's
sole and absolute discretion, to obtain repayment of the Liabili-
ties and to fulfill Borrower's other obligations under this
Agreement.
12.3 Expenses; Attorneys' Fees. Borrower agrees, whether or
not any Loan is made or Letter of Credit is issued hereunder, to pay upon
demand all Attorneys' Fees and all other reasonable expenses incurred by
Agent at any time, including fees, costs and expenses incurred in connection
with Collateral field audits or other due diligence investigations by Agent
and all Attorneys' Fees and other reasonable expenses incurred by any Lender
after the occurrence of an Event of Default. For purposes of this
Agreement, "Attorneys' Fees" means the reasonable value of the services (and
costs, charges and expenses related thereto) of the attorneys (and all
paralegals and any outside consultants employed by such attorneys) employed
by Agent or any Lender (including but not limited to attorneys and
paralegals who are employees of Agent or any Lender) from time to time (a)
in connection with the negotiation, preparation, execution, delivery,
administration and enforcement of this Agreement, any Related Agreement, any
Supplemental Documentation and all other documents or instruments provided
for herein or in any thereof or delivered or to be delivered hereunder or
under any thereof or in connection herewith or with any thereof, (b) to
prepare documentation related to the Loans made and other Liabilities
incurred hereunder, (c) to prepare any amendment to or waiver under this
Agreement or any Related Agreement and any documents or instruments related
thereto, (d) to represent Agent or any Lender in any litigation, contest,
dispute, suit or proceeding or to commence, defend or intervene in any
litigation, contest, dispute, suit or proceeding or to file a petition,
complaint, answer, motion or other pleading, or to take any other action in
or with respect to, any litigation, contest, dispute, suit or proceeding
(whether instituted by Agent or any Lender, Borrower or any other Person and
whether in bankruptcy or otherwise) in any way or respect relating to the
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Collateral, this Agreement or any Related Agreement (other than any
litigation, contest, dispute, suit or proceedings involving a dispute
between Agent and any Lender or between any Lender and any other Lender), or
Borrower's or any other Obligor's or any Subsidiary's affairs, (e) to
protect, collect, lease, sell, take possession of, or liquidate any of the
Collateral, (f) to perfect or attempt to enforce any security interest in
any of the Collateral or to give any advice with respect to such enforcement
and (g) to enforce any of Agent's or any Lender's rights to collect any of
the Liabilities. Agent may advance all such amounts to Borrower as a
Revolving Loan. Borrower also agrees (y) to indemnify and hold Agent and
each Lender harmless from any loss or expense which may arise or be created
by the acceptance of telephonic or other instructions for making Loans or
issuing Letters of Credit and (z) to pay, and save Agent and each Lender
harmless from all liability for, any stamp or other taxes which may be
payable with respect to the execution or delivery of this Agreement, or any
Related Agreement or Supplemental Documentation, or the issuance of any Note
or of any other instruments or documents provided for herein or to be
delivered hereunder or in connection herewith. In addition to the
foregoing, "Attorneys' Fees" shall include Agent's fees and expenses of the
types described in the preceding sentence incurred in connection with the
syndication, participation and assignment of this Agreement, any Related
Agreement and any Supplemental Documentation. Borrower's foregoing
obligations shall survive any termination of this Agreement.
12.4 Continental's Fees and Charges. To the extent not
already covered by Section 12.3, Borrower agrees to pay Continental on
demand by Continental the customary fees and charges of Continental for
maintenance of accounts with Continental or for providing other services to
Borrower (including fees, costs, and expenses incurred in connection with
Collateral field audits or other due diligence investigations) and if not so
paid, each Lender shall, without regard to any other provision of this
Agreement or any other Related Agreement or any defense that Borrower may
have to its obligation to pay Continental in connection with such fees and
charges, pay Continental for such Lender's Pro Rata Share of such fees and
charges, and any payments so made by Lenders to Continental shall be deemed
to be Revolving Loans. Each Lender (other than Continental) acknowledges
and agrees that it shall not be entitled to any of the fees and charges of
Continental as provided in the immediately preceding sentence. Agent may,
in its sole and absolute discretion, provide for such payment by advancing
the amount thereof to Borrower as a Revolving Loan.
12.5 Lawful Interest. In no contingency or event whatsoever
shall the interest rate charged pursuant to the terms of this Agreement
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In
the event that such a court determines that any Lender has received interest
hereunder in excess of the highest applicable rate, such Lender shall
promptly refund its Pro Rata Share of such excess interest to Borrower.
12.6 No Waiver by Agent or any Lender; Amendments. No
failure or delay on the part of Agent or any Lender in the exercise of any
power or right, and no course of dealing between Borrower and Agent or any
Lender shall operate as a waiver of such power or right, nor shall any
single or partial exercise of any power or right preclude other or further
exercise thereof or the exercise of any other power or right. The remedies
provided for herein are cumulative and not exclusive of any remedies which
may be available to Agent or any Lender at law or in equity. No notice to
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or demand on Borrower not required hereunder shall in any event entitle
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Agent or any Lender to
any other or further action in any circumstances without notice or demand.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement or any Related Agreement shall in any event be
effective unless the same shall be in writing and signed and delivered by
Requisite Lenders. Notwithstanding the foregoing, any amendment, modifica-
tion, termination, waiver or consent with respect to any of the following
provisions of this Agreement shall be effective only by a written agreement,
signed by each Lender affected thereby: (a) increase in the amount of the
Maximum Loan Amount of such Lender, (b) reduction of the principal of, rate
or amount of interest on the Revolving Loans or any fees or charges
(including, without limitation, any Letter of Credit fees or charges)
payable to such Lender (other than by the payment or prepayment thereof),
(c) postponement of the date fixed for any payment of principal of, or
interest on, the Loans or any fees or charges) (including, without
limitation, any Letter of Credit fees or charges) or other amounts payable
to such Lender, (d) change in the aggregate Pro Rata Share of Lenders which
shall be required for Lenders or any of them to take action hereunder or
amend the definition of "Requisite Lenders," or (e) amendment of this
Section 12.6. Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver of any provision of this
Agreement, and any consent to any departure by Borrower from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which given.
12.7 Termination of Revolving Credit. The Termination Date
and each Lender's commitment to make Loans hereunder may be extended for
successive one (1)-year periods by written agreement among Borrower and each
Lender executed at least ninety (90) days prior to a scheduled Termination
Date. Borrower may terminate the Revolving Credit at any time upon notice
to Agent and payment in full of the outstanding principal balance of the
Loans and all other Payment Liabilities under this Agreement and the Related
Agreements, as provided in Section 2.1.2. All of Agent's and each Lender's
rights and remedies, the Liens of Agent on the Collateral, for the benefit
of itself and Lenders, and all of Borrower's duties and obligations under
this Agreement shall survive termination of the Credit extended to Borrower
hereunder until all of the Payment Liabilities hereunder have been finally
paid and performed in full. The termination or cancellation of the Credit
shall not affect or impair the liabilities and obligations of Borrower or
any one or more of the Obligors to Agent and Lenders or Agent's and each
Lender's rights with respect to any Loans and advances made and other
Liabilities incurred prior to such termination or with respect to the
Collateral. Upon termination of the Revolving Credit and repayment of the
Payment Liabilities, Agent will promptly release all of its Liens on the
Collateral and all guaranties of the Liabilities.
12.8 Notices. Except as otherwise expressly provided herein,
any notice hereunder to Borrower, Agent or any Lender shall be in writing
(including facsimile communication) and shall be given to Borrower, Agent or
such Lender at its address or facsimile number set forth on the signature
pages hereof or at such other address or facsimile number as Borrower, Agent
or such Lender may, by written notice, designate as its address or facsimile
number for purposes of notices hereunder. All such notices shall be deemed
to be given when transmitted by facsimile, delivered by courier, personally
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delivered or, in the case of notice by mail, three (3) Banking Days
following deposit in the United States mails, properly addressed as herein
provided, with proper postage prepaid; provided, however, that notice to
Agent of Borrower's intent to terminate the Credit shall not be effective
until actually received by Agent.
12.9 Assignments and Participations; Information.
(a) This Agreement may not be assigned by Borrower without
the prior written consent of Agent and Lenders. Whenever in this Agreement
reference is made to any of the parties hereto, such reference shall be
deemed to include, wherever applicable, a reference to the successors and
permitted assigns of Borrower and the successors and assigns of Agent and
each Lender.
(b) Borrower and each Lender hereby agree that on or after
the date hereof, Continental may, in its discretion, without Borrower's or
any other Lender's consent, sell one or more assignments of portions of its
interest in the Credit. Each sale described in the preceding sentence shall
be to a Person or Persons satisfactory to Continental, in its discretion,
and on such terms and conditions as Continental may determine. No other
Lender may sell any portion of its interest in the Credit without the
consent of Borrower and Agent, which consent will not be unreasonably
withheld.
(c) Each assignment of an interest hereunder shall be
subject to the following conditions: (i) each assignment shall be of a
constant, and not a varying, ratable percentage of all of the assigning
Lender's rights and obligations under this Agreement, and the Maximum Loan
Amount assigned shall be in a minimum amount of $5,000,000 and after giving
effect to such assignment no Lender's Maximum Loan Amount shall be less than
$5,000,000 (unless such Lender sells all of its interest in the Credit), and
(ii) the parties to each such assignment shall execute and deliver to Agent,
for its acceptance and recording in the Register, an Assignment and
Acceptance Agreement, with a copy to Borrower. Upon such execution,
delivery, acceptance and recording in the Register, from and after the
effective date specified in each Assignment and Acceptance Agreement and
agreed to by Agent, (x) the assignee thereunder shall, in addition to any
rights and obligations hereunder held by it immediately prior to such
effective date, if any, have the rights and obligations hereunder that have
been assigned to it pursuant to such Assignment and Acceptance Agreement and
shall, to the fullest extent permitted by law, have the same rights and
benefits hereunder as if it were an original Lender hereunder and (y) the
assigning Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance
Agreement, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance Agreement
covering all or the remaining portion of such assigning Lender's rights and
obligations under this Agreement, the assigning Lender shall cease to be a
party hereto).
(d) Agent shall maintain a copy of each Assignment and
Acceptance Agreement delivered to and accepted by it and a register (the
"Register") for the recordation of the names and addresses of Lenders and
the Maximum Loan Amount and principal amount of the Loans owing to each
Lender from time to time. The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and Borrower, Agent and
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Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
Agreement executed by the assigning Lender and the assignee and a processing
and recordation fee of $2,500 (payable by the assigning Lender or the
assignee, as shall be agreed between them), Agent shall, if such Assignment
and Acceptance Agreement has been completed and is in compliance with this
Agreement and in substantially the form of Exhibit D and Agent has consented
to the assignment evidenced thereby, (i) accept such Assignment and
Acceptance Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to Borrower.
(f) Each Lender may sell participations to one or more other
financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this
Agreement; provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) Borrower, Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (iv) such participant's
rights to agree or to restrict such Lender's ability to agree to the
modification, waiver or release of any of the terms of this Agreement or the
Related Agreements or to the release of any Collateral covered by this
Agreement or the Related Agreements, to consent to any action or failure to
act by any party to this Agreement or any of the Related Agreements, or to
exercise or refrain from exercising any powers or rights which any Lender
may have under or in respect of this Agreement or the Related Agreements or
any Collateral, shall be limited to the right to consent to (A) an increase
in the Maximum Loan Amount of Lender from whom such participant purchased a
participation, (B) reduction of the principal of, or rate or amount of
interest on the Loans subject to such participation (other than by the
payment or prepayment thereof) or (C) postponement of any date fixed for any
payment of principal of, or interest on, the Loans subject to such partici-
pation.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 12.9, disclose to the assignee or participant or proposed assignee
or participant, any information relating to Borrower or its Subsidiaries
furnished to such Lender by or on behalf of Borrower; provided that, prior
to any such disclosure, such assignee or participant, or proposed assignee
or participant, shall agree to preserve the confidentiality of any
confidential information described therein and such Lender shall notify
Borrower of the assignee or participant, or proposed assignee or partici-
pant.
(h) Anything in this Agreement to the contrary notwith-
standing, in the case of any participation, all amounts payable by Borrower
under this Agreement or the Related Agreements shall be calculated and made
in the manner and to the parties required hereby as if no such participation
had been sold.
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(i) Agent agrees to promptly notify Borrower of each sale of
a participation or permitted assignment hereunder. Borrower agrees to use
its best efforts to assist Lenders in their efforts to sell assignments and
participations hereunder. In addition, Borrower agrees to execute new Notes
in favor of each of the selling and purchasing Lender, upon each sale of an
assignment hereunder, provided that the existing Notes in favor of the
selling Lender are simultaneously therewith returned to Borrower.
12.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
12.11 Successors. This Agreement shall be binding upon each
of Borrower, Agent and each Lender and their respective successors and
permitted assigns, and shall inure to the benefit of each of Borrower, Agent
and each Lender and their respective successors and permitted assigns.
12.12 Construction. Borrower acknowledges that this Agreement
shall not be binding upon Agent or any Lender or become effective until and
unless accepted by Agent or such Lender, as applicable, in writing. If so
accepted by Agent or any Lender, this Agreement and the Related Agreements
and Supplemental Documents shall, unless otherwise expressly provided
therein, be deemed to have been negotiated and entered into in, and shall be
governed and controlled by the laws of, the State of Illinois as to
interpretation, enforcement, validity, construction, effect, choice of law,
and in all other respects, including but not limited to the legality of the
interest rate and other charges, but excluding perfection of security
interests and liens which shall be governed and controlled by the laws of
the relevant jurisdiction.
12.13 Consent to Jurisdiction. To induce Agent and each
Lender to accept this Agreement, Borrower irrevocably agrees that, subject
to Agent's sole and absolute election, ALL ACTIONS OR PROCEEDINGS IN ANY
WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT,
THE RELATED AGREEMENTS, OR THE SUPPLEMENTAL DOCUMENTATION OR THE COLLATERAL
SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE
OF ILLINOIS. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF
ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON BORROWER, AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO
BORROWER AT THE ADDRESS STATED ON THE SIGNATURE PAGE HEREOF AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.
12.14 Subsidiary Reference. Any reference herein to a
Subsidiary or Subsidiaries of Borrower, and any financial definition, ratio,
restriction or other provision of this Agreement which is stated to be
applicable to "Borrower and the Subsidiaries" or which is to be determined
on a "consolidated" or "consolidating" basis, shall apply only to the extent
Borrower has any Subsidiaries and, where applicable, to the extent any such
Subsidiaries are consolidated with Borrower for financial reporting
purposes.
12.15 Waiver of Jury Trial. BORROWER, AGENT AND EACH LENDER
EACH WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT OR ANY RELATED
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AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
(b) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first written above.
EMPIRE GAS CORPORATION
By: _______________________________
Title:____________________________
Address: 1700 South Jefferson Street
Lebanon, Missouri 65536
Telecopier Number: (417) 532-3101
Attention: Chief Executive Officer
CONTINENTAL BANK N.A.
By: ________________________________
Title: ___________________________
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Telecopier Number: (312) 828-6647
Attention: Business Credit Group
Maximum Loan Amount: $15,000,000
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LIST OF EXHIBITS AND SCHEDULES
______________________________
Exhibits:
________
Exhibit A Form of Borrowing Base Certificate
Exhibit B Form of Accountant's Letter
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance Agreement
Schedules:
Schedule 4.1 Schedule of Tradenames, State of Incorporation &
Qualification
Schedule 4.7 Insurance Summary
Schedule 4.8 Schedule of Litigation and Contingent Liabilities
Schedule 4.9 Schedule of Liens
Schedule 4.10 Schedule of Subsidiaries
Schedule 4.11 Schedule of Partnerships and Joint Ventures
Schedule 4.12 Schedule of Business and Collateral Locations
Schedule 4.16 Schedule of Patents, Trademarks and Copyrights
Schedule 4.18 Schedule of Labor Matters
Schedule 4.19 Schedule of Contingent Employee Benefit Plan Liabilities
Schedule 4.21 Schedule of Noncompliance
Schedule 4.22 Schedule of Proposed Tax Assessments
Schedule 4.25 Schedule of Environmental Matters
Schedule 4.27 Schedule of Capitalized Lease Obligations
Schedule 5.15 Schedule of Indebtedness
Schedule 5.18 Schedule of Investments
SUPPLEMENT A
to
LOAN AND SECURITY AGREEMENT
Dated as of June 29, 1994 among
Empire Gas Corporation,
Continental Bank N.A., as Agent and a Lender,
and the other Lenders Party Thereto
1. Loan Agreement Reference. This Supplement A, as it may be
amended or modified from time to time, is a part of the Loan and Security
Agreement dated as of June 29, 1994 among Borrower, Agent and Lenders
(together with all amendments, modifications and supplements thereto, the
"Loan Agreement"). Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Loan Agreement.
2. Revolving Credit Amount; Borrowing Base.
2.1 Revolving Credit Amount. The maximum amount of
Revolving Loans which Lenders will make available to Borrower (such amount
is herein called the "Revolving Credit Amount") is $15,000,000.
2.2 Borrowing Base. The term "Borrowing Base," as used
herein, shall mean:
(i) an amount equal to up to 85% of the
net amount (after deduction of such reserves and
allowances as Agent deems proper and necessary in
its reasonable judgment) of Eligible Accounts
Receivable ("Accounts Receivable Availability");
plus
(ii) an amount equal to the least of (a)
$8,000,000, (b) 150% of Accounts Receivable
Availability and (c) up to 60% (after deduction of
such reserves and allowances as Agent deems proper
and necessary in its reasonable judgment) of
Eligible Inventory; plus
(iii) during the period commencing on
August 1, 1994 and ending on January 31, 1995,
$3,000,000; plus
(iv) during the period commencing on
August 1, 1995 and ending on January 31, 1996,
$1,500,000.
2.3 Agent's and Lenders' Rights. Borrower agrees that
nothing contained in Supplement A (i) shall be construed as Agent's or any
Lender's agreement to resort or look to a particular type or item of
Collateral as security for any specific Loan or portion of the Liabilities
or advance or in any way limit Agent's or any Lender's right to resort to
any or all of the Collateral as security for any of the Liabilities, (ii)
shall be deemed to limit or reduce any Lien upon any portion of the
Collateral or other security for the Liabilities or (iii) shall supersede
Section 2.9 of the Loan Agreement.
3. Interest.
3.1 Loans.
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3.1.1 Revolving Loans.
(a) Interest to Maturity. The unpaid principal balance
of the Revolving Loans (other than Overdraft Loans and Over Advances) shall
bear interest to maturity at a per annum rate equal to the Reference Rate in
effect from time to time plus 1.00% (the "Adjusted Reference Rate");
provided, that pursuant to the provisions of Section 3.1.1(c), below, from
time to time Borrower may elect to have all or any portion of the Revolving
Loans bear interest at the LIBOR Base Rate.
(b) Default Rate. After the occurrence of any Event of
Default, at the option of Requisite Lenders, the entire unpaid principal
balance of the Revolving Loans shall bear interest until paid at a rate per
annum equal to the greater of (i) the applicable interest rate from time to
time in effect plus 2.00% and (ii) 2.00% above the applicable interest rate
in effect at the time of such Event of Default.
(c) LIBOR Rate Option. Borrower shall have the right,
from time to time, to designate all or any portion of the Revolving Loans as
bearing interest at the then applicable LIBOR Base Rate, by means of a
written notice to Agent specifying (i) the amount of such Revolving Loans
that will bear interest at a LIBOR Base Rate (provided, that such LIBOR Rate
Loans shall be in a minimum amount of Five Hundred Thousand Dollars
($500,000)); (ii) the date on which the applicable Interest Rate Period
shall begin; and (iii) the Interest Rate Period applicable thereto. All
designations of Revolving Loans as LIBOR Rate Loans must be received by
Agent not later than 10:00 a.m., Chicago time, three (3) Banking Days prior
to the date the applicable Interest Rate Period is to begin (or is to be
continued). Notwithstanding the foregoing, (x) all undesignated portions of
the Revolving Loans shall bear interest at the Adjusted Reference Rate, (y)
no Interest Rate Period may commence or be continued at any time that an
Event of Default or an Unmatured Event of Default is in existence, notwith-
standing a contrary designation by Borrower, and (z) in no event may more
than four (4) LIBOR Rate Loans having different Interest Rate Periods be
outstanding at any one time. Each designation by Borrower of a LIBOR Rate
Loan shall be irrevocable.
3.1.2 Overdraft Loans; Over Advances. Overdraft Loans
and Over Advances shall bear interest at the rate(s) determined pursuant to
Section 2.7 or Section 2.8 of the Loan Agreement, as applicable.
3.2 Computation. Interest shall be calculated on the
basis of a year consisting of 360 days and paid for actual days elapsed;
provided, that the computation of interest on LIBOR Rate Loans shall include
the date on which the applicable Interest Rate Period began, but shall
exclude the last day of the applicable Interest Rate Period. LIBOR Rate
Loans not repaid on the last day of the Interest Rate Period applicable
thereto shall be continued or converted into Revolving Loans bearing
interest at the Adjusted Reference Rate, as applicable, and bear interest as
provided herein, from and including the last day of such Interest Rate
Period. Changes in any interest rate provided for herein which are due to
changes in the Reference Rate shall take effect on the date of the change in
the Reference Rate.
3.3 Payment. Until maturity, interest on the Loans
shall be payable on the 28th day of each month, commencing on July 28, 1994,
and at maturity; provided, that interest on LIBOR Rate Loans shall be
payable in arrears on the last day of the Interest Rate Period applicable
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thereto and at maturity. After maturity, whether by acceleration or
otherwise, accrued interest shall be payable on demand.
3.4 Funding Indemnification. If any payment of a LIBOR
Rate Loan occurs on a date which is not the last day of the applicable
Interest Rate Period, whether because of acceleration, prepayment or
otherwise, Borrower will indemnify each Lender and Agent for any loss or
cost incurred by it resulting therefrom, including without limitation any
loss or cost in liquidating or employing deposits acquired to fund or
maintain such Loan. Agent shall deliver a written statement as to the
amount due, if any, under this Section, after consultation with each Lender
so affected. Such written statement shall set forth in reasonable detail
the calculations upon which Agent and each Lender determined such amount and
shall be final, conclusive and binding on Borrower in the absence of
manifest error. Determination of amounts payable under this Section shall
be calculated as though each Lender funded its LIBOR Rate Loans through the
purchase of a deposit of the type and maturity corresponding to the LIBOR
Rate Loan and applicable Interest Rate Period bearing interest at the LIBOR
Base Rate less two and fifty hundredths percent (2.50%), as applicable,
whether or not the Lender actually funded the Loan in that manner. The
amount specified in the written statement shall be payable on demand after
receipt by Borrower of the written statement.
3.5 Availability of Interest Rate Options. If any
Lender determines that maintenance of any of its LIBOR Rate Loans would
violate any applicable law, rule, regulation or directive, whether or not
having the force of law, the Lender shall immediately notify Agent thereof
and Agent shall suspend the availability of such LIBOR Rate Loans and
require any LIBOR Rate Loans outstanding and so affected to be repaid; or if
any Lender determines that (i) deposits of a type or maturity appropriate to
match fund LIBOR Rate Loans are not available, (ii) the LIBOR Rate does not
accurately reflect the cost of making such Loans, or (iii) the Lender's
ability to make or maintain LIBOR Rate Loans has been materially adversely
affected by the occurrence of any event after the date hereof, then Lender
shall immediately notify Agent thereof and Agent shall suspend the
availability of the LIBOR Rate Loans, as applicable, after the date of any
such determination.
3.6 Lenders' Obligation to Mitigate. Agent and each
Lender agrees that if it becomes aware of either (i) the occurrence of an
event or the existence of a condition described in Section 9.3 of the Loan
Agreement or Section 3.5 hereof that would cause Agent or such Lender to
make a determination of the nature described therein, or (ii) the
imposition, assessment or collection of any taxes on or in respect of any
Loan or Letter of Credit, Agent or such Lender will, to the extent
consistent with its internal policies, use reasonable efforts to issue,
make, fund or maintain the affected Letters of Credit or Loans through
another lending office of such Agent or Lender, if any, if, as a result
thereof, the additional amounts that would otherwise be required to be paid
to Agent or such Lender in respect thereof, would be reduced, or LIBOR Rate
Loans could be maintained, as the case may be, and if, as determined by
Agent or such Lender in its reasonable discretion, the issuing, making,
funding or maintaining of such Letters of Credit or Loans through such other
lending office would not adversely affect Agent or such Lender or such
Letters of Credit or Loans. Borrower hereby agrees to pay all reasonable
expenses incurred by Agent or any Lender in using another lending office
pursuant to this Section 3.6.
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4. Additional Eligible Account Receivable Requirements. Each
Account Receivable identified by Borrower as an Eligible Account Receivable
must not be unpaid on the date that is 120 days after the applicable invoice
dates. If invoices representing 25% or more of the unpaid net amount of all
Accounts Receivable from any one Account Debtor are unpaid more than 120
days after the applicable invoice dates, then all Accounts Receivable
relating to such Account Debtor shall cease to be Eligible Accounts
Receivable.
5. Intentionally Omitted.
6. Additional Covenants. From the Closing Date and thereafter
until all of Borrower's Liabilities under the Loan Agreement are paid in
full, Borrower agrees that, unless Requisite Lenders otherwise consent in
writing:
6.1 Tangible Net Worth. Borrower will not permit
Tangible Net Worth to be less than the following amounts on any date set
forth below:
Date Tangible Net Worth
____ __________________
Closing Date $(53,000,000)
June 30, 1995 (57,000,000)
June 30, 1996 (61,000,000)
6.2 Capital Expenditures. Borrower will not purchase
or otherwise acquire (including, without limitation, acquisition by way of
Capitalized Lease), or commit to purchase or otherwise acquire, or permit
its Subsidiaries to purchase or otherwise acquire or commit to purchase or
otherwise acquire, any fixed asset if, after giving effect to such purchase
or other acquisition, the aggregate cost of all fixed assets purchased or
otherwise acquired by Borrower or its Subsidiaries in any Fiscal Year period
set forth below, other than in connection with an Acquisition or startup,
would exceed the following amounts during the corresponding periods:
Period Capital Expenditures
______ ____________________
1995 Fiscal Year $3,750,000
1996 Fiscal Year 3,000,000
1997 Fiscal Year 3,000,000
6.3 Interest Coverage Ratio. Borrower will not permit
the ratio ("Interest Coverage Ratio") of (a) net earnings before interest
expense, income tax expense, depreciation and amortization for any period
set forth below, to (b) cash interest expense in respect of Indebtedness
under the Agreement, in respect of the Senior Notes, in respect of
Subordinated Debt and in respect of Acquisition Indebtedness, in each case
for such period, each determined for Borrower and its Subsidiaries on a
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consolidated basis, and in accordance with GAAP, to be less than 1.2:1.0 for
any fiscal quarter.
For purposes of Section 6.3, (i) net earnings shall not
include any gains or losses on the sale or other disposition of Investments
or fixed assets or any other extraordinary items of income, and (ii)
interest expense shall include, without limitation, implicit interest
expense on Capitalized Leases.
Borrower's Initials_______
Agent's Initials_________
Date: June 29, 1994