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Exhibit 10.6
EXECUTION COPY
====================
CREDIT AGREEMENT
BY AND AMONG
TEAM MUCHO, INC.
(formerly known as TEAM AMERICA CORPORATION)
and
MUCHO.COM, INC.
as Borrowers,
THE PROVIDENT BANK
as Agent,
and
THE LENDING INSTITUTIONS NAMED HEREIN
as Lenders
dated as of
December 28, 2000
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TABLE OF CONTENTS
Page
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ARTICLE 1 INTERPRETATION..........................................................................................1
Section 1.1 General Principles of Interpretation...................................................1
Section 1.2 Definitions............................................................................2
ARTICLE 2 THE LOANS..............................................................................................26
Section 2.1 Commitments...........................................................................26
Section 2.2 Making the Loans......................................................................26
Section 2.3 Draws, Advances and Settlement of Payments and Advances...............................27
Section 2.4 The Notes.............................................................................28
Section 2.5 Interest Payable on the Loans.........................................................28
Section 2.6 Payments of Interest; Repayments and Prepayments of Principal.........................29
Section 2.7 Payments and Computations.............................................................33
Section 2.8 Payments to be Free of Deductions.....................................................34
Section 2.9 Use of Proceeds.......................................................................34
Section 2.10 Additional Costs, etc.................................................................35
Section 2.11 Agent and Lender Statements...........................................................35
Section 2.12 Conversion of Loans...................................................................36
Section 2.13 Selection and Continuation of Interest Periods........................................36
Section 2.14 Increased Costs, Illegality, etc......................................................37
Section 2.15 Breakage Compensation.................................................................39
ARTICLE 3 SECURITY AGREEMENT.....................................................................................40
Section 3.1 Security Interest.....................................................................40
Section 3.2 Financing Statements; Additional Documents............................................40
Section 3.3 Accounts; Chattel Paper; Lease Agreements.............................................41
Section 3.4 Pledge of Stock.......................................................................41
Section 3.5 Release of Collateral.................................................................41
ARTICLE 4 CONDITIONS PRECEDENT TO DISBURSEMENTS..................................................................41
Section 4.1 Conditions Precedent to Initial Closing...............................................41
Section 4.2 Transaction Documents.................................................................45
Section 4.3 Conditions Precedent to Subsequent Loans and Letters of Credit........................46
ARTICLE 5 GENERAL REPRESENTATIONS AND WARRANTIES.................................................................48
Section 5.1 Existence, etc........................................................................48
Section 5.2 Authority, etc........................................................................49
Section 5.3 Binding Effect of Documents, etc......................................................50
Section 5.4 No Events of Default, etc.............................................................50
Section 5.5 Financial Statements..................................................................50
Section 5.6 No Adverse Changes....................................................................53
Section 5.7 Title to Assets; Material Leases......................................................53
Section 5.8 Intellectual Property.................................................................53
Section 5.9 Indebtedness..........................................................................54
Section 5.10 Litigation............................................................................54
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Section 5.11 No Materially Adverse Contracts.......................................................55
Section 5.12 Taxes and Tax Returns, etc............................................................55
Section 5.13 Contracts with Affiliates, etc........................................................56
Section 5.14 Employee Benefit Plans................................................................56
Section 5.15 Governmental Regulation...............................................................56
Section 5.16 Securities Activities.................................................................57
Section 5.17 Disclosure............................................................................57
Section 5.18 No Material Default...................................................................57
Section 5.19 Environmental Conditions..............................................................57
Section 5.20 Licenses and Permits..................................................................58
Section 5.21 Special Flood Hazard Determination....................................................58
Section 5.22 General Collateral Representation.....................................................59
Section 5.23 Liabilities of Inactive Subsidiaries..................................................59
Section 5.24 Labor Relations.......................................................................60
Section 5.25 Solvency..............................................................................60
ARTICLE 6 AFFIRMATIVE COVENANTS OF BORROWERS.....................................................................60
Section 6.1 Reports and Other Information.........................................................60
Section 6.2 Maintenance of Property; Authorization; Insurance.....................................64
Section 6.3 Key Man Life Insurance................................................................65
Section 6.4 Corporate Existence...................................................................65
Section 6.5 Inspection Rights.....................................................................65
Section 6.6 Payment of Taxes and Claims...........................................................66
Section 6.7 Compliance with Laws..................................................................66
Section 6.8 Notice of Other Events................................................................66
Section 6.9 Communication with Accountants........................................................67
Section 6.10 Payment of Indebtedness...............................................................67
Section 6.11 Payment of Fees.......................................................................67
Section 6.12 Performance of Obligations Under Certain Documents....................................68
Section 6.13 Governmental Consents and Approvals...................................................68
Section 6.14 Employee Benefit Plans and Guaranteed Pension Plans...................................68
Section 6.15 Further Assurances....................................................................69
Section 6.16 Interest Rate Risk Management.........................................................69
Section 6.17 Borrowers' Depository Accounts........................................................69
Section 6.18 Use of Loan Proceeds..................................................................69
Section 6.19 SEC Reports and Registration Statements...............................................69
Section 6.20 Additional Security Documents.........................................................70
ARTICLE 7 FINANCIAL COVENANTS....................................................................................70
Section 7.1 Minimum Current Ratio.................................................................70
Section 7.2 Interest Coverage Ratio...............................................................70
Section 7.3 Fixed Charge Coverage Ratio...........................................................70
Section 7.4 Reserved..............................................................................71
Section 7.5 Lease Obligations.....................................................................71
Section 7.6 Minimum EBITDA........................................................................71
Section 7.7 Maximum Operating Losses..............................................................71
Section 7.8 Consolidated Senior Debt Leverage Ratio...............................................71
Section 7.9 Parent Senior Debt Leverage Ratio.....................................................71
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ARTICLE 8 NEGATIVE COVENANTS OF BORROWERS........................................................................72
Section 8.1 Limitation on Nature of Business......................................................72
Section 8.2 Limitation on Fundamental Changes.....................................................72
Section 8.3 Restricted Payments...................................................................73
Section 8.4 Management Compensation...............................................................73
Section 8.5 Limitation on Disposition of Assets...................................................73
Section 8.6 Limitation on Investments.............................................................74
Section 8.7 Acquisition of Margin Securities......................................................75
Section 8.8 Limitation on Mortgages, Liens and Encumbrances.......................................75
Section 8.9 No Additional Negative Pledges........................................................76
Section 8.10 Restrictions on Subsidiary Distributions to Borrowers.................................76
Section 8.11 Limitation on Indebtedness............................................................77
Section 8.12 Limitation on Sales and Leasebacks....................................................77
Section 8.13 Transactions with Affiliates..........................................................77
Section 8.14 Changes Relating to Preferred Stock...................................................77
Section 8.15 No Additional Bank Accounts...........................................................78
Section 8.16 Inactive Subsidiaries.................................................................78
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES.........................................................................78
Section 9.1 Events of Default.....................................................................78
Section 9.2 Termination of Commitments and Acceleration of Obligations............................80
Section 9.3 Remedies..............................................................................81
Section 9.4 No Implied Waiver; Rights Cumulative..................................................83
Section 9.5 Set-Off; Pro Rata Sharing.............................................................83
ARTICLE 10 CONCERNING THE AGENT AND THE LENDERS..................................................................84
Section 10.1 Appointment of Agent..................................................................84
Section 10.2 Authority.............................................................................84
Section 10.3 Acceptance of Appointment.............................................................84
Section 10.4 Collateral Matters....................................................................85
Section 10.5 Agency for Perfection.................................................................86
Section 10.6 Application of Moneys.................................................................86
Section 10.7 Reliance by Agent.....................................................................86
Section 10.8 Exculpatory Provisions................................................................86
Section 10.9 Action by Agent.......................................................................87
Section 10.10 Amendments, Waivers and Consents......................................................88
Section 10.11 Indemnification.......................................................................88
Section 10.12 Reimbursement of Agent................................................................88
Section 10.13 Sharing of Funds Received.............................................................88
Section 10.14 Dealing with Lenders..................................................................89
Section 10.15 Agent as Lender.......................................................................89
Section 10.16 Duties Not to be Increased............................................................89
Section 10.17 Lender Credit Decisions...............................................................89
Section 10.18 Resignation of Agent..................................................................89
Section 10.19 Assignment of Notes; Participation....................................................90
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ARTICLE 11 LETTERS OF CREDIT.....................................................................................91
Section 11.1 Letters of Credit.....................................................................91
Section 11.2 Letter of Credit Requests; Notices of Issuance........................................92
Section 11.3 Agreement to Repay Letter of Credit Drawings..........................................93
Section 11.4 Letter of Credit Participations.......................................................93
Section 11.5 Increased Costs.......................................................................95
Section 11.6 Letter of Credit Fees.................................................................96
ARTICLE 12 PROVISIONS OF GENERAL APPLICATION.....................................................................97
Section 12.1 Term of Agreement.....................................................................97
Section 12.2 Notices...............................................................................97
Section 12.3 Survival of Representations...........................................................98
Section 12.4 Power of Attorney.....................................................................98
Section 12.5 Amendments............................................................................98
Section 12.6 Costs, Expenses, Taxes and Indemnification...........................................100
Section 12.7 Language.............................................................................101
Section 12.8 Binding Effect; Assignment...........................................................101
Section 12.9 Governing Law; Jurisdiction and Venue................................................101
Section 12.10 Waiver of Jury Trial.................................................................102
Section 12.11 Waivers..............................................................................102
Section 12.12 Interpretation and Proof of Loan Documents...........................................102
Section 12.13 Integration of Schedules and Exhibits................................................102
Section 12.14 Headings.............................................................................102
Section 12.15 Counterparts.........................................................................103
Section 12.16 Severability.........................................................................103
Section 12.17 One General Obligation...............................................................103
Section 12.18 Survival of Indemnities..............................................................103
Section 12.19 General Limitation of Liability......................................................103
Section 12.20 No Duty..............................................................................104
Section 12.21 Lenders and Agents Not Fiduciary to Borrowers, etc...................................104
Section 12.22 Independence of Covenants............................................................104
Section 12.23 Obligations of Borrowers.............................................................104
Section 12.24 Non-Public Information...............................................................105
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INDEX OF DEFINITIONS
A
Acceptance Date..................................................................................................86
Account Debtor....................................................................................................2
Accountants.......................................................................................................2
Accounts..........................................................................................................2
Acquisition.......................................................................................................3
Acquisition Commitment............................................................................................3
Acquisition Commitment Availability...............................................................................3
Acquisition Loan..................................................................................................3
Acquisition Loan Closing Date....................................................................................28
Acquisition Note.................................................................................................26
Acquisition Notes................................................................................................26
Affiliate.........................................................................................................3
Affiliated Person.................................................................................................3
Agent..........................................................................................................1, 4
Agent Disbursement Account.......................................................................................25
Agreement.........................................................................................................4
Asset Dispositions...............................................................................................71
B
Bankruptcy Code...................................................................................................4
Borrower..........................................................................................................1
Borrowers.........................................................................................................1
Borrowing.........................................................................................................4
Business Day......................................................................................................4
C
Capital Expenditure...............................................................................................4
Capital Lease.....................................................................................................4
Capital Lease Obligation..........................................................................................4
Capital Stock.....................................................................................................4
Cash Equivalents..................................................................................................4
Cash Flow.........................................................................................................5
Cash Interest Expense.............................................................................................5
Casualty Loss.....................................................................................................5
Change of Control.................................................................................................5
Chattel Paper.....................................................................................................6
Claims...........................................................................................................95
Closing Date......................................................................................................6
Code..............................................................................................................6
Collateral........................................................................................................6
Collateral Assignment of Intellectual Property....................................................................6
Collateral Assignment of Third Party Contracts....................................................................7
Collateral Assignments............................................................................................6
Commitment........................................................................................................7
Commitment Fee....................................................................................................7
Common Stock......................................................................................................7
Compensation.....................................................................................................71
Compliance Certificate............................................................................................7
Computation Date..................................................................................................7
Consolidated......................................................................................................7
Contingent Obligation.............................................................................................7
Continuation......................................................................................................8
Continue..........................................................................................................8
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Continued.........................................................................................................8
Control Group.....................................................................................................5
Conversion........................................................................................................8
Convert...........................................................................................................8
Converted.........................................................................................................8
Copyright.........................................................................................................8
Credit Agreement..................................................................................................1
Credit Parties....................................................................................................8
Current Assets....................................................................................................8
Current Liabilities...............................................................................................8
Current Ratio.....................................................................................................8
D
Debt Securities...................................................................................................8
Default...........................................................................................................8
Default Interest Rate.............................................................................................8
Defaulting Lender.................................................................................................9
Documents.........................................................................................................9
E
EBITDA............................................................................................................9
Effective Date....................................................................................................9
Employee Benefit Plan.............................................................................................9
Environmental Laws................................................................................................9
EPA Permits......................................................................................................55
Equipment.........................................................................................................9
Equity Interests.................................................................................................10
ERISA............................................................................................................10
ERISA Affiliate..................................................................................................10
ERISA Liabilities................................................................................................10
Event of Default.............................................................................................10, 75
Excess Cash Flow.................................................................................................10
Existing Indebtedness............................................................................................52
Existing Indebtedness Agreements.................................................................................52
Extraordinary Disposition........................................................................................10
F
Federal Funds Effective Rate.....................................................................................10
Fee Mortgages....................................................................................................11
FEMA.............................................................................................................11
Financial Projections............................................................................................50
Fixed Charges....................................................................................................11
G
GAAP.............................................................................................................11
GAAS.............................................................................................................11
General Intangibles..............................................................................................11
Generally Accepted Accounting Principles.........................................................................11
Generally Accepted Auditing Standards............................................................................11
Guaranteed Pension Plan..........................................................................................11
Guarantor Collateral Assignment..................................................................................11
Guarantor Subsidiary.............................................................................................11
Guaranty.........................................................................................................12
H
Hazardous Substances.............................................................................................12
Head Office......................................................................................................12
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I
in writing.......................................................................................................24
Inactive Subsidiary..............................................................................................12
Indebtedness.....................................................................................................12
Indebtedness for Borrowed Money..................................................................................13
Initial Advance Commitment.......................................................................................13
Initial Advance Lender...........................................................................................13
Initial Advance Note.............................................................................................26
Instruments......................................................................................................13
Intellectual Property............................................................................................13
Interest Expense.................................................................................................14
Interest Period..................................................................................................14
Interest Rate....................................................................................................14
Inventory........................................................................................................14
Investment.......................................................................................................14
L
Leasehold Mortgages..............................................................................................14
Legal Requirements...............................................................................................14
Lender........................................................................................................1, 15
Lender Default...................................................................................................15
Lenders.......................................................................................................1, 15
Letter of Credit.................................................................................................87
Letter of Credit Documents.......................................................................................88
Letter of Credit Fee.............................................................................................92
Letter of Credit Issuer..........................................................................................15
Letter of Credit Obligor.........................................................................................87
Letter of Credit Outstandings....................................................................................15
Letter of Credit Request.........................................................................................88
Letters of Credit................................................................................................87
LIBOR Base Rate..................................................................................................15
LIBOR Loan.......................................................................................................15
LIBOR Office.....................................................................................................15
Licenses and Permits.............................................................................................15
Lien.............................................................................................................15
Loan.............................................................................................................16
Loan Documents...................................................................................................15
Loan Year........................................................................................................16
Loans............................................................................................................16
M
Management Shareholders..........................................................................................16
Mask Works.......................................................................................................16
Material Adverse Effect..........................................................................................16
Material Lease...................................................................................................16
Material Subsidiary..............................................................................................16
Maturity Date....................................................................................................16
Merger...........................................................................................................16
Merger Agreement.................................................................................................16
Merger Sub.......................................................................................................16
Minimum Borrowing Amount.........................................................................................17
Mortgage.........................................................................................................17
Mortgages........................................................................................................17
Mucho.com.........................................................................................................1
Multiemployer Plan...............................................................................................17
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N
Net Income.......................................................................................................17
Net Proceeds.....................................................................................................17
Net Worth........................................................................................................17
Note.............................................................................................................17
Notes............................................................................................................17
Notice of Acceleration...........................................................................................77
Notice of Borrowing..............................................................................................26
Notice of Continuation...........................................................................................35
Notice of Conversion.............................................................................................34
O
Obligations......................................................................................................18
P
Parent............................................................................................................1
Participant......................................................................................................89
Participation Percentage.........................................................................................18
Patents..........................................................................................................18
PBGC.............................................................................................................11
Permitted Acquisition............................................................................................18
Permitted Indebtedness...........................................................................................74
Permitted Lien...................................................................................................72
Permitted Liens..................................................................................................19
Person...........................................................................................................19
Placement Memorandum.............................................................................................50
Plan.............................................................................................................19
Pledge Agreement.................................................................................................19
Pledged Stock....................................................................................................19
Preferred Stock..................................................................................................19
Preferred Stock Transaction......................................................................................20
Premises.........................................................................................................20
Prime Rate.......................................................................................................20
Prime Rate Loan..................................................................................................20
Principal Officer................................................................................................20
Pro Forma Financial Statements...................................................................................50
Pro Rata Share...................................................................................................20
Proceeds.........................................................................................................20
Projections......................................................................................................20
Property.........................................................................................................20
Provident.........................................................................................................1
R
Real Estate......................................................................................................21
Reference Period.................................................................................................21
Registration Statement............................................................................................1
Reportable Event.................................................................................................23
Requisite Lenders................................................................................................21
Restricted Payment...............................................................................................21
S
SEC..............................................................................................................21
Securities.......................................................................................................21
Security Agreement...............................................................................................21
Security Documents...............................................................................................21
Solvent..........................................................................................................22
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Standard Flood Hazard Determination Form.........................................................................22
Stated Amount....................................................................................................22
Subsidiaries.....................................................................................................22
Subsidiary.......................................................................................................22
T
Tender Offer.....................................................................................................22
Termination Date.................................................................................................22
Termination Event................................................................................................23
Title Company....................................................................................................45
Total Acquisition Commitment.....................................................................................23
Total Commitment.................................................................................................23
Total Commitment Availability....................................................................................23
Total Initial Advance Commitment.................................................................................25
Trademarks.......................................................................................................23
Transaction Documents............................................................................................23
Transactions.....................................................................................................24
Type.............................................................................................................24
U
U.S..............................................................................................................24
UCC..............................................................................................................24
UCC Financing Statements.........................................................................................24
Unfunded Current Liability.......................................................................................24
United States....................................................................................................24
Unpaid Drawing...................................................................................................89
Unutilized Initial Advance Amount................................................................................25
W
Wholly-Owned Subsidiary..........................................................................................24
Working Capital..................................................................................................24
written..........................................................................................................24
Written..........................................................................................................24
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SCHEDULES
A Lenders
3.1 Mortgaged Property and Leasehold Interests
4.1(u) Lien Searches
5.1(a) Foreign Qualifications
5.1(b) Capital Stock
5.1(c) Subsidiaries
5.7 Material Leases
5.8 Intellectual Property
5.9 Existing Indebtedness
5.12(c) Tax Audits
5.12(d) Tax Sharing Agreements
5.22(a) Collateral Subject to Purchase Money Liens and Prohibitions Against Liens
5.22(b) Liens
5.22(c) UCC Filing Offices
6.3 Key Man Insurance
8.8(f) Permitted Liens
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EXHIBITS
Exhibit A Form of Collateral Assignment of Third Party Contracts
Exhibit B Form of Collateral Assignment of Intellectual Property
Exhibit C Form of Compliance Certificate
Exhibit D [RESERVED]
Exhibit E [RESERVED]
Exhibit F Form of Pledge Agreement
Exhibit G Form of Notice of Borrowing
Exhibit H Form of Initial Advance Note
Exhibit I Form of Acquisition Note
Exhibit J Form of Notice of Conversion
Exhibit K Form of Permitted Acquisitions Request and Certificate
Exhibit L [RESERVED]
Exhibit M Form of Guaranty
Exhibit N Form of Security Agreement
Exhibit O Form of Assignment and Assumption Agreement
Exhibit P Form of Letter of Credit Request
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THIS CREDIT AGREEMENT is made effective as of the 28th day of
December, 2000 (herein, as amended, supplemented or otherwise modified from time
to time (this "CREDIT AGREEMENT"), among the following:
(i) TEAM MUCHO, INC., an Ohio corporation (formerly known as TEAM
AMERICA CORPORATION) ("PARENT"), MUCHO.COM, INC., a Nevada corporation and, upon
consummation of the Merger described herein, the surviving corporation of the
Merger and a wholly-owned subsidiary of the Parent ("MUCHO.COM") (Parent and
Mucho.com, together with any and all of their respective successors and assigns,
are herein referred to individually, collectively and interchangeably as
"BORROWER" and "BORROWERS");
(ii) the lending institutions listed in SCHEDULE A hereto (herein,
together with its or their respective successors and assigns, each a "LENDER"
and collectively, the "LENDERS"); and
(iii) THE PROVIDENT BANK, an Ohio banking corporation, in its capacity
as agent for Lenders under this Agreement and the Loan Documents (herein,
interchangeably, "PROVIDENT" or the "AGENT").
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in Section 1.2 are used herein as so defined.
(2) Borrowers have applied to Lenders for credit facilities in order to
provide funds for (a) a portion of the costs and expenses of (i) refinancing
certain indebtedness of the Parent, (ii) financing the Parent's Tender Offer
described in its Form S-4 Registration Statement declared effective by the SEC
on November 28, 2000 (the "REGISTRATION STATEMENT"), and (iii) engaging in
Permitted Acquisitions as contemplated by this Agreement, and (b) other lawful
purposes for Borrowers and their Subsidiaries.
(3) Subject to and upon the terms and conditions set forth herein,
Lenders are willing to make available to Borrowers the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
ARTICLE 1
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INTERPRETATION
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Section 1.1 GENERAL PRINCIPLES OF INTERPRETATION. For all purposes of
this Credit Agreement (except where such interpretations would be inconsistent
with the context or the subject matter):
(a) COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
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(b) Where appropriate, words importing the singular only shall include
the plural and vice versa, and all references to dollars shall be United States
Dollars.
(c) Accounting terms not otherwise defined herein shall have the
meanings customarily given in accordance with Generally Accepted Accounting
Principles (as hereinafter defined) and all financial computations or
determinations to be made under this Credit Agreement shall, unless otherwise
specifically provided herein, be made in accordance with the financial
statements delivered pursuant to Section 4.1(x) and shall be made on a
Consolidated basis. Notwithstanding the foregoing, if Borrowers notify Agent
that Borrowers request an amendment to any provision of Article 6, Article 7 or
Article 8 to eliminate the effect of any change occurring after the Effective
Date in GAAP or in the application thereof to such provision (or if Agent
notifies Borrowers that the Requisite Lenders request an amendment to any such
provision hereof for such purposes), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance with
the requirements of this Agreement.
(d) TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Sections, Annexes,
Appendices, Exhibits and Schedules shall be construed to refer to Sections of,
and Annexes, Appendices, Exhibits and Schedules to, this Agreement, and (e) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all real property, tangible and intangible assets
and properties, including cash, securities, accounts and contract rights, and
interests in any of the foregoing.
Section 1.2 DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the following meanings in this
Agreement:
"ACCOUNTANTS" mean Arthur Anderson LLP, or such other nationally
recognized firm of certified public accountants selected by Borrowers and
acceptable to Agent and Lenders.
"ACCOUNT DEBTOR" means any Person obligated for the payment of an
Account.
"ACCOUNTS" mean, with respect to any Person, such Person's accounts,
rental agreements and other contract rights, rights to payment and other forms
of obligation for the payment of
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money, whether now existing or existing in the future, including, without
limitation, all (i) accounts receivable (whether or not specifically listed on
schedules furnished to Agent), all accounts created by or arising from all of
such Person's sales of goods, financial instruments, documents, permits or other
items, or rendition of services, including funds transfer services, made under
any of such Person's trade names or styles, or through any of such Person's
subsidiaries or divisions, and all accounts acquired by assignment in the
ordinary course of business; (ii) unpaid seller's rights (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom; (iii) rights to any goods represented by any of the
foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by such Person with respect to any such accounts receivable or
account debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any Person who is not a Subsidiary of a Borrower, (ii) any
acquisition of all or substantially all of the assets of any Person or division
thereof, whether through purchase of assets, merger or otherwise, or (iii) any
acquisition of a majority of the outstanding equity or other similar interests
in any Person (whether by merger, stock purchase or otherwise).
"ACQUISITION COMMITMENT" shall mean, with respect to each Lender, a
total amount equal to (i) the sum of (a) the amount, if any, set forth opposite
such Lender's name in SCHEDULE A as its "Acquisition Commitment" PLUS (b) the
Unutilized Initial Advance Amount minus (ii) the sum of (y) reductions of the
Acquisition Commitment pursuant to this Agreement and (z) all Letter of Credit
Outstandings at any time and from time to time, as such amount may be adjusted
from time to time as a result of assignments to or from such Lender pursuant to
Section 10.19.
"ACQUISITION COMMITMENT AVAILABILITY" means, for any Lender at any
time, the excess of (i) such Lender's Acquisition Commitment at such time over
(ii) the principal amount of Acquisition Loans made by such Lender and
outstanding at such time and all Letter of Credit Outstandings then outstanding.
"ACQUISITION LOAN" means each Loan outstanding from time to time made
pursuant to Section 2.2(b).
"AFFILIATE" means, in relation to any Person (in this definition called
"AFFILIATED PERSON"), any Person (i) which (directly or indirectly) controls or
is controlled by or is under common control with such Affiliated Person; or (ii)
which (directly or indirectly) owns or holds five percent (5%) or more of any
equity interest in any Borrower; or (iii) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or held by
such Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise. Notwithstanding the foregoing, (x) a
director, officer or employee of a Person shall not, solely by reason of such
status, be considered an Affiliate of such Person; and (y) neither
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Agent nor any Lender shall in any event be considered an Affiliate of any
Borrower or any Subsidiary.
"AGENT" means Provident acting in the capacity as Agent for Lenders
under the Loan Documents and includes (where the context so admits) any other
Person or Persons succeeding to the functions of Agent under such documents.
"AGREEMENT" means this Credit Agreement (including all of the Annexes,
Appendices, Schedules and Exhibits annexed hereto) as originally executed, or,
if supplemented, amended or restated from time to time, as so supplemented,
amended or restated.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect or any successor thereto.
"BORROWING" means (i) the incurrence of the Initial Advance by
Borrowers, and/or (ii) the incurrence of an Acquisition Loan, consisting of one
Type of Loan, by a Borrower from all of Lenders having Commitments in respect
thereof on a pro rata basis on a given date (or resulting from Conversions or
Continuations on a given date), having in the case of LIBOR Loans the same
Interest Period.
"BUSINESS DAY" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cincinnati, Ohio and
New York, New York.
"CAPITAL EXPENDITURE" means any amount paid or incurred in connection
with the purchase of real estate, plant, machinery, equipment or other similar
expenditure (including all renewals, improvements and replacements thereto, and
all obligations under any lease of any of the foregoing) which would be required
to be capitalized and shown on the Consolidated balance sheet of Borrowers in
accordance with GAAP.
"CAPITAL LEASE" means any lease of Property, which has been or is
required to be capitalized on a Borrower's financial statements in accordance
with GAAP.
"CAPITAL LEASE OBLIGATION" means any obligation to pay rent or other
amounts under a Capital Lease and, for the purpose of this Agreement, the amount
of such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) or corporate stock, whether
common or preferred, including, without limitation, partnership interests.
"CASH EQUIVALENTS" means: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within three (3) months from the date of acquisition thereof;
(ii) investments in certificates of deposit or bankers' acceptances maturing
within three (3) months from the date of acquisition issued by any Lender or any
other commercial bank organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at least Two
Hundred Fifty Million Dollars ($250,000,000); (iii) investments in commercial
paper of any Lender or of any other Person
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which, at the time of issuance, have a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Moody's Investors Service, Inc. and
maturing not more than six (6) months from the date of acquisition thereof; (iv)
obligations of the type described in (i), (ii) or (iii) above purchased pursuant
to a repurchase agreement obligating the counterparty to repurchase such
obligations not later than thirty (30) days after the purchase thereof, secured
by a fully perfected security interest in any such obligation, and having a
market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of the issuing bank; and (v) time
deposits or Eurodollar time deposits maturing no more than thirty (30) days from
the date of creation with commercial banks having membership in the Federal
Deposit Insurance Corporation in amounts not exceeding the lesser of One Hundred
Thousand Dollars ($100,000) or the maximum insurance applicable to the aggregate
amount of such Person's deposits in such institution.
"CASH FLOW" means, for any period, the following, each calculated for
such period, without duplication: (i) EBITDA, less (ii) income and franchise
taxes actually paid (net of any refunds received) (including decreases in
deferred income taxes resulting from tax payments actually made), less (iii)
Capital Expenditures (to the extent actually made in cash and excluding that
portion of Capital Expenditures which have been financed), less (iv) cash
payments made pursuant to Restricted Payments permitted under Section 8.3(d).
"CASH INTEREST EXPENSE" means the aggregate amount of all interest
expense of Borrowers and their Subsidiaries on Indebtedness for Borrowed Money
(net of interest income) paid but not accrued.
"CASUALTY LOSS" means any occurrence or event pursuant to which any
asset or property owned or used by any Credit Party is (i) damaged or destroyed,
or suffers any other loss, or (ii) condemned, confiscated or otherwise taken, in
whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise and in either case the amount of the damage,
destruction, loss or diminution in value is in excess of One Hundred Thousand
Dollars ($100,000).
"CHANGE OF CONTROL" means the time at which (i) any Person (including a
Person's Affiliates and associates) or group (as that term is understood under
Section 13(d) of the Exchange Act and the rules and regulations thereunder),
other than Management Shareholders and Affiliates thereof (the "CONTROL GROUP")
or a group controlled by the Control Group, has become the beneficial owner of a
percentage (based on voting power, in the event different classes of stock shall
have different voting powers) of the voting stock of Borrowers equal to at least
twenty-five percent (25%), (ii) there shall be consummated any consolidation or
merger of Borrowers pursuant to which Borrowers' common stock (or other capital
stock) would be converted into cash, securities or other property, other than a
merger or consolidation of Borrowers in which the holders of such common stock
(or such other capital stock) immediately prior to the merger have the same
proportionate ownership, directly or indirectly, of common stock of the
surviving corporation immediately after the merger as they had of Borrowers'
common stock immediately prior to such merger, (iii) all or substantially all of
Borrowers' assets shall be sold, leased, conveyed or otherwise disposed of as an
entirety or substantially as an
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entirety to any Person (including an Affiliate or associate of Borrowers) in one
or a series of transactions, (iv) either or both of S. Cash Nickerson and Kevin
T. Costello shall cease to perform their duties as senior executive managers of
Borrowers unless their successors or a plan of successorship reasonably
acceptable to Agent and the Requisite Lenders shall have been appointed or
adopted within ninety (90) days of such event and, in the case of adoption after
a plan of successorship, successors reasonably acceptable to Agent and the
Requisite Lenders shall have been appointed within one hundred eighty (180) days
after such event, or (v) at any time after the Effective Date, individuals who
at the Effective Date constituted the Parent's Board of Directors (together with
any new directors (x) whose election to the Parent's Board of Directors was, or
(y) whose nomination for election by the Parent's shareholders was (prior to the
date of the proxy or consent solicitation relating to such nomination), approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the Effective Date or whose election or nomination for
election was previously approved in accordance with clause (x) or (y) hereof),
shall cease for any reason to constitute a majority of the directors then in
office.
"CHATTEL PAPER" means any "chattel paper" as such term is defined in
Section 9-105(1)(b) of the UCC, now owned or hereafter acquired.
"CLOSING DATE" means the day on which the Initial Advance Loan is made
pursuant to this Agreement.
"CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any successor federal tax code, and any reference
to any statutory provision shall be deemed to be a reference to any successor
provision or provisions.
"COLLATERAL" means all of the Credit Parties' right, title and interest
in and to all Accounts, Inventory, Equipment, General Intangibles, fixtures,
goods, motor vehicles, leasehold improvements, Documents, Instruments, Chattel
Paper, Intellectual Property, Inventory subject to leases and rights under lease
agreements for the leasing of inventory, money, deposit accounts, rights to draw
on letters of credit, permits, licenses, key man life insurance policies, and
the cash or noncash Proceeds (including insurance or other rights to receive
payment with respect thereto) of any of the foregoing and all accessions and
additions to and replacements of the foregoing, and all books and records
(including, without limitation, customer lists, credit files, computer programs,
printouts and other computer materials and records) pertaining to any of the
foregoing or any of the Premises, together with the real property, leasehold
interests, buildings and fixtures described in the Mortgages and all other
property and rights assigned by the Credit Parties to Agent, for the ratable
benefit of Lenders, under the Collateral Assignments, Security Agreements,
Pledge Agreement and other Loan Documents to secure the Obligations.
"COLLATERAL ASSIGNMENTS" shall mean, collectively, the Collateral
Assignment of Third Party Contracts, the Collateral Assignment of Intellectual
Property and all Guarantor Collateral Assignments.
"COLLATERAL ASSIGNMENT OF INTELLECTUAL PROPERTY" shall mean the
Collateral Assignment of Intellectual Property and Security Agreement between
Borrowers and Agent, as collateral agent, substantially in the form of EXHIBIT B
attached to and made part hereof, as the same may be amended or modified from
time to time, which secures the Obligations.
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"COLLATERAL ASSIGNMENT OF THIRD PARTY CONTRACTS" shall mean the
Collateral Assignment of Third Party Contracts between Borrowers and Agent, as
collateral agent, substantially in the form of EXHIBIT A attached to and made
part hereof, as the same may be amended or modified from time to time, which
secures the Obligations.
"COMMITMENT" shall mean, with respect to each Lender, its Initial
Advance Commitment or its Acquisition Commitment, or both, as the case may be.
"COMMITMENT FEE" means a fee equal to one-half of one percent (0.5%)
per annum (computed on the basis of a 360-day year for the actual number of days
elapsed) on the daily unused amount of the Total Commitment.
"COMMON STOCK" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Credit Agreement, and includes, without
limitation, all series and classes of such common stock.
"COMPLIANCE CERTIFICATE" means a certificate, substantially in the form
of EXHIBIT C hereto, which certificate evidences the compliance by Borrowers
with the covenants of this Agreement.
"COMPUTATION DATE" means the last day of each March, June, September
and December.
"CONSOLIDATED" means, with respect to any accounting matter or amount,
such matter or amount computed on a consolidated basis for the specified Persons
and its Subsidiaries in accordance with GAAP. Unless otherwise qualified, all
references to "Consolidated" in this Agreement shall refer to Parent and all of
its direct and indirect Subsidiaries.
"CONTINGENT OBLIGATION" means any direct or indirect liability,
contingent or otherwise, with respect to any Indebtedness, lease, dividend,
letter of credit, banker's acceptance or other obligation of another if the
primary purpose or intent thereof in incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof.
Contingent Obligations shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (ii) any liability for the
obligations of another through any agreement (contingent or otherwise) (A) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (B) to maintain the solvency of any balance sheet item, level of
income or financial condition of another, or (C) to make take-or-pay,
pay-or-play or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, if in the case of any agreement
described under subclauses (A), (B) or (C) of this sentence the primary purpose
or intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
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"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of a Loan which is a LIBOR Loan for an additional Interest Period
as provided in Section 2.9.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to Section 2.12, Section
2.13 or Section 2.14.
"COPYRIGHT" means all of the following in which any Borrower now holds
or hereafter acquires any interest: (i) all copyright rights, applications or
registrations and like protections in each work or authorship or derivative
work, whether published or not (whether or not it is a trade secret) now or
later existing, created, acquired or held; (ii) all reissues, extensions and
renewals of the foregoing; (iii) all income, royalties, damages and payments now
and hereafter due and/or payable with respect to the foregoing, including
without limitation damages and payments for past or future infringements
thereof; (ix) all rights to sue for past, present and future infringements of
the foregoing; and (v) all rights corresponding to the foregoing throughout the
world.
"CREDIT PARTIES" shall mean, collectively, Borrowers, all Guarantor
Subsidiaries, and any other Person (other than Agent and Lenders) that is a
party to any of the Loan Documents.
"CURRENT ASSETS" and "CURRENT LIABILITIES" mean at any time, all assets
or liabilities (whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, secured or unsecured
arising by contract, operation of law or otherwise), respectively, that, in
accordance with GAAP should be classified as current assets or current
liabilities, respectively, on Borrowers' balance sheet, including reserves for
liabilities in respect of workers' compensation claims, but excluding any
current portion of Parent's liabilities under the Preferred Stock issued in the
Preferred Stock Transaction that would otherwise be treated as a current
liability under GAAP.
"CURRENT RATIO" means the ratio of Current Assets (excluding any
amounts due from Affiliates) to Current Liabilities (excluding from Current
Liabilities for the purpose of this definition of Current Ratio, the current
portion of any long-term Indebtedness for Borrowed Money and amount amounts due
to Affiliates).
"DEBT SECURITIES" means Securities in the nature of Indebtedness,
whether or not convertible into or exchangeable for Capital Stock.
"DEFAULT" means any event or occurrence which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.
"DEFAULT INTEREST RATE" means an annual rate of interest which shall
(to the extent permitted by applicable law) at all times be equal to three
percent (3%) above the applicable Interest Rate for a Loan; PROVIDED THAT any
amount (other than principal of and interest on the Loans) payable by the Credit
Parties under the Loan Documents which is not paid when due shall bear interest
at the Default Interest Rate based upon the Prime Rate Loans Interest Rate in
effect at such time and from time to time.
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"DEFAULTING LENDER" shall mean any Lender with respect to which a
Lender Default is in effect.
"DOCUMENTS" mean any "documents," as such term is defined in Section
9-105(1)(f) of the UCC, now owned or existing or hereafter arising or acquired.
"EBITDA" for any period shall mean, without duplication, (i) Net
Income; PLUS (ii) for such period any Interest Expense deducted in the
determination of Net Income; PLUS (iii) any income, ad valorem, and franchise
taxes deducted in the determination of Net Income; PLUS (iv) amortization and
depreciation and other non-cash charges deducted in determining Net Income for
such period; PLUS (v) extraordinary and nonrecurring losses, losses on sales of
assets (other than sales of inventory in the ordinary course of business) and
unrealized gains from changes in currency; MINUS (vi) the sum for such period of
interest income, extraordinary and nonrecurring gains, gains from sales of
assets (other than sales of inventory in the ordinary course of business) and
unrealized losses from changes in currency; PROVIDED THAT with respect to any
Reference Period that includes the effect of the Transactions or any Permitted
Acquisition before a full Reference Period has elapsed after the closing date of
the Transactions or any Permitted Acquisition, as the case may be, Parent may
include in its calculation of EBITDA the pro forma historical EBITDA, determined
on a basis consistent with this Agreement, of any Person or business acquired in
the Transactions or Permitted Acquisitions, as the case may be.
"EFFECTIVE DATE" shall mean the date on which Borrowers and each of
Lenders shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to Agent at the Head Office of Agent or, in
the case of Lenders, shall have given to Agent telephonic (confirmed in
writing), written telex or facsimile transmission notice (actually received) at
such office that the same has been signed and mailed or sent by overnight
courier to it.
"EMPLOYEE BENEFIT PLAN" means an "employee benefit plan" as defined in
Section 3(3) of ERISA.
"ENVIRONMENTAL LAWS" means individually or collectively any local,
state or federal law, statute, rule, regulation, order, ordinance, common law,
permit or license term or condition, or state superlien or environmental
clean-up or disclosure statutes pertaining to the environment or to
environmental contamination, regulation, management, control, treatment,
storage, disposal, containment, removal, clean-up, reporting, or disclosure,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as now or hereafter amended
(including, but not limited to, the Superfund Amendments and Reauthorization Act
("SARA")); the Resource Conservation and Recovery Act ("RCRA"), as now or
hereafter amended (including, but not limited to, the Hazardous and Solid Waste
Amendments of 1984); the Toxic Substances Control Act ("TSCA"), as now or
hereafter amended; the Clean Water Act, as now or hereafter amended; the Safe
Drinking Water Act, as now or hereafter amended; or the Clean Air Act, as now or
hereafter amended.
"EQUIPMENT" means any "equipment," as such term is defined in Section
9-109(2) of the UCC, now owned or hereafter acquired and shall include, without
limitation, any and all
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22
additions, substitutions, and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts and accessories
installed thereon or affixed thereto.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock or that are measured by the value of
Capital Stock (but excluding Debt Securities convertible into, or exchangeable
for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974 and
regulations issued thereunder, as amended from time to time and any successor
statute.
"ERISA AFFILIATE" means, in relation to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Internal Revenue Code of
1986, as amended.
"ERISA LIABILITIES" means the aggregate of all unfunded vested benefits
under any employee pension benefit plan, within the meaning of Section 3(2) of
ERISA, of Borrowers or any ERISA Affiliate of Borrowers under any Plan covered
by ERISA that is not a Multiemployer Plan and all potential withdrawal
liabilities of any thereof under all Multiemployer Plans.
"EVENT OF DEFAULT" means any event or condition described in Section
9.1 of this Agreement.
"EXCESS CASH FLOW" means, for any period, the total of the following
for Borrowers and their Subsidiaries on a Consolidated basis, each calculated
(without duplication) for such period: (i) Cash Flow; MINUS (ii) scheduled
amortization of principal and interest and all voluntary prepayments of long
term Indebtedness for Borrowed Money actually paid (it being understood that no
voluntary prepayment of the Loans shall be included in this clause (ii)); MINUS
(iii) cash dividends and distributions paid on the Capital Stock of Borrowers
and their Subsidiaries to the extent permitted under this Agreement; MINUS (iv)
increases in Working Capital; and PLUS (v) decreases in Working Capital.
"EXTRAORDINARY DISPOSITION" means any sale, lease, transfer or other
disposition or conversion of assets, other than in the ordinary course of
business, including but not limited to any sale of assets or sale of stock or
sale of other rights in which any Credit Party has any ownership interest, any
merger, consolidation, or liquidation of a corporation, partnership or limited
liability company of the interests therein of any Credit Party, any Casualty
Loss, and whether in one transaction or event or a series of related or
unrelated transactions or events.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate 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 Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business 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 Agent.
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"FEE MORTGAGES" means the real estate mortgages or deeds of trust
granted from time to time by any Credit Party to Agent to secure the Loans, in
form and content reasonably acceptable to Agent and the Requisite Lenders, and
as they may be amended or supplemented from time to time.
"FEMA" means the Federal Emergency Management Agency, of any similar
successor agency of the federal government.
"FIXED CHARGES" means, for any period, the following, each calculated
for such period, without duplication: (i) Interest Expense paid or accrued,
MINUS (ii) interest income earned or accrued by Borrowers as determined in
accordance with GAAP, PLUS (iii) scheduled payments of principal with respect to
all Indebtedness for Borrowed Money of Borrowers including the principal
component of any cash payments made on any Capital Lease, PLUS (iv) dividends
paid in cash on the Preferred Stock issued in the Preferred Stock Transaction.
"GENERAL INTANGIBLES" means any "general intangibles" as such term is
defined in Section 9-106 of the UCC, now owned or hereafter acquired and, in any
event, shall include, without limitation, all right, title and interest now in
existence or hereafter arising in or to all customer lists, trademarks, patents,
rights in intellectual property, trade names, copyrights, trade secrets,
proprietary or confidential information, inventions and technical information,
procedures, designs, knowledge, know-how, software, data bases, data, processes,
models, drawings, materials, and records now owned or hereafter acquired, and
any and all goodwill and rights of indemnification.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles in the United States of America in effect from
time to time, consistently applied; PROVIDED THAT determinations in accordance
with GAAP for purposes of Article 7 are subject (to the extent provided therein)
to Section 1.1(c) and Section 6.1(m).
"GENERALLY ACCEPTED AUDITING STANDARDS" or "GAAS" means generally
accepted auditing standards in the United States of America in effect from time
to time.
"GUARANTEED PENSION PLAN" means any pension plan maintained by
Borrowers or an ERISA Affiliate of Borrowers, or to which Borrowers or an ERISA
Affiliate contributes, some or all of the benefits under which are guaranteed by
the United States Pension Benefit Guaranty Corporation ("PBGC").
"GUARANTOR COLLATERAL ASSIGNMENT" means any Collateral Assignment of
Intellectual Property executed by a Subsidiary to Agent, as collateral agent,
for the ratable benefit of Lenders pursuant to Section 6.20.
"GUARANTOR SUBSIDIARY" means each Subsidiary of Borrowers identified as
such on SCHEDULE 5.1(C) and any other Subsidiary that Agent and the Requisite
Lenders require to become a Guarantor Subsidiary in connection with a Permitted
Acquisition or which otherwise becomes a Guarantor Subsidiary pursuant to this
Agreement.
"GUARANTY" means any Guaranty executed by a Guarantor Subsidiary in
favor of Agent and Lenders pursuant to Section 4.1(i) and/or Section 6.20.
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"HAZARDOUS SUBSTANCES" means any and all hazardous and toxic
substances, wastes or materials, any pollutants, contaminants, or dangerous
materials (including, but not limited to, polychlorinated biphenyls, friable
asbestos, volatile and semi-volatile organic compounds, oils, petroleum products
and fractions, and any materials which include hazardous constituents or become
hazardous, toxic, or dangerous when their composition or state is changed), or
any other similar substances or materials which are included under or regulated
by any Environmental Law.
"HEAD OFFICE" means, in relation to Agent, the head office of The
Provident Bank located at One East Fourth Street, Cincinnati, Ohio 45202 or such
office designated in writing to Borrowers and Lenders by Provident or any
successor Agent.
"INACTIVE SUBSIDIARY" means each Subsidiary of Borrowers identified as
such on SCHEDULE 5.1(C).
"INDEBTEDNESS" means, in relation to any Person, at any particular
time, all of the obligations of such Person which, in accordance with GAAP,
would be classified as indebtedness upon a balance sheet including any footnote
thereto of such Person prepared at such time (other than the Preferred Stock
issued pursuant to the Preferred Stock Transaction), and in any event shall
include, without limitation, and without duplication:
(i) all indebtedness of such Person arising or incurred under
or in respect of (A) any guaranties (whether direct or indirect) by such Person
of the indebtedness, obligations or liabilities of any other Person, or (B) any
endorsement by such Person of any of the indebtedness, obligations or
liabilities of any other Person (otherwise than as an endorser of negotiable
instruments received in the ordinary course of business and presented to
commercial banks for collection of deposit), or (C) the discount by such Person,
with recourse to such Person, of any of the indebtedness, obligations or
liabilities of any other Person;
(ii) all indebtedness of such Person arising or incurred under
or in respect of any agreement, contingent or otherwise made by such Person (A)
to purchase any indebtedness of any other Person or to advance or supply funds
to the payment or purchase of any indebtedness of any other Person, or (B) to
purchase, sell or lease (as lessee or lessor) Property, products, materials or
supplies or to purchase or sell transportation or services, primarily for the
purpose of enabling any other Person to make payment of any indebtedness of such
other Person or to assure the owner of such other Person's indebtedness against
loss, regardless of the delivery or non-delivery of the Property, products,
materials or supplies or the furnishing or non-furnishing of the transportation
or services, or (C) to make any loan, advance, capital contribution or other
investment in any other Person for the purpose of assuring a minimum equity,
asset base, working capital or other balance sheet condition for or as at any
date, or to provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner invest in
any other Person;
(iii) all indebtedness, obligations and liabilities secured by
or arising under or in respect of any Lien, upon or in Property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such indebtedness, obligations and liabilities;
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(iv) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to Property acquired by
such Person, even though the rights and remedies of the seller or lender (or
lessor) under such agreement in the event of default are limited to repossession
or sale of such Property; and
(v) all indebtedness arising or incurred under or in respect
of any Contingent Obligation.
"INDEBTEDNESS FOR BORROWED MONEY" means at any particular time, all
Indebtedness (i) in respect of any money borrowed; (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; or (iv) Capital
Lease Obligations.
"INITIAL ADVANCE LENDER" means each Lender having an "Initial Advance
Commitment" set forth opposite such Lender's name on SCHEDULE A and shall
include any other single Lender to whom an Initial Advance Lender has
transferred its entire Initial Advance Loan.
"INITIAL ADVANCE COMMITMENT" means, with respect to each Initial
Advance Lender, the amount set forth opposite such Lender's name in SCHEDULE A
as its "Initial Advance Commitment" or as the same may be adjusted pursuant to
Section 2.2(a) and further adjusted from time to time as a result of assignments
to or from the Initial Advance Lender pursuant to Section 10.19.
"INSTRUMENTS" mean any "instrument," as such term is defined in Section
9-105(1)(i) of the UCC, now owned or hereafter acquired.
"INTELLECTUAL PROPERTY" means with respect to any Person, all right,
title and interest of such Person in and to all Copyrights, Trademarks, Patents
and Mask Works, together with all right, title and interest of such Person in
and to (a) all inventions, processes, production methods, proprietary
information, know-how and trade secrets; (b) all licenses or user or other
agreements granted to any obligor with respect to any of the foregoing, in each
case whether now or thereafter owned or used including, without limitation, the
licenses or other agreements with respect to Copyrights, Trademarks, Patents and
Mask Works; (c) all information, customer lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and automatic
machinery, software, programs and products; (d) all field repair data, sales
data and other information relating to sales or service of products now or
hereafter manufactured; (e) all accounting information and all media on which or
in which any information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data; (f) all licenses, consents, permits,
variances, certifications and approvals of governmental agencies now or
hereafter held; (g) all license fees and royalties from the use of the
foregoing; (h) any claims for damages (past, present or future) or infringement
of any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above; (i) all causes of action, claims and
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warranties now or hereafter owned or acquired in respect of any of the items
listed above; and (j) all goodwill connected with and symbolized by any of the
foregoing.
"INTEREST EXPENSE" means, for any period, the total amount of all
charges for the use of funds (whether characterized as interest, debt service or
otherwise) payable during such period with respect to all Indebtedness for
Borrowed Money of Borrowers and their Subsidiaries for such period, including
the amortization of debt discounts and the amortization of all fees payable in
connection with the incurrence of such Indebtedness.
"INTEREST PERIOD" means the interest period applicable to a LIBOR Loan,
as determined pursuant to Section 2.13.
"INTEREST RATE" means, (i) with respect to a Prime Rate Loan, the rate
of interest per annum equal to one percent (1.00%) in excess of the Prime Rate;
and (ii) with respect to a LIBOR Loan, the rate of interest per, annum equal to
three and one-half percent (3.50%) in excess of the LIBOR Base Rate.
"INVENTORY" means, with respect to any Person, such Person's inventory,
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in such Person's
business, wherever located and whether in the possession of such Person or any
other Person; (ii) all goods, wares and merchandise, finished or unfinished,
held for sale or lease or leased or furnished or to be furnished under contracts
of service, wherever located and whether in the possession of such Person or any
other Person; and (iii) all goods returned to or repossessed by such Person.
"INVESTMENT" means all investments in any other Person by stock
purchase, capital contribution, loan, advance, guaranty of any Indebtedness or
creation or assumption of any other liability in respect of any Indebtedness of
such other Person (including, without limitation, any liability of any kind
described in clause (i) or (ii) of the definition of the term "Indebtedness" set
forth in this Section 1.2), or the transfer or sale of Property (otherwise than
in the ordinary course of the business) to any other Person for less than
payment in full in cash of the transfer or sale price or the fair value thereof
(whichever of such price or value is higher).
"LEASEHOLD MORTGAGES" means the Leasehold Mortgages granted from time
to time by the Credit Parties to Agent to secure the Loans in form and content
reasonably acceptable to Agent and the Requisite Lenders, and as they may be
amended or supplemented from time to time.
"LEGAL REQUIREMENTS" means all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards, permits,
licenses, authorizations, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, and officials
and officers thereof, that are now or at any time in the future in effect.
"LENDER DEFAULT" means (i) the refusal (which has not been retracted)
of a Lender in violation of its obligations under this Agreement to make
available its portion of its Commitment for Loans or Letters of Credit, or (ii)
a Lender having notified Agent and/or Borrowers that it does not intend to
comply with such obligations, in the case of either (i) or (ii) as a result of
the
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appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"LENDERS" means, collectively, the banks and lending institutions set
forth on SCHEDULE A and their respective successors and assigns; and "LENDER""
means any one of Lenders.
"LETTER OF CREDIT ISSUER" means a Lender that is requested by
Borrowers, is approved by Agent and agrees to act as a Letter of Credit issuer
pursuant to Section 11.2.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"LIBOR BASE RATE" means with respect to each Interest Period for a
LIBOR Loan, the rate per annum at which deposits in U.S. Dollars are offered to
the LIBOR Office of Agent two (2) Business Days prior to the beginning of such
Interest Period by major banks in the London interbank eurodollar market as at
or about the relevant local time of such LIBOR Office, for delivery on the first
day of such Interest Period as indicated by Bloomberg, Rueters America or other
comparable internationally recognized offer rate service utilized by Agent, for
the number of days comprised therein and in an amount equal to the amount of
LIBOR Loan to be outstanding during such Interest Period. As used herein,
"relevant local time" as to any LIBOR Office means 11:00 a.m., London time, when
such LIBOR Office is located in Europe or the Middle East, and 10:00 a.m., Head
Office local time, when such LIBOR Office is located in North America or the
Caribbean.
"LIBOR LOAN" means a Loan having an Interest Rate based upon LIBOR.
"LIBOR OFFICE" means with respect to any Lender the office or offices
selected by such Lender which shall be making or maintaining the LIBOR Loans of
such Lender hereunder or such other office or offices through which such Lender
determines its LIBOR Base Rate. A LIBOR Office of any Lender may be, at the
option of such Lender, either a domestic or foreign office.
"LICENSES AND PERMITS" means all licenses, permits, registrations and
recordings thereof and all applications incorporated into such licenses, permits
and registrations now owned or hereafter acquired by Borrowers and their
Subsidiaries and required from time to time for the business operations of
Borrowers and their Subsidiaries.
"LIEN" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Documents, the Letter of Credit Documents, and any other agreement, instrument,
certificate or document executed in connection with or pursuant to this
Agreement whether concurrently herewith or subsequent hereto.
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"LOANS" mean, collectively, the Initial Advance Loan and each of the
Acquisition Loans, each singly a "Loan" made or to be made to Borrowers by
Lenders pursuant to this Agreement.
"LOAN YEAR" means each period of twelve (12) consecutive months,
commencing on the Closing Date and on each anniversary thereof.
"MANAGEMENT SHAREHOLDERS" means those shareholders of Parent who are
executive management employees of Parent and Mucho.com on the Closing Date.
"MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.
"MATERIAL ADVERSE EFFECT" means any or all of the following: (i) any
material adverse effect on the performance, business, operations, properties,
prospects, assets, nature of assets, liabilities or condition (financial or
otherwise) any of the Parent or the Material Subsidiaries, individually, or on
all of the Credit Parties, taken as a whole; (ii) any material adverse effect on
the ability of any of the Parent or the Material Subsidiaries, individually, or
on all of the Credit Parties, taken as a whole, to perform its or their
obligations under the Loan Documents to which it is or they are a party; (iii)
any material adverse effect on the ability of any of the Parent or the Material
Subsidiaries, individually, or on all of Credit Parties, taken as a whole, to
pay their respective liabilities and obligations as they mature or become due;
or (iv) any material adverse effect on the validity, effectiveness or
enforceability, as against any Credit Party, of any of the Loan Documents to
which it is a party.
"MATERIAL LEASE" means any lease under which Borrowers or their
Subsidiaries shall lease (as lessee) or acquire the right to possess and/or use
any Real Estate or other Property or any other similar agreement (whether
written or oral) pursuant to which any Borrower or Subsidiary pays an annual
lease payment or rental payment equal to or greater than One Hundred Twenty
Thousand Dollars ($120,000) or which otherwise is material to the operation of
the business of Borrowers.
"MATERIAL SUBSIDIARY" means each Subsidiary of Borrowers identified as
such on SCHEDULE 5.1(C) and any other Subsidiary that Agent and the Requisite
Lenders require to become a Material Subsidiary in connection with a Permitted
Acquisition or otherwise.
"MATURITY DATE" shall mean the 180th day following the fifth (5th)
anniversary of the Closing Date, or such earlier date on which the Total
Commitment is terminated.
"MERGER" shall have the meaning set forth in the Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated
June 16, 2000 by and among the Parent, Merger Sub and Mucho, as amended and in
effect from time to time.
"MERGER SUB" shall mean Team Merger Corporation, a Nevada corporation
and wholly-owned subsidiary of Parent.
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"MINIMUM BORROWING AMOUNT" shall mean, for Acquisition Loans, which are
(A) Prime Rate Loans, One Million Dollars ($1,000,000), with minimum increments
thereafter of One Hundred Thousand Dollars ($100,000), or (B) LIBOR Loans, One
Million Dollars ($1,000,000), with minimum increments thereafter of Two Hundred
Fifty Thousand Dollars ($250,000).
"MORTGAGES" shall mean collectively the Fee Mortgages and the Leasehold
Mortgages, and each individually a "Mortgage".
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of Borrowers and their
Subsidiaries, or any ERISA Affiliate of Borrowers and their Subsidiaries.
"NET INCOME" means, for any period, the aggregate of the net income (or
net loss) of Borrowers and their Subsidiaries for such period, determined in
accordance with GAAP, but excluding, without duplication: (i) the income of any
Person in which any Borrower or Subsidiary has an ownership interest (other than
a Subsidiary of such Borrower or Subsidiary), unless received by such Borrower
or Subsidiary in a cash distribution; (ii) any after-tax gains or losses
attributable to dispositions of assets; (iii) the income of any Subsidiary of
any Borrower to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at that time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary; and (iv) any after-tax extraordinary non-cash gains or
extraordinary non-cash losses.
"NET PROCEEDS" means the aggregate proceeds paid in cash or Cash
Equivalents received by Borrowers and their Subsidiaries in respect of any
Extraordinary Disposition, net of direct costs relating to such Extraordinary
Disposition (including without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions in any tax sharing
arrangements), amounts required to be applied in payment of Indebtedness secured
by a Lien incurred in accordance with this Agreement on the assets or assets
that are subject of such Extraordinary Disposition and which Indebtedness is
required pursuant to the terms of the instrument governing such Indebtedness or
Lien or in order to obtain the necessary consent to such sale to be repaid in
connection with such Extraordinary Disposition and any reserve for adjustment in
respect of the sale price of or other liability in respect of such asset or
assets.
"NET WORTH" means, at any date, Consolidated stockholders' equity
(including the par value or stated value of all outstanding capital stock,
additional paid-in capital and retained earnings) of Borrowers and their
Subsidiaries determined in accordance with GAAP, except that there shall be
deducted therefrom any amount of treasury stock reflected as an asset of any
Borrower or any Subsidiary.
"NOTES" mean, collectively, the Initial Advance Notes and the
Acquisition Notes, each of which are to be dated, executed and delivered to
Lenders by Borrowers on the Closing Date. "Note" shall mean any one of the
Notes, unless specifically identified.
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"OBLIGATIONS" means, collectively, all of the indebtedness,
obligations, covenants, promises, agreements and liabilities existing on the
date hereof or arising from time to time hereafter, whether direct, indirect,
absolute, contingent, joint or several, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, of the Credit Parties to Agent or any Lenders (i) in respect of the
Loans made pursuant to this Agreement; or (ii) under or in respect of any one or
more of the Loan Documents. Obligations shall also include all interest, charges
and other fees chargeable hereunder to Borrowers or due hereunder from Borrowers
to Lenders from time to time and all costs and expenses referred to in Section
12.6 herein.
"PARTICIPATION PERCENTAGE" means, in relation to each Lender, the
percentage set forth with respect to such Lender on SCHEDULE A with respect to
each Loan.
"PATENTS" shall mean all of the following in which any of Borrowers and
their Subsidiaries now holds or hereafter acquires any interest: (i) all letters
patent of the United States or any country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state or territory thereof or any other country; (ii) all
improvements, divisions, renewals, reissues, continuations,
continuations-in-part or extensions; (iii) all income, royalties, damages and
payments now and hereafter due and/or payable with respect to the foregoing,
including without limitation damages and payments for past or future
infringements thereof; (ix) all rights to sue for past, present and future
infringements of the foregoing; and (v) all rights corresponding to the
foregoing throughout the world.
"PERMITTED ACQUISITION" means any Acquisition as to which Agent and the
Requisite Lenders have given their written approval in their sole discretion and
as to which all of the following conditions are satisfied:
(i) such Acquisition involves a line or lines of business
which, in the opinion of the Requisite Lenders, is or are complementary to the
line or lines of business in which a Borrower or a Subsidiary, as the case may
be, making the Acquisition is engaged on the Effective Date;
(ii) such Acquisition is not actively opposed by the Board of
Directors (or similar governing body) of the selling Person or the Person whose
equity interests are to be acquired;
(iii) if, as a result of such Acquisition, a Person becomes a
Subsidiary of a Borrower, such Subsidiary shall be a Wholly-Owned Subsidiary;
(iv) the acquired business shall have positive operating
income for (A) each of the three (3) full fiscal years most recently ended and
(B) the twelve (12) month period ended on the last day of the last month ended
prior to the effective date of such Permitted Acquisition;
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(v) after giving effect to such Acquisition on a pro forma
basis, no Default or Event of Default exists, including but not limited to any
Default of the financial covenants contained in Article 7 (which compliance
shall be evidenced by the execution and delivery of a pro forma Compliance
Certificate by Borrowers to Agent at least fourteen days prior to the closing of
the Permitted Acquisition), such pro forma financial covenants being determined:
(A) as if (x) such Acquisition had been completed at the
beginning of the most recent period of four consecutive fiscal quarters of
Borrowers for which financial information for Borrowers and the business or
Person to be acquired, is available, and (y) any such Indebtedness incurred to
finance such Acquisition had been outstanding for such period; and
(B) without giving effect to any credit for unobtained or
unrealized gains in connection with such Acquisition, but taking into account
such adjustments to the overhead of such properties and assets as may reasonably
be determined and specified by Borrowers to reflect the overhead generally
applicable to similar properties and assets owned by Borrowers and the
Subsidiaries, as and to the extent Agent determines such adjustments to be
reasonable and appropriate under the particular circumstances);
(vi) the funding for the Permitted Acquisition shall be
acceptable in all respects to Agent and the Requisite Lenders in their sole
discretion; and
(vii) the conditions set forth in Section 4.3(e) shall have
been satisfied.
"PERMITTED LIENS" means those Liens and encumbrances permitted
hereunder pursuant to Section 8.8.
"PERSON" shall include an individual, a company, a corporation, an
association, a partnership, a joint venture, an unincorporated trade or business
enterprise, a trust, an estate, or other legal entity or a government (national,
regional or local), court, arbitrator or any agency, instrumentality or official
of the foregoing.
"PLAN" means any pension plan as defined in Section 3(2) of ERISA and
any multiemployer or single-employer plan as defined in Section 4001 of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute by) a Borrower or a Subsidiary or an ERISA Affiliate, and each such
plan for the five year period immediately following the latest date on which a
Borrower, or a Subsidiary or an ERISA Affiliate maintained, contributed to or
had an obligation to contribute to such plan.
"PLEDGE AGREEMENT" means a stock pledge agreement to be made pursuant
to this Agreement by a Credit Party to Agent, for the ratable benefit of
Lenders, with respect to Pledged Stock substantially in the form of EXHIBIT F
hereto.
"PLEDGED STOCK" means all of the Capital Stock of any Subsidiary of any
Borrower or other Subsidiary whether now existing or hereafter formed or
acquired.
"PREFERRED STOCK", as applied to the Capital Stock of any Person, means
Capital Stock of such Person (other than Common Stock of such Person) of any
class or classes (however
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designated) that rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"PREFERRED STOCK TRANSACTION" means the issuance of 100,000 shares of
Series A Preferred Stock, par value One Hundred Dollars ($100.00), of the Parent
pursuant to and in accordance with that certain Securities Purchase Agreement
dated as of the Closing Date by and among Stonehenge Opportunity Fund, LLC, the
Parent and the other purchasers named therein, and all other documents referred
to therein, as the same may be amended and in effect from time to time, in an
aggregate amount of not less than Ten Million Dollars ($10,000,000).
"PREMISES" means collectively, all real property and leasehold
interests now or hereafter acquired by Borrowers and their Subsidiaries,
including, without limitation, all the Premises as defined in the Mortgages, if
any.
"PRIME RATE" means the rate of interest announced from time to time by
Agent as its prime rate at its Head Office, whether or not Agent shall at times
lend to other borrowers at lower rates of interest, or, if there is no such
prime rate, then such other rate as may be substituted by Agent for its Prime
Rate.
"PRIME RATE LOAN" means a Loan having an Interest Rate based upon the
Prime Rate.
"PRINCIPAL OFFICER" means any officer of a Borrower whose title is
(including any title which is substantially the same as): (i) Chief Executive
Officer, (ii) President, (iii) Chief Financial Officer or Vice
President-Finance, (iv) Chief Accounting Officer, or (v) Treasurer.
"PROCEEDS" means "proceeds," as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include, without limitation, (i)
any and all proceeds of any insurance, indemnity, warranty, or guaranty payable
from time to time with respect to any of the Collateral, and (ii) any and all
payments (in any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation, seizure, or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau, or agency (or any Person acting under color of governmental
authority).
"PROJECTIONS" means the projected balance sheets, profit and loss
statements and cash flow statements, all prepared by or on behalf of Borrowers'
senior management consistent with Borrowers' historical financial statements,
separately for (a) Parent and its direct and indirect Subsidiaries on a
Consolidated basis, (b) Parent and its direct and indirect Subsidiaries (other
than Mucho.com and its direct and indirect Subsidiaries) on a Consolidated
basis, and (c) Mucho.com and its direct and indirect Subsidiaries on a
Consolidated basis, in the case of each of (a), (b) and (c), together with, if
requested by Agent, appropriate supporting details and statements of underlying
assumptions.
"PROPERTY" means all types of real, personal, tangible, intangible or
mixed property.
"PRO RATA SHARE" means, in relation to any particular item, the share
of any Lender in such item, which shall be in the same proportion which the
aggregate amount of all of the obligations owing to such Lender with respect to
such item at such time shall bear to the
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aggregate amount of all of the obligations owing to all of Lenders with respect
to such item at such time net of any and all charges or fees due and payable to
Agent under the Loan Documents.
"REAL ESTATE" means all real property owned by Borrowers and their
Subsidiaries and all real property hereafter acquired by Borrowers and their
Subsidiaries, together with all fixtures, rights of way, privileges, liberties,
tenements, hereditaments, and appurtenances belonging or in any way appertaining
thereto, all easements now or hereafter benefiting such real property and all
royalties and rights appertaining to the use and enjoyment of such real
property, together with all of the buildings, structures, and other improvements
thereto.
"REFERENCE PERIOD" means, with respect to a particular Computation
Date, the period of four (4) consecutive calendar quarters ending on such
Computation Date.
"REQUISITE LENDERS" means at such times as there are any Loans
outstanding, Lenders whose aggregate Pro Rata Shares of the outstanding Loans
are greater than or equal to sixty-six and two-thirds percent (66 2/3%) of the
aggregate amount of the outstanding Loans, and at all other times, Lenders whose
aggregate Credit Commitments are greater than or equal to sixty-six and
two-thirds percent (66 2/3%) of the aggregate Credit Commitments of all Lenders;
PROVIDED THAT if there are no more than two (2) Lenders, such percentages shall
be one hundred percent (100%).
"RESTRICTED PAYMENT" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of a
Borrower or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of Capital Stock to the holders
of that class; (b) any redemption, conversion, exchange, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of a Borrower or any of
its Subsidiaries now or hereafter outstanding; (c) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, conversion,
exchange, purchase, retirement, defeasance, sinking fund or similar payment with
respect to, any subordinated indebtedness; and (d) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of Capital Stock of a Borrower or any of its
Subsidiaries now or hereafter outstanding.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"SECURITIES" means any stock, shares, voting trust certificates, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participation
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITY AGREEMENT" means any Security Agreement executed by a
Guarantor Subsidiary to Agent for the ratable benefit of Lenders pursuant to
Section 4.1(j), Section 4.3(e) or Section 6.20.
"SECURITY DOCUMENTS" means, collectively, this Agreement, the
Mortgages, the Pledge Agreement, the Collateral Assignments, the Security
Agreements, the Guaranties and each other
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agreement, assignment or instrument creating or purporting to create a lien in
favor of Agent for the ratable benefit of Lenders.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities as they mature in the normal course of business, (iv) such
Person does not intend to, and does not believe that it will, incur debts or
other liabilities beyond such Person's ability to pay as such debts and other
liabilities mature, and (v) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which such
Person is engaged. For purposes of this definition of Solvent, the phrase "debts
and other liabilities" shall mean any liability for a claim, and "claim" shall
mean (i) a right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
"STANDARD FLOOD HAZARD DETERMINATION FORM" means Form 81-93 or any
successor or replacement thereof developed by FEMA pursuant to Section 528 of
the National Flood Insurance Reform Act of 1994 (42 U.S.C. 1365(a)), for
determining whether a building or structure is located in an area identified as
an area having special flood hazards, whether flood insurance is required and
whether flood insurance is available under 42 U.S. C. 4001, et seq.
"STATED AMOUNT" means, with respect to a Letter of Credit, the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"SUBSIDIARY" means, as to any Person, a corporation, partnership or
other entity of which shares of Capital Stock or other ownership interests
having ordinary voting power (other than Capital Stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of a Borrower and a direct or indirect
Subsidiary or Subsidiaries of any Subsidiary of a Borrower (including any
existing Subsidiary that now is or hereafter becomes a Borrower).
"TENDER OFFER" has the meaning set forth in the Merger Agreement.
"TERMINATION DATE" means (A) with respect to the Loans, the earlier of
(i) the Maturity Date; (ii) the date upon which the entire principal of the
Notes shall become due pursuant to the
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provisions hereof (whether as a result of acceleration by Agent or the Requisite
Lenders or otherwise); or (iii) the date upon which the Commitments terminate
pursuant to Section 9.2 hereof; and (B) with respect to each Letter of Credit,
the earlier of (i) the Maturity Date; (ii) the date upon which all Letter of
Credit Outstandings shall become due in their entireties pursuant to the
provisions hereof (whether as a result of acceleration by Agent or the Requisite
Lenders or otherwise); (iii) the date on which the Loans shall be paid in full;
or (iv) the stated maturity of such Letter of Credit.
"TERMINATION EVENT" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, but not including any such
event for which the 30 day notice requirement has been waived by applicable PBGC
regulation; or (ii) the withdrawal of a Borrower or an ERISA Affiliate of a
Borrower from a Guaranteed Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or (iii) the
filing of a notice of intent to terminate a Guaranteed Pension Plan or the
treatment of a Guaranteed Pension Plan amendment as a termination under Section
4041 of ERISA; or (iv) the institution of proceedings to terminate a Guaranteed
Pension Plan by the Pension Benefit Guaranty Corporation; or (v) the withdrawal
or partial withdrawal of a Borrower or an ERISA Affiliate of a Borrower from a
Multiemployer Plan; or (vi) any other event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Guaranteed Pension Plan.
"TOTAL ACQUISITION COMMITMENT" means the sum of the Acquisition
Commitments of all of Lenders.
"TOTAL COMMITMENT" means the sum of the Commitments of all of Lenders.
"TOTAL COMMITMENT AVAILABILITY" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the aggregate original principal
amounts of all Acquisition Loans and the Initial Advance Loan and all Letter of
Credit Outstandings then outstanding.
"TRADEMARKS" shall mean all of the following in which any of Borrowers
and their Subsidiaries now holds or hereafter acquires any interest: (i) all
trademarks, trade names, corporate names, business names, trade styles, service
marks, logos, domain names, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, all registrations and recordings thereof,
and all applications in connection therewith, including, but not limited to,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof or any other country; (ii) all reissues, extensions
or renewals of the foregoing; (iii) all income, royalties, damages and payments
now and hereafter due and/or payable with respect to the foregoing, including
without limitation damages and payments for past or future infringements
thereof; (iv) all rights to sue for past, present and future infringements of
the foregoing; and (v) all rights corresponding to the foregoing throughout the
world.
"TRANSACTION DOCUMENTS" means all agreements, contracts, registration
statements, proxies, instruments, and other written documents evidencing the
Transactions other than the Loan Documents.
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"TRANSACTIONS" means, collectively, the Merger, the Tender Offer, the
Preferred Stock Transaction and the incurrence by Borrowers of the Initial
Advance Loan.
"TYPE" means any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Prime Rate Loan, or a LIBOR Loan denominated
in U.S. Dollars.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Ohio; PROVIDED, HOWEVER, that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of Lender's security interest in any of the Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Ohio, the term "UCC" shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection, or priority and for purposes of
definitions related to such provisions.
"UCC FINANCING STATEMENTS" mean the UCC financing statements naming
Borrowers, as debtors, and Agent, for the ratable benefit of Lenders, as
creditor, which UCC financing statements describe all or some portion of the
Collateral and which together perfect Agent's security interest in the
Collateral.
"UNFUNDED CURRENT LIABILITY" means, with respect to any Plan, the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"UNITED STATES" and "U.S." each mean United States of America.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary at least 95% of
whose Capital Stock, equity interests and partnership interests, other than
director's qualifying shares or similar interests, are owned directly or
indirectly by a Borrower.
"WORKING CAPITAL" means the difference between (i) Current Assets,
excluding cash, Cash Equivalents, prepaid taxes and any amounts due from
Affiliates, and (ii) Current Liabilities, excluding the current portion of any
long term Indebtedness for Borrowed Money, accrued taxes and any amounts due to
Affiliates.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
e-mail electronic transmission, telegraph or cable.
ARTICLE 2
---------
THE LOANS
---------
Section 2.1 COMMITMENTS. Each Lender, severally and not jointly, agrees, upon
the terms and subject to the conditions contained in this Agreement, to make the
Initial Advance
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Loan on the Closing Date in a principal amount equal to such Lender's
Participation Percentage of the aggregate principal amount of such Loan and the
Acquisition Loans to Borrowers from time to time prior to the Termination Date.
Section 2.2 MAKING THE LOANS.
(a) INITIAL ADVANCE LOAN. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
Borrowers herein set forth, each Lender, severally and not jointly, agrees, upon
Borrowers' request in compliance with Section 2.3, to lend to Borrowers on the
Closing Date its Participation Percentage of the Initial Advance Loan. The
maximum amount of the Initial Advance Loan shall be Four Million and 00/100
Dollars ($4,000,000.00) (the "TOTAL INITIAL ADVANCE COMMITMENT"). The Initial
Advance Loan shall be funded in one drawing on the Closing Date. Amounts
borrowed under this Section 2.2(a) and repaid or prepaid may not be reborrowed.
The excess, if any, of the Total Initial Advance Commitment over the actual
amount thereof borrowed by Borrowers ("UNUTILIZED INITIAL ADVANCE AMOUNT") shall
be subtracted from the Total Initial Advance Commitment and added to the
Acquisition Commitments of Lenders ratably in proportion to their Participation
Percentages.
(b) ACQUISITION LOANS. Each Lender will, subject to all the
applicable terms and conditions of this Agreement, make an amount equal to its
Participation Percentage in each Acquisition Loan available to Borrowers at such
times and in such amounts as shall be requested by Borrowers in compliance with
Section 2.3 in respect of Permitted Acquisitions, not to exceed a maximum amount
equal to the Total Acquisition Commitments of Lenders. Amounts borrowed under
this Section 2.2(b) and repaid or prepaid may not be reborrowed. The Acquisition
Commitments shall terminate, to the extent not borrowed, on the second
anniversary of the Closing Date. No Acquisition Loan shall cause the Acquisition
Commitment Availability of all Lenders to be less than zero; provided THAT if
the Acquisition Commitment Availability for any reason becomes less than zero,
Borrowers shall make the mandatory repayments required by Section 2.6(d). No
Acquisition Loan shall be available at any time if after giving effect thereto
Borrowers would be required to make the mandatory repayments required by Section
2.6(d).
Section 2.3 DRAWS, ADVANCES AND SETTLEMENT OF PAYMENTS AND ADVANCES.
(a) On the Closing Date, and upon satisfaction of the
conditions set forth in Section 4.1, Lenders shall make available to Borrowers
the Initial Advance Loan in the amount set forth in the initial Notice of
Borrowing of Borrowers delivered at the Closing.
(b) All advances or disbursements of Acquisition Loan proceeds
shall be effectuated at Borrowers' request either through wire transfer or by
Agent's deposit of such funds in a central disbursement account (the "AGENT
DISBURSEMENT ACCOUNT") of Borrowers maintained with Agent. Any request for
advance by wire transfer may be transmitted to Agent at its Head Office via
facsimile provided Borrowers immediately notify Agent by telephone of such
transmission. All such requests for wire transfer advances shall be made to and
received by Agent not later than 10:00 a.m. Head Office local time on the date
specified on such wire transfer or check request and each such wire transfer or
check request shall be deemed to be a request for an advance on the Acquisition
Loan on the date when received and processed by
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Agent. Borrowers hereby designate the Principal Officers (or any other officer
authorized by Borrowers and designated as such to Agent) acting individually or
jointly to make all requests for draws and advances.
(c) Agent shall promptly notify each Lender of its
Participation Percentage of each Acquisition Loan and the date of such
Borrowing. On the Borrowing date specified in such notice, each Lender shall
make its share of the Borrowing available at the Head Office of Agent for
deposit to such account as Agent shall designate, no later than 1:00 p.m. Head
Office local time in Federal or other immediately available funds. Upon receipt
of the funds to be made available by Lenders to fund any Acquisition Loan
hereunder, Agent shall disburse such funds by depositing them into Agent
Disbursement Account.
(d) Whenever a Borrower desires to incur Acquisition Loans, it
shall give Agent at its Head Office, in the case of any Borrowing of (1) LIBOR
Loans denominated in U.S. Dollars to be made hereunder, prior to 12:00 noon
(local time at its Head Office), at least three Business Days' prior written or
telephonic notice thereof (in the case of telephonic notice, promptly confirmed
in writing if so requested by Agent); or (2) Prime Rate Loans to be made
hereunder, prior to 12:00 noon (local time at its Head Office), at least same
Business Day's prior written or telephonic notice thereof (in the case of
telephonic notice, promptly confirmed in writing if so requested by Agent). Each
such notice (each such notice, a "NOTICE OF BORROWING") shall (if requested by
Agent to be confirmed in writing), be substantially in the form of EXHIBIT G,
and in any event shall be irrevocable and shall specify: (i) the type of
Borrowing which is to be incurred; (ii) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing; (iii) the date of the Borrowing
(which shall be a Business Day); (iv) whether the Borrowing shall consist of
Prime Rate Loans or LIBOR Loans; and (v) if the requested Borrowing consists of
LIBOR Loans, the Interest Period to be initially applicable thereto. If the
Borrowers fail to specify in a Notice of Borrowing the Interest Period for any
LIBOR Loans, such Interest Period shall be deemed to be one month. Agent shall
promptly give each Lender which has a Commitment for such type of Borrowing
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing of such Lender's proportionate share thereof and of the other
matters covered by the Notice of Borrowing relating thereto.
(e) Without in any way limiting the obligation of Borrowers to
confirm in writing any telephonic notice permitted to be given hereunder, Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by Agent in good faith to be from an
Principal Officer of a Borrower entitled to give telephonic notices under this
Agreement on behalf of that Borrower. In each such case, Agent's record of the
terms of such telephonic notice shall be conclusive absent manifest error.
Section 2.4 THE NOTES. The absolute and unconditional obligation of
Borrowers to repay to each Lender its respective Pro Rata Share of the principal
of each Loan and the interest thereon shall be evidenced by a separate
promissory note for each Lender in the amount of its respective Commitment for
each Loan as follows: (i) for the Initial Advance Loan, by a promissory note
substantially in the form of EXHIBIT H with blanks appropriately completed in
conformity herewith (the "INITIAL ADVANCE NOTE"), and (ii) if Acquisition Loans,
by a promissory note substantially in the form of EXHIBIT I with blanks
appropriately completed in conformity herewith (each an "ACQUISITION NOTE" and,
collectively, the "ACQUISITION NOTES"). All payments
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under the Notes shall be made to Agent at its Head Office, for the account of
Lenders, and Agent shall allocate all payments on each Loan received from
Borrowers among all Lenders in accordance with each Lender's Pro Rata Share of
such Loan in accordance with Section 2.7(b).
Section 2.5 INTEREST PAYABLE ON THE LOANS.
(a) DETERMINATION OF INTEREST RATE. Agent shall determine the
Interest Rate in effect from time to time in accordance with the terms of this
Agreement, including but not limited to Section 2.3(d), Section 2.5(c), Section
2.12, Section 2.13, Section 2.14, and Section 2.15. Any change in the Interest
Rate shall, for all purposes of this Agreement and any of the other Loan
Documents, become effective on the effective date of such change as announced by
Agent in accordance with Agent's customary practices. Upon the occurrence of an
Event of Default, of if Agent exercises its rights hereunder to accelerate any
of the Notes pursuant to Section 9.2(b), all LIBOR Loans will be converted to
Prime Rate Loans and Borrowers shall be liable to Lenders and Agent for breakage
compensation in respect thereof as set forth in Section 2.15.
(b) MONTHLY INSTALLMENTS. Borrowers shall pay to Agent, for
the account of Lenders in accordance with their respective Pro Rata Share of
such Loan, monthly in arrears on the first Business Day of each month beginning
with the month following the month in which the Closing Date falls, interest on
the outstanding principal amount of the Loans at the annual rate equal to the
Interest Rate applicable to each such Loan.
(c) INTEREST ON OVERDUE PAYMENTS; DEFAULT INTEREST RATE. If
any amount of principal or interest or any other Obligation is not paid when
due, or upon the occurrence and during the continuance of any Event of Default,
or if Agent exercises its rights hereunder to accelerate any of the Notes
pursuant to Section 9.2(b), the outstanding principal and all accrued and unpaid
interest, as well as any other Obligations due Lenders or Agent hereunder or
under any Loan Document, shall bear interest at the Default Interest Rate, from
the date on which such amount shall have first become due and payable to Lenders
or Agent or the date on which such Event of Default shall have occurred, to the
date on which such amount shall be paid to Lenders or Agent (whether before or
after judgment) or such Event of Default shall have been waived or cured.
Interest will continue to accrue until the Obligations in respect of the payment
are discharged (whether before or after judgment).
Section 2.6 PAYMENTS OF INTEREST; REPAYMENTS AND PREPAYMENTS OF
PRINCIPAL.
(a) PAYMENTS ON THE INITIAL ADVANCE LOAN. Borrowers shall pay
to Agent, for the account of Lenders in accordance with their respective Pro
Rata Share on the Initial Advance Loan, monthly in arrears on the first Business
Day of each month beginning with the month following the month in which the
Closing Date falls, interest on the outstanding principal amount of the Initial
Advance Loan at the annual rate equal to the Interest Rate applicable thereto.
Borrowers shall pay to Agent, and Borrowers hereby authorize Agent to charge the
respective accounts of Borrowers maintained with Agent, beginning on the first
Business Day of the twenty-fifth (25th) calendar month after the month in which
the Closing Date falls and on the first Business Day of each month thereafter,
forty-two (42) equal, consecutive, monthly installments of principal (or such
lesser principal amount of the Initial Advance Loan as shall then be
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outstanding), PLUS accrued and unpaid interest thereon at the Interest Rate
applicable to the Initial Advance Loan; PROVIDED THAT in any event the last
installment of principal on the Initial Advance Loan shall be due and payable on
the Termination Date (if not earlier prepaid) and shall be in an amount
sufficient to pay in full the entire unpaid principal amount of the Initial
Advance Loan.
(b) PAYMENTS ON THE ACQUISITION LOANS. Borrowers shall pay to Agent, for the
account of Lenders in accordance with their respective Pro Rata Share on each
Acquisition Loan, monthly in arrears on the first Business Day of each month
beginning with the month following the month in which such Acquisition Loan was
made ("ACQUISITION LOAN CLOSING DATE"), interest on the outstanding principal
amount of such Acquisition Loan at the annual rate equal to the Interest Rate
applicable thereto. With respect to each Acquisition Loan incurred by Borrowers,
Borrowers shall pay to Agent, and Borrowers hereby authorize Agent to charge the
respective accounts of Borrowers maintained with Agent, beginning on the first
Business Day of the first calendar month after the month in which such
Acquisition Closing Date falls and on the first Business Day of each calendar
month thereafter, such number of installments of principal as shall be necessary
to fully amortize the original principal balance thereof in equal, consecutive,
monthly installments based upon the actual number of months from such beginning
date to and including the Maturity Date (or such lesser principal amount of such
Acquisition Loan as shall then be outstanding), PLUS accrued and unpaid interest
thereon at the Interest Rate applicable to such Acquisition Loan; PROVIDED THAT
in any event the last installment of principal on such Acquisition Loan shall be
due and payable on the Termination Date (if not earlier prepaid) and shall be in
an amount sufficient to pay in full the entire unpaid principal amount of such
Acquisition Loan.
(c) VOLUNTARY PREPAYMENTS OF PRINCIPAL. Borrowers shall have
the right to prepay any or all of their Loans, in whole or in part, without
premium or penalty (except as set forth to the contrary below), from time to
time on the following terms and conditions:
(i) Borrowers shall give Agent at the Head Office written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by Agent) of their intent to prepay the Loans, the
amount of such prepayment and (in the case of LIBOR Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by Agent by:
(x) 12:00 noon (local time at the Head Office) three Business Days prior to the
date of such prepayment, in the case of any prepayment of LIBOR Loans
denominated in Dollars, or (y) 12:00 noon (local time at the Head Office) one
Business day prior to the date of such prepayment, in the case of any prepayment
of Prime Rate Loans, and which notice shall promptly be transmitted by Agent to
each of the affected Lenders;
(ii) in the case of prepayment of any Loan Borrowings, each
partial prepayment of any such Borrowing shall be in an aggregate principal of
at least Five Hundred Thousand Dollars ($500,000) or an integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof;
(iii) no partial prepayment of any Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of such Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto;
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(iv) each prepayment of LIBOR Loans pursuant to this Section 2.6(c) on any date
other than the last day of the Interest Period applicable thereto shall be
accompanied by any amounts payable in respect thereof under Section 2.15; and
(v) Borrowers shall pay the prepayment fees, if any,
required by Section 2.6(l).
(d) IF OUTSTANDING LOANS EXCEED TOTAL COMMITMENT. If on any
date (after giving effect to any other payments on such date) the sum of (i) the
aggregate outstanding principal amount of Acquisition Loans and the Letter of
Credit Outstandings, PLUS (ii) the aggregate outstanding principal amount of
Initial Advance Loan, exceeds the Total Commitment as then in effect, Borrowers
shall prepay on such date that principal amount of Loans in an aggregate amount
at least equal to such excess and conforming in the case of partial prepayments
of any Loans to the applicable requirements as to the amounts of partial
prepayments which are contained in Section 2.6(c). If, after giving effect to
the prepayment of Loans and Unpaid Drawings, the aggregate amount of Letter of
Credit Outstandings exceeds the Total Commitment as then in effect, Borrowers
shall pay to Agent an amount in cash and/or Cash Equivalents equal to such
excess and Agent shall hold such payment as security for the reimbursement
obligations of Borrowers hereunder in respect of Letters of Credit pursuant to a
cash collateral agreement to be entered into in form and substance reasonably
satisfactory to Agent and Borrowers (which shall permit certain investments in
Cash Equivalents satisfactory to Agent and Borrowers until the proceeds are
applied to the Obligations).
(e) PREPAYMENTS FROM EXTRAORDINARY DISPOSITIONS. Immediately
upon receipt by Borrowers or any of their Subsidiaries of Net Proceeds,
Borrowers shall prepay the Loans in an amount equal to the total Net Proceeds
then subject to this Section 2.6(e) in accordance with Section 2.6(k).
Notwithstanding the foregoing, in the event that Borrowers or any of their
Subsidiaries (1) has an accrued tax liability with respect to an Extraordinary
Disposition or (2) reasonably expects the proceeds of such Extraordinary
Disposition to be (i) reinvested within six (6) months of the receipt thereof in
productive assets of a kind then used or useable in the business of Borrowers
and their Subsidiaries, or (ii) in the case of insurance and condemnation
proceeds, utilized within six (6) months of the receipt thereof (or such longer
period as Agent may agree to, such agreement not to be unreasonably withheld if
Borrowers have timely begun and are diligently pursuing the rebuilding or repair
in question but reasonably expect that such rebuilding or repair will not be
completed within such six (6) month period) to repair the loss or damage to or
otherwise rebuild the assets in respect of which the Net Proceeds were paid,
then Borrowers shall deliver such Net Proceeds or portion thereof to Agent to be
held by Agent in a cash collateral account bearing interest payable to Borrowers
at a rate per annum (meaning three hundred sixty (360) days) equal to Agent's
then current rates for similar deposit instruments. Upon Borrowers' request,
Agent and Lenders shall release such Net Proceeds or portion thereof to
Borrowers for payment of the accrued tax liability or for reinvestment, repair
or rebuilding. In the event Borrowers (1) are not required to pay all or any
portion of the accrued tax liability or (2) fail to reinvest such Net Proceeds
or utilize them for repair or rebuilding within six (6) months of the receipt
thereof (or such longer period that may be agreed to pursuant to this Section
2.6(e)), Borrowers authorize and direct Agent and Lenders to apply such
remaining amount of Net Proceeds as a prepayment of the Loans to be applied in
accordance with Section 2.6(k).
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(f) PREPAYMENT FROM EXCESS CASH FLOW. Within one hundred
twenty (120) days after the end of each fiscal year of Borrowers beginning with
the fiscal year ending December 31, 2002, if Borrowers' Indebtedness under this
Agreement, as of the applicable Computation Date, exceeds Borrowers'
Consolidated EBITDA for the applicable Reference Period by more than two (2)
times, Borrowers shall prepay the Loans in an amount equal to fifty percent
(50%) of Excess Cash Flow for such prior fiscal year calculated on the basis of
the audited financial statements for such fiscal year delivered to Lender
pursuant to Section 6.1(c). All such prepayments of the Loans from Excess Cash
Flow shall be applied in accordance with Section 2.6(k). Concurrently with the
making of any such payment, Borrowers shall deliver to Agent a certificate of
Parent's chief executive officer or chief financial officer demonstrating its
calculation of the amount required to be paid.
(g) PREPAYMENT FROM EQUITY AND DEBT SECURITIES OFFERINGS. In
the event that Parent issues Equity Interests and/or Debt Securities the net
proceeds of which, after payment of underwriting discounts and commissions and
other reasonable costs associated therewith, exceed Twenty-five Million Dollars
($25,000,000), no later than the third Business Day following the date of
receipt of the proceeds from any sale of such Equity Interests and/or Debt
Securities (other than: (i) proceeds of the issuance of Parent's Common Stock
received on or before the Closing Date; (ii) proceeds, if any, from the issuance
of Parent's Capital Stock to members of the management of Borrowers or their
Subsidiaries or officers, directors or employees of any of them; (iii) proceeds
from the issuance of Equity Interests to Parent or any Subsidiary of Parent by
any Person that was a Subsidiary of a Borrower immediately prior to such
issuance; (iv) proceeds constituting equity contributions to any Subsidiary of a
Borrower by Borrowers or any of its Subsidiaries; and (v) proceeds from the
Preferred Stock Transaction), Borrowers shall prepay the Loans in an amount
equal to the lesser of (1) the amount of such Net Proceeds or (2) the amount of
the Obligations then outstanding. Prepayments made under this Section 2.6(g)
shall be applied to the Loans in accordance with Section 2.6(k).
(h) PREPAYMENTS FROM TAX REFUNDS. If during any fiscal year
Borrowers, Borrowers and the Subsidiaries have received proceeds from one or
more tax refunds (to the extent associated with net operating loss carrybacks),
then not later than the third Business Day following the date of receipt of such
proceeds, Borrowers shall repay the Loans in an amount equal to the lesser of
such proceeds or the amount of Obligations then outstanding. Prepayments made
under this Section 2.6(h) shall be applied to the Loans in accordance with
Section 2.6(k).
(i) PREPAYMENT FROM KEY MAN INSURANCE. In the event that a
Borrower or Agent receives proceeds from payment of the key man life insurance
maintained pursuant to Section 6.3, Borrowers shall prepay or Agent shall apply
such amount as a prepayment of the Obligations then outstanding in such manner
as Agent shall direct and require in its sole and absolute discretion.
Prepayments of the Loans which Agent requires to be made under this Section
2.6(i) shall be applied to the Loans in accordance with Section 2.6(k).
(j) PAYMENT AT MATURITY. The Commitments shall terminate and
all of the indebtedness evidenced by the Notes shall, if not sooner paid, be in
any event absolutely and unconditionally due and payable in full by Borrowers on
the Maturity Date.
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(k) APPLICATION OF PREPAYMENT PROCEEDS. With respect to
mandatory prepayments described in Sections 2.6(f) through 2.6(i) above, such
prepayments shall first be applied in the inverse order of maturity to the
payment of the remaining installments on the Initial Advance Loan, and at any
time after the Initial Advance Loan shall have been repaid in full, such
prepayments shall be applied in the inverse order of maturity to the payment of
the remaining installments on the Acquisition Loans, pro rata.
(l) PREPAYMENT FEES. If Borrowers voluntarily prepay the
Obligations in full or in part pursuant to Section 2.6(c) prior to the third
anniversary of the Closing Date, Borrowers shall pay to Agent, for the ratable
benefit of Lenders, as liquidated damages and compensation for the costs of
being prepared to make funds available to Borrowers under this Agreement, and
not as a penalty, an amount determined by multiplying (x) the sum of the
prepayment PLUS, the amount, if any, of the Commitments which are then
terminated, TIMES (y) three percent (3%) upon prepayment during the first Loan
Year; two percent (2%) upon prepayment during the second Loan Year; and one
percent (1%) upon prepayment during the third Loan Year; PROVIDED, HOWEVER, that
if such prepayment occurs as a result of any event described in Sections 2.6(d),
2.6(e), 2.6(f), 2.6(h) or 2.6(i) above, no such prepayment fee shall be
required.
(m) LATE CHARGES. If any principal of any Loan is not paid
within ten (10) days after Agent shall have given Borrowers notice of demand for
the payment of the same or within ten (10) days after any Event of Default
described in Section 9.1(h) in respect of Borrowers shall have occurred, or if
any interest on any Loan is not paid within ten (10) days after the same becomes
due, then and in any such case Agent shall have the right to assess a late
charge, payable by Borrowers upon demand, in an amount equal to the greater of
Twenty Dollars ($20.00) or three percent (3%) of the amount not timely paid. Any
such late charge shall be for the account of Lenders for the benefit of whom
such amount was not timely paid and shall be in addition to any other amounts
payable by Borrowers under the Loan Documents.
Section 2.7 PAYMENTS AND COMPUTATIONS.
(a) TIME AND PLACE OF PAYMENTS. Notwithstanding anything in
this Agreement or any of the other Loan Documents to the contrary, each payment
payable by Borrowers to Agent or any Lender under this Agreement or any of the
other Loan Documents, shall be made directly to Agent, at Agent's Head Office,
not later than 12:00 noon (local time at the Head Office), on the due date of
each such payment in immediately available and freely transferable funds. Agent
will promptly cause to be distributed to each Lender in immediately available
and freely transferable funds such Lender's Pro Rata Share of each such payment
received by Agent.
(b) APPLICATION OF FUNDS. Notwithstanding anything herein to
the contrary, the funds received by Agent with respect to the Obligations shall
be applied as follows:
(i) NO DEFAULT. If the Notes have not been accelerated
pursuant to Section 9.2(b) and if no Default or Event of Default hereunder or
under the Notes or any of the other Loan Documents shall have occurred and be
continuing at the time Agent receives such funds, in the following manner: (a)
first, to the payment of all fees, charges, and other sums (with exception of
principal and interest) due and payable to Agent or Lenders under the Notes,
this Agreement or the other Loan Documents at such time; (b) second, to the
payment of all of the
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interest which shall be due and payable on the principal of the Notes at the
time of such payment in accordance with each Lender's Pro Rata Share; (c) third,
to the payment of such amount of principal of the Notes that is then due in
accordance with each Lender's Pro Rata Share; and (d) fourth, to Borrowers.
(ii) DEFAULT. If the Notes have been accelerated pursuant to
Section 9.2(b), or if a Default or Event of Default hereunder shall have
occurred and be continuing hereunder or under the Notes or any of the other Loan
Documents at the time Agent receives such funds, in the following manner: (a)
first, to the payment or reimbursement of Lenders and Agent for all costs,
expenses, disbursements and losses which shall have been incurred or sustained
by Lenders or Agent in or incidental to the collection of the Obligations or the
exercise, protection, or enforcement by Lenders and Agent of all or any of the
rights, remedies, powers and privileges of Lenders and Agent under this
Agreement, the Notes, or any of the other Loan Documents and in and towards the
provision of adequate indemnity to Agent and any of Lenders against all taxes or
Liens which by law shall have, or may have priority over the rights of Agent or
Lenders in and to such funds and (b) second, to the payment of all of the
Obligations in accordance with Section 2.7(b)(i) above.
(c) PAYMENTS ON BUSINESS DAYS. If any sum would (but for the
provisions of this Section 2.7(c)) become due and payable to Agent or any Lender
by any Credit Party under any of the Loan Documents on any day which is not a
Business Day, then such sum shall become due and payable on the Business Day
next succeeding the day on which such sum would otherwise have become due and
payable hereunder or thereunder, and interest payable to Agent or any Lender
under this Agreement or any of the other Loan Documents shall continue to accrue
and shall be adjusted by Agent accordingly.
(d) COMPUTATION OF INTEREST. All computations of interest
payable under this Agreement, the Notes, or any of the other Loan Documents
shall be computed by Agent on the basis of the actual principal amount
outstanding on each day during the payment period and shall be calculated on the
basis of the actual number of days elapsed during such period for which interest
is being charged, predicated on a year consisting of three hundred and sixty
(360) days. The daily interest charge shall be one three-hundred-sixtieth
(1/360th) of the annual interest amount. Each determination of any interest rate
by Agent pursuant to this Agreement, any Note, or any of the other Loan
Documents shall be conclusive and binding on Borrowers in the absence of
manifest error. Absent manifest error, a certificate or statement signed by an
authorized officer of Agent shall be conclusive evidence of the amount of the
Obligations due and unpaid as of the date of such certificate or statement.
Section 2.8 PAYMENTS TO BE FREE OF DEDUCTIONS. Each payment payable by
Borrowers and any other Credit Party to Agent or any Lender under this
Agreement, any Note, or any of the other Loan Documents shall be made in
accordance with Section 2.7 hereof, without set-off or counterclaim and free and
clear of and without any deduction of any kind for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any political
subdivision or any taxing or other authority therein, unless a Borrower or such
other Credit Party is compelled by law to make any such deduction or
withholding. In the event that any such obligation to deduct or withhold is
imposed upon a Borrower or such other Credit Party with respect to any such
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payment payable to Agent or any Lender, (a) such Borrower or other Credit Party
shall be permitted to make the deduction or withholding required by law in
respect of the said payment, and (b) there shall become and be absolutely due
and payable by such Borrower or other Credit Party to Agent or such Lender on
the date on which the said payment shall become due and payable and Borrowers
hereby promise to pay to Agent or such Lender on such date, such additional
amount as shall be necessary to enable Agent or such Lender to receive the same
net amount which Agent or such Lender would have received on such due date had
no such obligation been imposed by law. Anything in this Section 2.8 to the
contrary notwithstanding, the foregoing provisions of this Section 2.8 shall not
apply in the case of any deductions or withholdings made in respect of taxes
charged upon or by reference to the overall net income, profits or gains of
Agent or any Lender. No Borrower or other Credit Party shall have any obligation
to make any payment pursuant to this Section 2.8 with respect to any Lender who
is not a party hereto on the Closing Date unless (i) no such payments would be
payable to any such Lender on the date it becomes a party hereto and no such
payments could be reasonably expected to be payable to such Lender and (ii) if
such Lender is organized under the laws of a foreign jurisdiction, such
jurisdiction is exempt from United States withholding tax and such Lender has
provided Borrowers with an Internal Revenue Form 4224 or Form 1001 or other
certificate of document required under United States law to establish
entitlement to such exemption.
Section 2.9 USE OF PROCEEDS.
(a) PERMITTED USES OF LOAN PROCEEDS. Each Borrower represents,
warrants and covenants to Agent and each Lender that all proceeds of the Loans
shall be used by such Borrower solely for the purpose of refinancing existing
debt, consummating the Transactions (including paying expenses incurred in
connection therewith) financing working capital, financing Permitted
Acquisitions and for general corporate purposes of Borrowers and their
Subsidiaries.
(b) PROHIBITED USES. Each Borrower represents, warrants and
covenants to Agent and each Lender that no part of the proceeds of the Loans
will be used (directly or indirectly) so as to result in a violation under
Regulations G, T, U or X of the Board of Governors of the Federal Reserve System
or for any other purpose violative of any rule or regulation of such Board.
Section 2.10 ADDITIONAL COSTS, ETC. If any Lender shall reasonably
determine that any future applicable law, rule or regulation, or any change in
any present law or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital, as a
consequence of its obligations hereunder, to a level below that which such
Lender could have achieved but for such adoption, change or compliance by any
amount deemed by such Lender to be material and is not otherwise reflected in
the interest and other charges payable by Borrowers hereunder, then Borrowers
shall pay to such Lender upon demand such amount or amounts, in addition to the
amounts payable under the other provisions of this Agreement, or the Notes, as
will compensate such Lender for such reduction. Determinations by any Lender of
the additional amount or amounts required to
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compensate such Lender in respect of the foregoing shall be conclusive in the
absence of manifest error. In determining such amount or amounts, Lender may use
any reasonable averaging and attribution methods.
Section 2.11 AGENT AND LENDER STATEMENTS. A statement signed by an
officer of any Lender (as the case may be) setting forth any additional amount
required to be paid by Borrowers to Agent or such Lender under Sections 2.8 and
2.10 hereof, and the computations made by Agent or such Lender to determine such
additional amount or amounts, shall be submitted by Agent or such Lender to
Borrowers in connection with each demand made at any time by Agent (and copies
thereof delivered to each other Lender) or such Lender under either of such
Sections. A claim by Agent or any Lender for all or any part of any additional
amounts required to be paid by Borrowers under Sections 2.8 and 2.10 hereof may
be made before or after any payment to which such claim relates. Each such
statement shall, in the absence of manifest error, constitute conclusive
evidence of the additional amount required to be paid to Agent or such Lender,
provided it sets out in reasonable detail the reasons for such notice and the
averaging and attribution methods used by Agent or such Lender to determine the
amounts set forth in such notice.
Section 2.12 CONVERSION OF LOANS. Borrowers shall have the option to
Convert on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of their Loans of
one Type owing by it into a Borrowing or Borrowings pursuant to the Facility of
another Type of Loans which can be made pursuant to such Facility, PROVIDED
THAT:
(a) No partial Conversion of a Borrowing of LIBOR Loans shall
reduce the outstanding principal amount of the LIBOR Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto;
(b) Any Conversion of LIBOR Loans denominated in Dollars into
Prime Rate Loans shall be made on, and only on, the last day of an Interest
Period for such LIBOR Loans;
(c) Prime Rate Loans may only be Converted into LIBOR Loans
denominated in Dollars if no Default under Section 9.1(a) or Event of Default is
in existence on the date of the Conversion unless Lenders otherwise agree; and
(d) Prime Rate Loans may not be Converted into LIBOR Loans
during any period when such Conversion is not permitted under Section 2.14; and
(e) Borrowings of LIBOR Loans resulting from this Section 2.12
shall not be less than the Minimum Borrowing Amount for LIBOR Loans.
Each such Conversion shall be effected by Borrowers giving Agent at its
Head Office, prior to 12:00 noon (local time at such Head Office), at least
three Business Days', in the case of Conversion into a LIBOR Loan denominated in
Dollars (or prior to 12:00 noon (local time at such Head Office) same Business
Day's, in the case of a Conversion into Prime Rate Loans), prior written notice
(or telephonic notice promptly confirmed in writing if so requested by Agent)
(each a "NOTICE OF CONVERSION"), substantially in the form of EXHIBIT J,
specifying the Loans to be so Converted, the Type of Loans to be Converted into
and, if to be Converted into a
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Borrowing of LIBOR Loans, the Interest Period to be initially applicable
thereto. Agent shall give each Lender prompt notice of any such proposed
Conversion affecting any of its Loans. For the avoidance of doubt, the
prepayment or repayment of any Acquisition Loans out of the proceeds of other
Acquisition Loans by Borrowers is not considered a Conversion of Acquisition
Loans into other Acquisition Loans.
Section 2.13 SELECTION AND CONTINUATION OF INTEREST PERIODS.
(a) Each Borrower shall have the right at the time that it
gives a Notice of Borrowing or Notice of Conversion in respect of the making of
or Conversion into a Borrowing of Loans consisting of LIBOR Loans, to select in
such Notice the Interest Period to be applicable to such Borrowing, and prior to
12:00 noon (local time at the Head Office) on the third Business Day prior to
the expiration of an Interest Period applicable to a Borrowing, to elect by
giving Agent written or telephone notice (in the case of telephone notice,
promptly confirmed in writing if so requested by Agent) to continue all or a
portion consisting of at least the Minimum Borrowing Amount of the principal
amount of such Loans as one or more Borrowings of LIBOR Loans and to select the
Interest Period to be applicable to any such Borrowing (any such notice, a
"NOTICE OF CONTINUATION"), which Interest Period shall, at the option of the
Borrowers, for LIBOR Loans, be a one, three or six month period; PROVIDED, THAT
notwithstanding anything to the contrary contained above, Borrowers' right to
select an Interest Period or to effect any Continuation shall be subject to the
applicable provisions of Section 2.14 and to the following:
(i) the initial Interest Period for any Borrowing of LIBOR
Loans shall commence on the date of such Borrowing (the date of a Borrowing
resulting from a Conversion or Continuation shall be the date of such Conversion
or Continuation) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next preceding Interest
Period expires;
(ii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of such
calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED THAT if any Interest Period would otherwise
expire on a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv) no Interest Period for any LIBOR Loan may be selected
which would end after the Maturity Date;
(v) each Borrowing of LIBOR Loans resulting from any
Continuation shall be in at least the Minimum Borrowing Amount applicable
thereto; and
(vi) no Interest Period may be elected at any time when a
Default under Section 9.1(a) or an Event of Default is then in existence.
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(b) If upon the expiration of any Interest Period Borrowers
have failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of LIBOR Loans denominated in Dollars as provided above,
Borrowers shall be deemed to have elected to Convert such Borrowing to Prime
Rate Loans effective as of the expiration date of such current Interest Period.
If Borrowers fail to specify in a Notice of Continuation the Interest Period for
any LIBOR Loans which will be Continued as LIBOR Loans, such Interest Period
shall be deemed to be one month.
Section 2.14 INCREASED COSTS, ILLEGALITY, ETC.
(a) In the event that (x) in the case of clause (i) below,
Agent or (y) in the case of clauses (ii) and (iii) below, any Lender, shall have
determined on a reasonable basis (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto):
(i) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in an amount
which such Lender reasonably deems material with respect to any LIBOR Loans
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges) because of (x) any change since the Effective Date in any applicable
law, governmental rule, regulation, guideline, order or request (whether or not
having the force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to, a change
in official reserve requirements, but, in all events, excluding reserves
includable in the LIBOR Rate pursuant to the definition thereof) and/or (y)
other circumstances adversely affecting the interbank LIBOR market or the
position of such Lender in such market; or
(ii) at any time, that the making or continuance of any
LIBOR Loan has become unlawful by compliance by such Lender in good faith with
any change since the Effective Date in any law, governmental rule, regulation,
guideline or order, or the interpretation or application thereof, or would
conflict with any thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a contingency
occurring after the Effective Date which materially adversely affects the
interbank LIBOR market;
THEN, and in any such event, such Lender (or Agent in the case of clause (i)
above) shall (x) on or promptly following such date or time and (y) within ten
(10) Business Days of the date on which such event no longer exists give notice
(by telephone confirmed in writing) to Borrowers and to Agent of such
determination (which notice Agent shall promptly transmit to each of the other
applicable Lenders). Thereafter (x) in the case of clause (i) above, Borrowers
shall pay to such Lender, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof submitted to Borrowers by
such Lender shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (y) in the
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case of clause (ii) above, Borrowers shall take one of the actions specified in
Section 2.14(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any LIBOR Loan denominated in Dollars is
affected by the circumstances described in Section 2.14(a)(i) or (ii), Borrowers
shall either (i) if the affected LIBOR Loan is then being made pursuant to a
Borrowing, by giving Agent telephonic notice (confirmed promptly in writing)
thereof on the same date that Borrowers were notified by a Lender pursuant to
Section 2.14(a)(i) or (ii), cancel said Borrowing, convert the related Notice of
Borrowing into one requesting a Borrowing of Prime Rate Loans or require the
affected Lender to make its requested Loan as a Prime Rate Loan, or (ii) if the
affected LIBOR Loan is then outstanding, upon at least one Business Day's notice
to Agent, require the affected Lender to convert each such LIBOR Loan into a
Prime Rate Loan, PROVIDED THAT if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this Section
2.14(b).
(c) If any Lender shall have determined that after the
Effective Date, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within five days after demand by such Lender (with a copy to
Agent), Borrowers shall pay to such Lender such additional amount or amounts as
will compensate such Lender or its parent corporation for such reduction. Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.14(c), will give prompt written notice
thereof to Borrowers, which notice shall set forth, in reasonable detail, the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of Borrowers' obligations
to pay additional amounts pursuant to this Section 2.14(c) upon the subsequent
receipt of such notice.
Section 2.15 BREAKAGE COMPENSATION. Borrowers shall compensate
each applicable Lender, upon its written request (which request shall set forth
in reasonable detail the basis for requesting and the method of calculating such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its LIBOR Loans) which such Lender may sustain: (i) if for any reason
(other than a default by such Lender or Agent), a Borrowing of LIBOR Loans does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not rescinded or withdrawn by Borrowers or deemed
rescinded or withdrawn pursuant to Section 2.14); (ii) if any repayment,
prepayment, Conversion or Continuation of any of its LIBOR Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any of its
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LIBOR Loans is not made on any date specified in a notice of prepayment given by
a Borrower; or (iv) as a consequence of (x) any other default by a Borrower to
repay its LIBOR Loans when required by the terms of this Agreement or (y) an
election made pursuant to Section 2.14(b). Such loss, cost, expense and
liability to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
interest rate that would have been applicable to such Loan, for the period from
the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to effect a Borrowing, Conversion or
Continuation, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it
to bid, at the commencement of such period, for Dollar deposits, of a comparable
amount and period from other banks in the LIBOR market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to Borrowers and shall be
conclusive absent manifest error. Borrowers shall pay such Lender the amount
shown as due on any such request within ten (10) days after receipt thereof.
ARTICLE 3
---------
SECURITY AGREEMENT
------------------
Section 3.1 SECURITY INTEREST. To secure the prompt repayment of the
Notes and the Obligations, each Borrower hereby grants, and hereby pledges and
collaterally assigns, to Agent, on behalf of Lenders, a lien and security
interest in and to all of such Borrower's personal property and fixtures,
wherever located, whether now or hereafter owned, existing or acquired or
hereafter arising, including, without limitation, the Collateral. To secure
further such liabilities and Obligations, each Borrower has granted to Agent, on
behalf of Lenders, a first lien upon certain real property owned by such
Borrower and those leasehold interests of such Borrower identified on Schedule
3.1; has executed and delivered to Agent, on behalf of Lenders, Mortgages or
deeds of trust, amendments or modifications to Mortgages and valid assignments
of all other property rights (including, without limitation, rights to receive
rents and rights with respect to judgments and claims) which now exist or which
may exist or arise hereafter from time to time; has executed and delivered to
Agent, on behalf of Lenders, certificates of title and the like as necessary
from time to time to secure the Obligations hereunder; and shall deliver to
Agent, on behalf of Lenders, to the extent required herein or upon Agent's
request in accordance with the terms of this Agreement, all instruments,
documents and Chattel Paper in which such Borrower from time to time has an
interest and such other documents as Agent may request to perfect a security
interest in the Collateral.
Section 3.2 FINANCING STATEMENTS; ADDITIONAL DOCUMENTS. Borrowers shall
take all necessary action or as requested by Agent or any Lender to continue as
perfected the first lien and security interest in the Collateral of Lenders and
Agent, except for such Collateral in which a first lien can be perfected only by
possession and such possession is not required by Agent at this time and
Permitted Liens. Such filings shall be in form and substance required by Agent,
and Borrowers shall pay all costs of recording and filing the financing
statements (and any continuation or termination statements with respect
thereto), the Mortgages and any other
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documents, titles, statements, assignments or the like reasonably required to
create, maintain, preserve or perfect the liens or security interests granted
under the Loan Documents, together with costs and expenses of any lien or UCC
searches required by Agent in connection with the making of the Loans. Each
Borrower irrevocably hereby 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 to execute such financing statements, documents and
other agreements and instruments and do such other acts and things as may be
necessary to preserve and perfect the security interest in the Collateral
granted to Agent for the benefit of Lenders. At Agent's request, Borrowers shall
execute and deliver to Agent, on behalf of Lenders, at any time and from time to
time hereafter, all supplemental documentation that Agent may reasonably request
to perfect, maintain, preserve or continue the security interest and liens
granted Lenders and Agent hereby and under any of the other Loan Documents, in
form and substance acceptable to Agent, and pay the costs of preparing and
recording or filing of the same. Each Borrower agrees that a carbon,
photographic, or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. Except as otherwise provided
in this Agreement, Borrowers, immediately on acquiring Inventory or Accounts or
Proceeds thereof for which separate perfection is necessary or reasonably
considered desirable by Agent, shall deliver to Agent, on behalf of Lenders, any
and all evidence of ownership of any such property and shall take all such
action as may be reasonably necessary to perfect Agent's security interest in
such property. Agent and each Lender (by any of its officers, employees or
agents, but only upon authorization of an officer of Agent or such Lender) shall
have the right, at any time or times during Borrowers' usual business hours,
upon prior notice to inspect the Collateral, all records related thereto (and to
make extracts from such records) and the premises upon which any of the
Collateral is located, to discuss Borrowers' affairs and finances with any
accountant, account debtor or creditor of Borrowers and to verify the amount,
quality, quantity, value and condition of, or any other matter relating to, the
Collateral. Borrowers shall perform all reasonable acts and execute or cause to
be executed all documents, including, without limitation, the Collateral
Assignment of Intellectual Property for filing with the United States Patent and
Trademark Office, state offices and corresponding foreign registries as Agent
reasonably deems necessary or desirable, to establish, perfect, record and
maintain the security interest in the Intellectual Property and the goodwill
symbolized thereby (whether now existing or hereafter acquired).
Section 3.3 ACCOUNTS; CHATTEL PAPER; LEASE AGREEMENTS. After the
occurrence of an Event of Default and during the continuance thereof, Agent
shall have the right at any time to notify any Person obligated to make payments
to Borrowers with respect to Accounts, Chattel Paper and lease agreements to
make such payments directly to Agent, on behalf of Lenders.
Section 3.4 PLEDGE OF STOCK. As additional collateral for the Loans to
be made hereunder, each Borrower and each Subsidiary of each Borrower shall
execute and deliver to Agent, for the ratable benefit of Lenders, appropriate
Pledge Agreements with respect to all Pledged Stock.
Section 3.5 RELEASE OF COLLATERAL. Upon Borrowers' full performance of
the Obligations, Agent and Lenders shall release their interest in all
Collateral. Upon any sale of Collateral permitted pursuant to Section 8.5, Agent
shall release its interest in the portion of the Collateral being sold, without
prejudice to the continuation of its lien on any other Collateral.
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ARTICLE 4
---------
CONDITIONS PRECEDENT TO DISBURSEMENTS
-------------------------------------
Section 4.1 CONDITIONS PRECEDENT TO INITIAL CLOSING. On or prior to the
Closing Date, each of the following conditions precedent shall have been
satisfied:
(a) CERTIFIED COPIES OF CHARTER DOCUMENTS AND BYLAWS. Agent
and each Lender shall have received from each Credit Party (i) a copy, certified
by the Secretary or an Assistant Secretary of each Credit Party to be true and
complete on and as of the Closing Date, of the charter or other organization
documents and by-laws of each Credit Party as in effect on the Closing Date
(together with all, if any, amendments thereto); and (ii) the charter or other
organization documents of each Credit Party certified by the applicable
Secretary of State.
(b) PROOF OF CORPORATE AUTHORITY. Agent and each Lender shall
have received from each Credit Party copies, certified by the Secretary or an
Assistant Secretary of each Credit Party to be true and complete on and as of
the Closing Date, of records of all action taken by each Credit Party to
authorize (i) the execution and delivery of this Agreement and the other Loan
Documents and to which it is or is to become a party as contemplated or required
by this Agreement; (ii) its performance of all of its obligations under each of
such documents; and (iii) the incurrence by each Credit Party of the borrowings
contemplated hereby. Agent shall have received from the appropriate Secretary of
State a Certificate of Good Standing of recent date certifying the existence and
good standing of each Credit Party under the laws of the state of its
incorporation and certificates evidencing its good standing in each state where
such Credit Party is required to qualify to conduct business.
(c) AUTHORITY TO EXECUTE PLEDGE AGREEMENTS. Each Person
executing a Pledge Agreement which is not an individual shall deliver to Agent
such evidence as Agent shall reasonably deem necessary to evidence the authority
of such Person to execute and deliver each such Pledge Agreement and to perform
its respective obligations thereunder.
(d) INCUMBENCY CERTIFICATE. Agent and each Lender shall have
received from each Credit Party an incumbency certificate, dated as of the
Closing Date, signed by the Secretary or an Assistant Secretary of such Credit
Party and giving the name and bearing a specimen signature of each individual
who shall be authorized (i) to sign, in the name and on behalf of such Credit
Party, each of the Loan Documents to which such Credit Party is or is to become
a party on the Closing Date; and (ii) to give notices and to take other action
on behalf of such Credit Party under the Loan Documents.
(e) OFFICERS' CERTIFICATES. Agent and each Lender shall have
received from each Credit Party a certificate dated as of the Closing Date,
signed by a duly authorized officer and certifying that each of the
representations and warranties made by and on behalf of such Credit Party to
Agent and each Lender in this Agreement and in the other Loan Documents was true
and correct when made, and is true and correct on and as of the Closing Date
(except to the extent that they relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
earlier dates or times referred to therein).
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(f) LOAN DOCUMENTS, ETC. (i) Each of the Loan Documents shall
have been duly and properly authorized, executed and delivered by each Credit
Party that is a party hereto and shall be in full force and effect on and as of
the Closing Date; (ii) executed originals of each of the Notes shall have been
delivered to each Lender in accordance with their respective Commitments, and
(iii) executed originals or (as the case may be) executed counterparts of each
of the other Loan Documents shall have been delivered to Agent and/or each
Lender.
(g) ACTIONS TO PERFECT LIENS. Agent shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including without limitation, the filing of
duly executed financing statements on Form UCC-1, necessary or, in the opinion
of Agent, desirable to perfect the Liens created by the Security Documents shall
have been completed.
(h) INSURANCE. Agent shall have received copies of
certificates of insurance executed by each insurer or its authorized agent
evidencing the insurance required to be maintained by each Credit Party pursuant
to Section 6.2(b), and a certificate of a nationally recognized insurance broker
reasonably satisfactory to Agent certifying that insurance complying with such
Section has been obtained and is in full force and effect.
(i) SUBSIDIARY GUARANTIES. An executed original of the
Guaranty, substantially in the form of EXHIBIT M, shall have been delivered to
Agent and each Lender by each Guarantor Subsidiary.
(j) SUBSIDIARY SECURITY AGREEMENT. An executed original of the
Security Agreement, substantially in the form of EXHIBIT N, shall have been
delivered to Agent and each Lender by each Guarantor Subsidiary.
(k) LEGALITY OF TRANSACTIONS. No change in applicable law
shall have occurred as a consequence of which it shall have become and continue
to be unlawful (i) for Agent or any Lender to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date; or (ii) for any Credit Party to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date.
(l) PERFORMANCE, ETC. Agent and each Lender shall have
received from each Credit Party a certificate dated the Closing Date, signed by
a duly authorized officer, certifying that (i) such Credit Party duly and
properly performed, complied with and observed each of its covenants, agreements
and obligations contained in each of the Loan Documents to which such Credit
Party is a party or by which such Credit Party is bound on the Closing Date, and
(ii) no event has occurred on or prior to the Closing Date, and no condition
exists on the Closing Date, which constitutes a Default or an Event of Default.
(m) PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
other proceedings in connection with the transactions contemplated by this
Agreement, each of the other Loan Documents and all instruments and documents
incidental thereto shall be in form and substance satisfactory to Agent and
Lenders, and Agent and each Lender shall have received all
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such counterpart originals or certified or other copies of all such instruments
and documents as Agent and each Lender shall have requested.
(n) COMPLIANCE WITH LAWS. The Borrowings made under this
Agreement are and shall be in compliance with the requirements of all applicable
laws, regulations, rules and orders, including without limitation, the
Environmental Laws and the requirements imposed by the Board of Governors of the
Federal Reserve System under Regulations U, G and X, and by the SEC.
(o) LEGAL OPINION. Agent and Lenders shall have received a
written legal opinion, addressed to Agent and each Lender and dated as of the
Closing Date, from legal counsel for Borrowers, which shall be in a form and
substance acceptable to Agent and each Lender.
(p) LEGAL FEES. Borrowers shall have reimbursed Agent for all
fees and disbursements of legal counsel to Agent (in its capacity as Agent and a
Lender) which shall have been incurred by Agent through the Closing Date in
connection with the preparation, negotiation, review, execution and delivery of
the Loan Documents and the handling of any other matters incidental thereto
(provided that Agent shall provide to Borrowers copies of evidence of such fees
and disbursements incurred by Agent in form and content acceptable to Agent's
counsel). Each Lender, other than Provident, agrees that it shall be responsible
for any legal fees incurred by it in connection with the negotiations, review,
execution and delivery of the Loan Documents.
(q) PAYMENT OF CLOSING FEE. Borrowers shall have paid to Agent
the closing fee separately agreed to between Agent and Borrowers.
(r) NO MATERIAL LITIGATION. There shall be no litigation or
governmental or regulatory investigation or proceeding pending against or
involving Borrowers or any of the Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
(s) EXISTING INDEBTEDNESS. Except for the Permitted
Indebtedness, contemporaneously with the Closing Date, Borrowers shall have
prepaid all Indebtedness for Borrowed Money of Borrowers and their Subsidiaries
and caused all Liens in respect thereof to be released.
(t) KEY MAN LIFE INSURANCE. Borrowers shall have secured and
provided to Agent the key man life insurance policies required to be maintained
pursuant to Section 6.3 hereof.
(u) LIEN SEARCHES. Agent shall have received the results of a
recent search by a Person satisfactory to Agent, of the UCC, judgment and tax
lien filings which may have been filed with respect to the Credit Parties and/or
their personal property in the jurisdictions listed on SCHEDULE 4.1(U), and the
results of such search shall be satisfactory to Agent.
(v) WORKERS' COMPENSATION CLAIM REPORT. Borrowers shall have
delivered to Agent and Lenders a report prepared and certified by Parent's chief
accounting officer reporting on and providing an analysis of workers
compensation claims affecting Borrowers and their Subsidiaries and the adequacy
of their reserves and insurance policies therefor (including
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reimbursements for premiums billed and collected from customers) in form and
content reasonably acceptable to Agent.
(w) NO ADVERSE CHANGES. Since December 31, 1999, no changes
shall have occurred in the assets, liabilities, financial condition, business,
operations or prospects of Borrowers and their Subsidiaries which, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.
(x) FINANCIAL INFORMATION. Each Lender shall have received the
financial statements, Pro Forma Financial Statements, and Financial Projections
referred to in Section 5.5, certified by the chief financial officer of Parent,
which certificate shall also certify that such financial statements, Pro Forma
Financial Statements and Financial Projections accurately reflect the financial
status and condition of Borrowers and their Subsidiaries and that (i)
Consolidated pro forma EBITDA (as adjusted) for each of the twelve month periods
ended September 30, 2000 and October 31, 2000, respectively, equals or exceeds
Four Million Dollars ($4,000,000), based on Parent's financial results, and (ii)
the sum of (A) Borrowers' Consolidated Cash Equivalents and (B) the Total
Commitment Availability as of the Closing Date, after giving effect to the
Initial Advance, is not less than Seventeen Million Dollars ($17,000,000).
(y) MERGER. The Merger shall have been consummated as a
cashless merger in accordance with the terms of the Registration Statement, the
Merger Agreement and any other applicable documents, which terms and conditions
shall be satisfactory to Agent and Lenders, and in full compliance with all
applicable laws, and Agent and Lenders shall have received satisfactory evidence
of the consummation thereof.
(z) PREFERRED STOCK TRANSACTION. The Parent shall have closed,
or shall be prepared simultaneously to close with the closing of the Initial
Advance Loan, the Preferred Stock Transaction on terms and conditions
satisfactory to Agent and Lenders, and Agent and Lenders shall have received
satisfactory evidence thereof.
(aa) TENDER OFFER. The Tender Offer shall have been
consummated with respect to the Common Stock of the Parent on terms and
conditions consistent with those disclosed in the Registration Statement, in a
transaction or transactions satisfactory to Agent and Lenders, at a cost to
Borrowers not to exceed Twelve Million Dollars ($12,000,000).
(bb) FUNDS FOR TRANSACTIONS. The sources and uses of funds
necessary to consummate the Transactions shall have been approved to the
satisfaction of Agent and Lenders.
Section 4.2 TRANSACTION DOCUMENTS. As of the Closing Date, Agent and
Lenders shall have received complete copies of each Transaction Document
(including all exhibits, schedules and disclosure letters referred to therein or
delivered pursuant thereto, if any), in each case as originally executed and
delivered by the parties thereto, and all amendments thereto, waivers relating
thereto and other side letters or agreements affecting the terms thereof.
Borrowers shall certify to Agent and Lenders as of the Closing Date that: (a)
none of such documents and agreements, nor any of the provisions thereof, have
been amended or otherwise modified nor have any of the provisions thereof been
waived except pursuant to a written agreement or instrument which has heretofore
been consented to by Agent and Lenders; (b) each Transaction
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Document to which any Credit Party is a party has been duly executed and
delivered by such Credit Party and by each other party thereto and is in full
force and effect; (c) the representations and warranties of each Credit Party
contained in each Transaction Document are true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date (except
to the extent that they relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
earlier dates or times referred to therein), and Agent and Lenders shall be
entitled to rely on such representations and warranties with the same force and
effect as if they were incorporated in their entirety in this Agreement and made
to Agent and Lenders directly; and (d) to the best knowledge of Borrowers, the
representations and warranties of each other party to each such Transaction
Document contained in such Transaction Document are true and correct in all
material respects with the same force and effect as if made on and as of the
Closing Date (except to the extent that they relate solely to an earlier date or
time, which representations and warranties shall be true and correct on and as
of the earlier dates or times referred to therein).
Section 4.3 CONDITIONS PRECEDENT TO SUBSEQUENT LOANS AND LETTERS OF
CRED IT. The obligation of Lenders to make any Acquisition Loan or issue any
Letter of Credit shall be subject to the satisfaction, prior thereto or
concurrently therewith, of each of the following conditions precedent (provided
that Sections 4.3(h), 4.3(i) and 4.3(j), if applicable, shall not apply in the
case of any Letter of Credit issuance):
(a) LEGALITY OF TRANSACTIONS. It shall not be unlawful (a) for
any Lender or Agent to perform any of its agreements or obligations under any of
the Loan Documents to which such Person is a party on the Closing Date of such
Acquisition Loan Borrowing or Letter of Credit issuance or (b) for any Credit
Party to perform any of its agreements or obligations under any of the Loan
Documents.
(b) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by or on behalf of the Credit Parties to
Lenders or Agent in this Agreement or any other Loan Document (a) shall have
been true and correct when made and (b) shall, for all purposes of this
Agreement, be deemed to be repeated on and as of the dates of Borrowers' request
for such Acquisition Loan or Letter of Credit and the closing of such
Acquisition Loan or issuance of such Letter of Credit, as the case may be, and
shall be true and correct in all material respects as of each of such dates,
except, in each case, as affected by the consummation of the Transactions
contemplated by the Loan Documents and except to the extent that they relate
solely to an earlier date or time, which representations and warranties shall be
true and correct on and as of the earlier dates or times referred to therein.
(c) NO DEFAULT. No event shall have occurred on or prior to
such date and be continuing on such date, and no condition shall exist on such
date, which constitutes a Default or Event of Default.
(d) MAXIMUM CREDIT. The making of such Acquisition Loan or
issuance of such Letter of Credit shall not result in the sum of all outstanding
Loans and Letters of Credit exceeding the Total Commitments.
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(e) PERMITTED ACQUISITIONS. All conditions precedent to the
Closing of any Acquisition Loan imposed by Agent and Lenders in their written
approval thereof shall have been satisfied, including but not limited to Agent's
and Lenders' receipt of such information concerning the Permitted Acquisition
contemplated by EXHIBIT K and such other information and such agreements,
assignments, guaranties, pledges and other documents as Agent and Lenders shall
request in their reasonable discretion.
(f) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. Agent and
Lenders shall have received a Notice of Borrowing meeting the requirements of
Section 2.3 with respect to the incurrence of Acquisition Loans or a Letter of
Credit Request for the issuance of a Letter of Credit meeting the requirements
of Section 11.2 with respect to the issuance of Letters of Credit.
(g) NO MATERIAL ADVERSE EFFECT. At the time of such Loan or
issuance of such Letter of Credit, as the case may be, and also after giving
effect thereto, no Material Adverse Effect shall have occurred.
(h) FLOOD HAZARD DETERMINATION. Agent shall have received, at
Borrowers' expense, a Standard Flood Hazard Determination Form issued or
certified by a Person satisfactory to Agent and Lenders for each structure or
improvement that either (i) is located on Real Estate covered by a Mortgage or
(ii) stores or houses any Inventory or Equipment or any substantial part of the
Collateral. Further, in the event such Standard Flood Hazard Determination Form
evidences that the subject structure or improvement is located in a special
flood hazard, as defined by FEMA, Borrowers shall deliver to Agent and Lenders
evidence of appropriate flood insurance in amounts and under such conditions as
identified in Section 6.2(b) hereof.
(i) MORTGAGE AND TITLE INSURANCE. The following documents each
of which shall be executed (and, where appropriate, acknowledged) by Persons
satisfactory to Agent and Lenders:
(A) each of the Mortgages, in each case duly executed and
delivered by the appropriate Credit Party (and where appropriate by the trustee
thereunder) in recordable form (in such number of copies as Agent shall have
requested), together with such Uniform Commercial Code financing statements as
may be needed in order to perfect the security interests granted by each of the
Mortgages in any fixtures and other property therein described which may be
subject to the Uniform Commercial Code, in each case appropriately completed and
duly executed and in proper form for filing in all offices in which required;
(B) with respect to the Real Estate covered by the
Mortgages, an ALTA Loan Policy Form B-1970 (or such other form that may be
acceptable to Agent and Lenders) issued by a title insurance company
satisfactory to Agent and Lenders (the "TITLE COMPANY"), insuring the validity
and priority of the Liens created under the Mortgages for and in amounts
satisfactory to Agent and Lenders, with all standard and general exceptions
deleted and endorsed over so as to afford full "extended form coverage" subject
only to the Permitted Exceptions and such other exceptions as are satisfactory
to Agent and Lenders and including such endorsements as Agent and Lenders may
reasonably require; and
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(C) with respect to the Real Estate covered by the Mortgages; an as-built survey
of recent date prepared by a registered land surveyor or engineer, duly licensed
in the state where such Real Estate is located certified to the Title Company
and to Agent and Lenders in full ALTA form and depicting such matters as may be
required by Agent and Title Company and in such form as to cause the Title
Company to delete the standard printed survey exception from the title insurance
policy and to enable the Title Company to issue its policy free from any
exceptions or objections whatsoever relating to survey matters. The Survey may
be a re-certification of an existing survey, so long as it conforms to the above
requirement.
Borrowers shall have paid to the Title Company all expenses and premiums of the
Title Company in connection with the issuance of such policies. In addition,
Borrowers shall have paid to the Title Company or Agent an amount equal to all
mortgage and mortgage recording taxes, intangibles taxes, stamp taxes and other
taxes payable in connection with the execution and delivery of the Mortgages and
the obligations secured thereby and the recording of the Mortgages in the
appropriate land offices.
(j) ENVIRONMENTAL ASSESSMENT. Agent and Lenders shall have
received an environmental survey and assessment of all Real Estate covered by
the Mortgages by a firm of licensed engineers in form and substance satisfactory
to each, and the conditions disclosed in such survey and assessment shall be
satisfactory to Agent and Lenders.
The acceptance of the benefits of each Loan or Letter of Credit shall
constitute a representation and warranty by Borrowers to Agent and each Lender
that all of the applicable conditions specified in Sections 4.1, 4.2 and/or 4.3,
as the case may be, have been satisfied as of that time. All of the
certificates, legal opinions and other documents and papers referred to in this
Article 4, unless otherwise specified, shall be delivered to Agent for the
account of each Lender and, except for the Notes, in sufficient counterparts for
each Lender, and Agent will promptly distribute to Lenders their respective
Notes and the copies of such other certificates, legal opinions and documents.
ARTICLE 5
---------
GENERAL REPRESENTATIONS AND WARRANTIES
--------------------------------------
Borrowers jointly and severally represent and warrant to Agent and each
Lender as follows:
Section 5.1 EXISTENCE, ETC.
(a) Parent (i) is duly organized, validly existing and in good
standing under the laws of the State of Ohio; and (ii) has full corporate power
and authority and full legal right to own or to hold under lease its Property
and to carry on its business. Parent is qualified and licensed in each
jurisdiction wherein the character of the Property owned or held under lease by
it, or the nature of its business, makes such qualification necessary or
advisable, except where failure to be so qualified and licensed will not have a
Material Adverse Effect. Parent is currently qualified in good standing as a
foreign corporation in each jurisdiction set forth on SCHEDULE 5.1(a).
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(b) The authorized Capital Stock of Parent and each of its
Subsidiaries is as set forth on SCHEDULE 5.1(b). All issued and outstanding
shares of Capital Stock of Parent and each such Subsidiary are duly authorized
and validly issued, fully paid and nonassessable and such shares were issued in
compliance with all applicable state and federal laws concerning the issuance of
Securities. Except as set forth on SCHEDULE 5.1(b) and except for the Liens of
the Pledge Agreements, there are no outstanding options, rights or warrants
issued by Parent or any Subsidiary for the acquisition of shares of the Capital
Stock of Parent or any Subsidiary, nor any outstanding securities or obligations
convertible into such shares, nor any agreements by Parent or any Subsidiary to
issue or sell such shares. Except as set forth on SCHEDULE 5.1(b), there are no
options, sale agreements, pledges (other than the Pledge Agreements), proxies,
voting trusts, powers of attorney or any other agreements or instruments binding
upon any of Parent's or the Subsidiaries' shareholders with respect to
beneficial or record ownership of or voting rights with respect to shares of the
Capital Stock of Parent and/or the Subsidiaries.
(c) Parent has no Subsidiaries except as set forth on SCHEDULE
5.1(c). All Guarantor Subsidiaries, all Material Subsidiaries and all Inactive
Subsidiaries are identified as such on SCHEDULE 5.1(c). All the shares of
Capital Stock of each Subsidiary are free and clear of all Liens other than
those in favor of Agent. Each Subsidiary (i) is duly organized, validly existing
and in good standing under the laws of the state of its incorporation (except as
set forth in SCHEDULE 5.1(c) as of the date hereof, provided that Borrowers
shall cause all necessary filings to be made and prosecuted to effectiveness
within ninety (90) days of the Effective Date to restore such exceptions), and
(ii) has full corporate power and authority and full legal right to own or to
hold under lease its Property and to carry on its business. Except for the
qualifications and licenses described in SCHEDULE 5.1(c) as filings in process
as of the date hereof (all of which Borrowers shall cause to be made and
prosecuted to effectiveness within ninety (90) days of the Effective Date), each
Subsidiary is qualified and licensed in each jurisdiction wherein the character
of the Property owned or held under lease by it, or the nature of its business,
makes such qualification necessary or advisable, except where failure to be so
qualified and licensed will not have a Material Adverse Effect. Each Material
Subsidiary is currently qualified in good standing as a foreign corporation in
each jurisdiction set forth on SCHEDULE 5.1(c). Each Inactive Subsidiary is not
active nor does it own, hold or use any assets or properties or conduct any
business unrelated to winding up its affairs, nor does any Inactive Subsidiary
have any liabilities which have not been disclosed to Agent and Lenders as
required pursuant to this Agreement.
(d) Except for Capital Stock of the Subsidiaries, Parent does
not own or hold of record (whether directly or indirectly) any shares of any
class in the capital of any corporation, nor does Parent own or hold (whether
directly or indirectly) any legal and/or beneficial equity interest in any
partnership, business trust or joint venture or in any other unincorporated
trade or business enterprise.
Section 5.2 AUTHORITY, ETC.
(a) Each Credit Party has adequate power and authority and has
full legal right to enter into this Agreement and each of the other Loan
Documents to which it is a party, and to perform, observe and comply with all of
its agreements and obligations under each of such documents, including, without
limitation the borrowings contemplated hereby.
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(b) The execution and delivery by each Credit Party of each of
the Loan Documents to which it is a party, the performance by each Credit Party
of all of its agreements and obligations under such documents, and the making by
each Credit Party of the borrowings contemplated by this Agreement, have been
duly authorized by all necessary corporate action on the part of each Credit
Party and do not and will not (i) contravene any provision of its charter
documents or by-laws (each as in effect from time to time); (ii) conflict with
(other than the mandatory redemption provisions of the Preferred Stock
Transaction), or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in the creation of any Lien upon any of
the Property of each Credit Party under any agreement, trust deed, indenture,
mortgage or other material instrument to which such Credit Party is a party or
by which such Credit Party or any other Property of such Credit Party is bound
or affected; (iii) violate or contravene any provision of any law, rule or
regulation (including, without limitation, Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System) or any order, ruling or
interpretation thereunder or any decree, order or judgment of any court or
governmental or regulatory authority, bureau, agency or official (all as from
time to time in effect and applicable to such Credit Party); or (iv) require any
waivers, consents or approvals by any of the creditors or trustees for creditors
of such Credit Party or any other Person.
(c) Other than filings required to perfect the security
interests granted under this Agreement and any other Loan Document, no approval,
consent, order, authorization or license by, or giving notice to, or taking any
other action with respect to, any governmental or regulatory authority or agency
is required, under any provision of any applicable law:
(i) for the execution and delivery by each Credit Party of
this Agreement, each Note, and each other Loan Document to which it is a party,
for the performance by each Credit Party of any of the agreements and
obligations thereunder or for the making by such Credit Party of the borrowing
contemplated by this Agreement or for the conduct by such Credit Party of its
business;
(ii) to ensure the continuing legality, validity, binding
effect, enforceability or admissibility in evidence of this Agreement, the Notes
and the other Loan Documents; or
(iii) except as set forth in the Transaction Documents, for
the consummation of the Transactions.
Section 5.3 BINDING EFFECT OF DOCUMENTS, ETC. Each of the Loan
Documents which each Credit Party has or is to have executed and delivered as
contemplated and required to be executed and delivered as of the Closing Date by
this Agreement has been so executed and delivered by such Credit Party, and each
such Loan Document is or will be in full force and effect. The agreements and
obligations of each Credit Party contained in each such Loan Document constitute
or shall constitute legal, valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms.
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Section 5.4 NO EVENTS OF DEFAULT, ETC.
(a) No event has occurred and is continuing, and no condition
exists, which constitutes a Default or an Event of Default.
(b) No default by any Credit Party and no accrued right of
rescission, cancellation or termination on the part of any Credit Party, exists
under this Agreement or any of the other Loan Documents.
Section 5.5 FINANCIAL STATEMENTS.
(a) The Parent has delivered or caused to be delivered to
Lenders and Agent prior to the execution and delivery of this Agreement complete
and correct copies of (i) the audited consolidated balance sheets of the Parent
and its Subsidiaries as of the fiscal years ended on December 31, 1998 and
December 31, 1999, and the related audited consolidated statements of
operations, stockholders' equity, and cash flows for the fiscal years then
ended, and notes thereto, accompanied by the unqualified report thereon of its
independent accountant, all as set forth in the Parent's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 filed with the SEC, and (ii)
the unaudited condensed consolidated balance sheets of the Parent and its
Subsidiaries as of September 30, 2000, and the related unaudited condensed
consolidated statements of operations, cash flows and changes in stockholders'
equity of the Parent and its Subsidiaries for the fiscal quarter then ended, and
notes thereto, as set forth in the most recent Form 10-Q Quarterly Report of the
Parent filed with the SEC. All such financial statements have been prepared in
accordance with GAAP, consistently applied (except as stated therein), and
fairly present in all material respects the financial position of the Parent and
its consolidated Subsidiaries as of the respective dates indicated and the
consolidated results of their operations and cash flows for the respective
periods indicated, subject in the case of any such financial statements which
are unaudited, to normal audit adjustments, none of which have had or could
reasonably be expected to have a Material Adverse Effect.
(b) The Parent has delivered or caused to be delivered to
Lenders and Agent prior to the execution and delivery of this Agreement,
complete and correct copies of the Parent's (i) Report on Form 10-K as filed
(without Exhibits) with the SEC for its fiscal year ended on December 31, 1999,
which contains a general description of the business and affairs of the Parent
and its Subsidiaries as of such date, and (iii) Report on Form 10-Q as filed
(without Exhibits) with the SEC for its fiscal quarter ended on September 30,
2000.
(c) Borrowers have delivered or caused to be delivered to
Lenders and Agent prior to the execution and delivery of this Agreement,
complete and correct copies of (i) the audited balance sheet of Mucho.com, Inc.
(a development stage enterprise) as of the fiscal year ended December 31, 1999,
and the related audited states of operations, stockholders' deficit and cash
flows for the period from inception of its operations on July 8, 1999, with
notes thereto, accompanied by the unqualified report thereon of its independent
accountants and (ii) the unaudited balance sheet of Mucho.com, Inc. as of the
fiscal quarter ended September 30, 2000, and the related statements of
operations, stockholders' deficit and cash flows for the fiscal quarter then
ended. All such financial statements have been prepared in accordance with GAAP,
consistently applied (except as stated therein), and fairly present in all
material respects the
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financial position of Team America Corporation and its consolidated Subsidiaries
as of the respective dates indicated and the consolidated results of their
operations and cash flows for the respective periods indicated, subject in the
case of any such financial statements which are unaudited, to normal audit
adjustments, none of which have had or could reasonably be expected to have a
Material Adverse Effect.
(d) Borrowers have delivered or caused to be delivered to
Lenders and Agent prior to the execution and delivery of this Agreement,
complete and correct copies of the Confidential Direct Placement Memorandum
dated August 2000 developed for Parent by SPP Capital Partners, LLC (the
"PLACEMENT MEMORANDUM") which contains, among other things, pro forma combined
statements of operations and balance sheets of Borrowers and their Subsidiaries
(after giving effect to the Transactions as of the dates described therein as if
the Transactions as described therein had occurred on such dates (the "PRO FORMA
FINANCIAL STATEMENTS"). The Pro Forma Financial Statements were prepared on
behalf of Borrowers and their Subsidiaries in good faith after taking into
account the existing and historical levels of business activity of Borrowers and
their Subsidiaries, known trends, including general economic trends, and all
other information, assumptions and estimates considered by management of
Borrowers and their Subsidiaries to be reasonable at the time, after giving
effect to the Transactions as described therein, and on a basis consistent with
the financial statements referred to in Section 5.5(a), Section 5.5(b) and
Section 5.5(c), as the case may be, other than as expressly set forth in such
Pro Forma Financial Statements. There are no statements or conclusions in any of
the Pro Forma Financial Statements which are based upon or include information
known to any of Borrowers or their Subsidiaries to be misleading in any material
respect or which fail to take into account material information regarding the
matters set forth therein. No facts are known to Borrowers or their Subsidiaries
as of the Effective Date which, if reflected in the Pro Forma Financial
Statements, could be expected to materially affect the reliability, performance,
accuracy and completeness of such Pro Forma Financial Statements or the assets,
liabilities, results of operations or cash flows reflected therein.
(e) The Placement Memorandum delivered by Borrowers to Agent
and Lenders prior to the execution and delivery of this Agreement contains,
among other things, complete and correct copies of unaudited financial
projections prepared by management of Borrowers or their Subsidiaries for
Borrowers and their Subsidiaries for the fiscal years 2001-2002 (the "FINANCIAL
PROJECTIONS"). The Financial Projections were prepared on behalf of Borrowers
and their Subsidiaries in good faith after taking into account the existing and
historical levels of business activity of Borrowers and their Subsidiaries,
known trends, including general economic trends, and all other information,
assumptions and estimates considered by management of Borrowers and their
Subsidiaries to be reasonable at the time, after giving effect to the
Transactions as described therein and on a basis consistent with the financial
statements referred to in Section 5.5(a), Section 5.5(b) and Section 5.5(c), as
the case may be, other than as expressly set forth in such Financial
Projections. There are no statements or conclusions in any of the Financial
Projections which are based upon or include information known to any of
Borrowers to be misleading in any material respect or which fail to take into
account material information regarding the matters set forth therein. No facts
are known to Borrowers and their Subsidiaries as of the Effective Date which, if
reflected in the Financial Projections, could be expected to materially affect
the reliability, performance, accuracy and completeness of such Financial
Projections or the assets, liabilities, results of operations or cash flows
reflected
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therein. On the Effective Date, each of Borrowers believed that the Financial
Projections were reasonable and attainable; PROVIDED THAT future changes in
facts and circumstances may render such Financial Projections unattainable. This
representation of Section 5.5(e) is not intended, nor shall it be considered, to
be a guaranty of future performance.
(f) Except as fully reflected in the financial statements and
notes related thereto described in Section 5.5(a), Section 5.5(b) and Section
5.5(c), there were as of the Effective Date (after giving effect to the
Transactions as described in the Pro Forma Financial Statements), no liabilities
or obligations with respect to any of Borrowers or any of their respective
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
have had or could reasonably be expected to have a Material Adverse Effect. As
of the Effective Date, Borrowers know of no basis for the assertion against any
of Borrowers or any of their respective Subsidiaries of any liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements delivered pursuant to Section 5.5(a), Section 5.5(b) and Section
5.5(c) which, either individually or in the aggregate, have had or could
reasonably be expected to have a Material Adverse Effect. As of the Effective
Date (after giving effect to the Transactions as described in the Pro Forma
Financial Statements), none of Borrowers nor any of their Subsidiaries will have
any outstanding Indebtedness for Borrowed Money other than the Loans and the
Permitted Indebtedness.
Section 5.6 NO ADVERSE CHANGES. No changes have occurred in the assets,
liabilities, performance, business, operations, properties, prospects or
condition (financial or otherwise) of any of Borrowers or their Subsidiaries
from those reflected in the audited balance sheets dated December 31, 1999
referred to in Section 5.5 hereof which, individually or in the aggregate, have
had, or could be reasonably expected to have, a Material Adverse Effect.
Section 5.7 TITLE TO ASSETS; MATERIAL LEASES. Borrowers and their
Subsidiaries have good, sufficient and legal title to, or leasehold interest in,
all the Property and assets reflected in the Pro Forma Financial Statements.
Borrowers and their Subsidiaries enjoy peaceful and undisturbed possession of
all Property subject to any lease or other right of such Borrower or Subsidiary
to possess and/or use such Property, and all such leases and other rights are
valid and in full force and effect, except where such invalidity or failure will
not have a Material Adverse Effect. All Material Leases in effect on the Closing
Date are set forth on SCHEDULE 5.7.
Section 5.8 INTELLECTUAL PROPERTY.
(a) SCHEDULE 5.8 sets forth a complete and correct list of all
Copyrights, Patents and Trademarks owned by Borrowers and their Subsidiaries on
the date hereof which are material to the business or financial condition of
Borrowers and their Subsidiaries. Borrowers and their Subsidiaries own and
possess the right to use, and have done nothing to authorize or enable any other
Person to use, any Copyright, Patent or Trademark listed on SCHEDULE 5.8 and all
registrations listed on SCHEDULE 5.8 are valid and in full force and effect.
Borrowers and their Subsidiaries own and possess the right to use all such
Copyrights, Patents and Trademarks.
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(b) SCHEDULE 5.8 sets forth a complete and correct list of all
licenses and other user agreements included in the Intellectual Property on the
date hereof which are material to Borrowers' and their Subsidiaries' business or
financial condition.
(c) Except for violations, infringements, proceedings and
claims which individually or in the aggregate could not reasonably be expected
to adversely affect to a material extent the business or financial condition of
any Borrower or Guarantor Subsidiary or Agent's and Lenders' rights in such
Collateral, (i) there is no violation by others of any right of any Borrower or
its Subsidiaries with respect to any Copyright, Patent or Trademark listed on
SCHEDULE 5.8; (ii) no Borrower or Subsidiary is infringing in any respect upon
any Copyright, Patent or Trademark of any other Person; and (iii) no proceedings
have been instituted or are pending against any Borrower or its Subsidiaries or,
to Borrowers' knowledge, threatened, and no claim against any Borrower or
Subsidiary has been received by any Borrower or Subsidiary, alleging any such
violation.
(d) Each Borrower and Subsidiary owns, or has a valid license
or sub-license in, all Intellectual Property used or necessary in the operation
of its businesses in the manner in which they are currently being conducted and
which are material to the assets, prospects, business, operations, financial
condition, liabilities or capitalization of Borrowers and their Subsidiaries. No
Borrower is aware of any existing or threatened infringement or misappropriation
of any Intellectual Property rights of others which is material to the assets,
prospects, business, operations, financial condition, liabilities or
capitalization of Borrowers and their Subsidiaries.
Section 5.9 INDEBTEDNESS.
(a) SCHEDULE 5.9 sets forth a true and complete list, as of
the date or dates set forth therein, of all Indebtedness for Borrowed Money of
Borrowers and each of the Subsidiaries which will be outstanding on the Closing
Date after giving effect to the Borrowing of the Initial Advance, other than the
Indebtedness created under the Loan Documents (all such Indebtedness herein
referred to as the "EXISTING INDEBTEDNESS"). As and to the extent Agent has so
requested, Borrowers have provided to Agent prior to the date of execution
hereof true and complete copies (or summary descriptions) of all agreements and
instruments governing the Existing Indebtedness listed in SCHEDULE 5.9 (the
"EXISTING INDEBTEDNESS AGREEMENTS").
(b) No Indebtedness of any Borrower or Subsidiary (including
but not limited to the Existing Indebtedness) is secured by or otherwise
benefits from any Lien on or with respect to the whole or any part of any
Borrower's or Subsidiary's properties or assets, present or future, other than
the Permitted Liens. There exists no default or event or condition which, with
the giving of notice or passage of time, or both, would constitute a default
under the provisions of any instrument evidencing such Indebtedness or of any
agreement relating thereto which would interfere with the priority of Agent's
lien on the Collateral.
Section 5.10 LITIGATION. There is no pending or threatened action,
suit, proceeding or investigation before any court, governmental or regulatory
authority, agency, commission or official, board of arbitration or arbitrator
against any Borrower or Subsidiary or in which any Borrower or Subsidiary is a
participant, except for such actions, suits, proceedings and
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investigations which individually or in the aggregate will not have a Material
Adverse Effect if adversely determined against any Borrower or Subsidiary. There
are no proceedings pending or threatened against any Credit Party which call
into question the validity or enforceability of any of the Loan Documents.
Section 5.11 NO MATERIALLY ADVERSE CONTRACTS. No Credit Party is a
party to or bound by any forward purchase contract, futures contract, covenant
not to compete, unconditional purchase, take or pay or other contracts,
agreements or instruments (whether written or oral) which restricts its ability
to conduct its business or, either individually or in the aggregate, has or
could reasonably be expected to have a Material Adverse Effect.
Section 5.12 TAXES AND TAX RETURNS, ETC.
(a) Each Borrower and Subsidiary has timely filed (inclusive
of any permitted extensions) or had filed on its behalf with the appropriate
taxing authorities all material returns (including without limitation, material
information returns and other material information) in respect of taxes required
to be filed through the date hereof. The information filed was complete and
accurate in all material respects at the time of filing.
(b) All taxes and assessments which have or may become due in
respect of the returns referred to in Section 5.12(a) for periods beginning
prior to the Effective Date have been timely paid or an adequate reserve has
been established therefor, as reflected in the most recent financial statements
of Borrowers and their Subsidiaries, except to the extent that such taxes and
assessments are being contested in good faith by appropriate proceedings
diligently pursued and conducted and for which such reserves as shall be
required by GAAP shall have been made, but only to the extent such failure to
discharge any such liabilities would not result in any additional liability
which could reasonably be expected to adversely affect to a material extent the
business or financial condition of any Borrower or Guarantor Subsidiary or which
would affect any of the Collateral. No Borrower or Guarantor Subsidiary has any
liabilities for taxes and assessments in excess of the amounts so paid or
reserves so established.
(c) No deficiencies for taxes have been claimed, proposed or
assessed by any taxing authority or other governmental authority against any
Borrower or Guarantor Subsidiary and no tax liens have been filed, in respect
thereof, except for deficiencies that are being, contested in good faith by
appropriate proceedings diligently pursued and conducted and for which such
reserves as shall be required by GAAP shall have been made, but only to the
extent such failure to discharge any such liabilities would not result in any
additional liability which could reasonably be expected to adversely affect to a
material extent the business or financial condition of any Borrower or Guarantor
Subsidiary or which would affect any of the Collateral. Except as set forth on
SCHEDULE 5.12(c), there are no pending or threatened audits, investigations or
claims for or relating to any liability of any Borrower or Guarantor Subsidiary
in respect to taxes, and there are no matters under discussion with any taxing
authorities or other governmental authorities with respect to taxes which are
likely to result in an additional liability of any Borrower or Guarantor
Subsidiary for taxes which could reasonably be expected to adversely affect to a
material extent the business or financial condition of any Borrower or Guarantor
Subsidiary or which would affect any of the Collateral. Except as described in
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SCHEDULE 5.12(c), no extension of a statute of limitations relating to taxes or
assessments is in effect with respect to any Credit Party.
(d) Except as set forth on SCHEDULE 5.12(d), no Borrower or
Subsidiary has any obligation under any tax sharing agreement or agreement
regarding payments in lieu of taxes.
Section 5.13 CONTRACTS WITH AFFILIATES, ETC.
(a) Except as permitted by Section 8.13 hereof, no Borrower or
Subsidiary is a party to or otherwise bound by any written agreements,
instruments or contracts (whether written or oral) with any Affiliate.
(b) There is no Indebtedness for Borrowed Money owing by any
Borrower or Subsidiary to any Affiliate nor is there Indebtedness for Borrowed
Money owing by any Affiliate to any Borrower or Subsidiary, except to the extent
any of the foregoing constitute Permitted Indebtedness.
Section 5.14 EMPLOYEE BENEFIT PLANS.
(a) Each Borrower and its ERISA Affiliates are in compliance
in all material respects with any applicable provisions of ERISA and the
regulations thereunder and of the Code with respect to all Employee Benefit
Plans.
(b) No Termination Event has occurred or is reasonably
expected to occur with respect to any Guaranteed Pension Plan.
(c) The actuarial present value of all benefit commitments
under each Guaranteed Pension Plan does not exceed the assets of that Plan.
(d) No Borrower nor any of its ERISA Affiliates has incurred
or reasonably expects to incur any withdrawal liability under ERISA to
Multiemployer Plans.
(e) Borrowers and their Subsidiaries have exercised their best
efforts, consistent with reasonable and customary practices of the professional
employer industry, to adopt Employee Benefit Plans that, in the event of any
action by the Internal Revenue Service or other governmental agency that causes
Borrowers not to be treated as the employers of record of their personnel for
purposes of the Code and ERISA on a prospective basis, will not result in a
Material Adverse Effect.
As used in this Section 5.14, the terms "actuarial present value" and
"benefit commitments" shall have the meanings specified in Section 4001 of
ERISA.
Section 5.15 GOVERNMENTAL REGULATION. No Borrower or Subsidiary is a
"public utility company", a "holding company" or a "subsidiary" or an
"affiliate" of a "holding company," as such terms are defined in the federal
Public Utility Holding Company Act of 1935, as amended. No Borrower or
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," as such terms are defined in the Federal Investment
Company Act of 1940, as amended. No Borrower or Subsidiary is subject to
regulation under the Public Utility Holding Company Act 1935, the Federal Power
Act, the Interstate Commerce Act or the Investment Company Act of
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1940 or to any federal or state statute or regulation limiting its ability to
incur Indebtedness for Borrowed Money.
Section 5.16 SECURITIES ACTIVITIES. No Borrower or Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulation G, T, U and X of the Board of Governors of the Federal Reserve
System.
Section 5.17 DISCLOSURE. Neither this Agreement, any other Loan
Document, nor any other document, certificate or written statement furnished to
Agent or any Lender by or on behalf of any Credit Party for use in connection
with the transactions contemplated by this Agreement, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading as of the date of
such document, certificate or other statement. The assumptions upon which all
pro forma and projected financial statements which have been delivered to Agent
and each Lender are based as stated therein and provide reasonable estimations
of future performance. There is no fact known to Borrowers which has or which
could reasonably be expected in the future to have a Material Adverse Effect.
Section 5.18 NO MATERIAL DEFAULT. No Borrower or Subsidiary is in
default under any order, writ, judgment, injunction, decree, statute or
governmental rule, indenture, agreement, contract, lease or other instrument or
contract applicable to it, which default would have a Material Adverse Effect or
adversely effect any Credit Party's performance of any covenants or conditions
respecting any of its Indebtedness, and no holder of any Indebtedness of any
Borrower or Subsidiary has given notice of any asserted default thereunder, and
no liquidation or dissolution of such Borrower or Subsidiary and no
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings relative to such Borrower or Subsidiary or its Property is pending
or is threatened.
Section 5.19 ENVIRONMENTAL CONDITIONS.
(a) Each Credit Party and its Subsidiaries have obtained all
necessary material permits, licenses, variances, clearances and all other
necessary approvals (collectively the "EPA PERMITS") for use of the Real Estate
and the operation and conduct of its business from all applicable federal,
state, and local governmental authorities, utility companies or
development-related entities including, but not limited to, any and all
appropriate federal or state environmental protection agencies and other county
or city departments, public water works and public utilities in regard to the
use of the Real Estate and the operation and conduct of its business, and the
handling, transporting, treating, storage, disposal, discharge, or Release of
Hazardous Substances, if any, into, on or from the environment (including, but
not limited to, any air, water, or soil).
Each issued EPA Permit is in full force and effect, has not expired or
been suspended, denied or revoked, and is not under challenge by any Person.
Each Credit Party and its Subsidiaries is in compliance with each issued EPA
Permit.
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(b) None of the Credit Parties or their Subsidiaries, the Real
Estate, nor any other Property owned or leased by any of the Credit Parties or
their Subsidiaries is subject to any material private or governmental
litigation, threatened litigation, Lien or judicial or administrative notice,
order or action relating to Hazardous Substances or environmental problems,
impairments or liabilities with respect to the Real Estate or such other
Property.
(c) There has been no "release" (as defined in Section 101(22)
of CERCLA) into, on or from any Real Estate and no Hazardous Substances (except
"household waste" as that term is defined at 40 C.F.R. 261.4(b)(1) (1990)) are
located on or have been treated, stored, processed, disposed of, handled,
transported to or from, disposed of upon the Real Estate during any Credit
Party's or its Subsidiary's ownership or into, upon or from the environment
including, but not limited to, any air, water, or soil which has had or could
reasonably be expected to have a Material Adverse Effect. No Credit Party nor
any of its Subsidiaries has allowed any Hazardous Substance to exist or be
treated, stored, disposed, Released, located, discharged, possessed, managed,
processed, or otherwise handled on the Real Estate or in the operation or
conduct of its respective businesses in violation of Environmental Laws. Each
Credit Party and its Subsidiaries has complied in all material respects with all
Environmental Laws affecting the Real Estate.
(d) Each Credit Party and each of its Subsidiaries do not and
shall not transport, in any manner, any Hazardous Substances except in the
ordinary course of business in compliance with Environmental Laws.
(e) No Credit Party nor any of its Subsidiaries has received
written notice of any circumstances which would result in any material
obligation under any Environmental Law to investigate or remediate any Hazardous
Substances in, on or under the Real Estate.
Section 5.20 LICENSES AND PERMITS. Each Borrower and each of its
Subsidiaries owns or possesses all Licenses and Permits, and rights with respect
thereto, necessary for the conduct of its business as presently conducted and
proposed to be conducted, except for Licenses and Permits with respect to which
the failure to own or possess such License or Permit would not have a Material
Adverse Effect, without any known conflict with the rights of others and, in
each case, free of any Lien not permitted by Section 8.8. To the extent set
forth above, all of the foregoing Licenses and Permits are in full force and
effect, and each Borrower and each of its Subsidiaries is in compliance with the
foregoing without any known conflict with the valid rights of others. No event
has occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such License or Permit, or affect
the rights of Borrowers or their Subsidiaries thereunder.
Section 5.21 SPECIAL FLOOD HAZARD DETERMINATION. None of the Real
Estate covered by a Mortgage is located within a hundred year flood plain or an
area identified by FEMA as being in a special flood hazard area.
Section 5.22 GENERAL COLLATERAL REPRESENTATION.
(a) Each Credit Party is the sole owner of and has good and
sufficient title to its Collateral, free from all Liens in favor of any Person
other than Agent (for the ratable benefit of Lenders), except for Permitted
Liens, and except as disclosed on SCHEDULE 5.22(a), has full
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right and power to grant Agent a security interest therein for the ratable
benefit of Lenders and to make the assignments under the Collateral Assignments.
All information furnished to Agent and Lenders concerning the Collateral is and
will be complete, accurate and correct in all material respects when furnished.
(b) No security agreement, UCC Financing Statement, equivalent
security or Lien instrument or continuation statement covering all or any part
of the Collateral is on file or of record in any public office, except for those
disclosed in SCHEDULE 5.22(b), all of which shall be terminated and released in
connection with the Closing (other than those which constitute Permitted Liens)
and those which may have been filed (i) by a Credit Party in favor of Agent (for
the ratable benefit of Lenders) pursuant to this Agreement, or (ii) in respect
of the items of Collateral subject to the Permitted Liens.
(c) The provisions of this Agreement and each Security
Agreement are sufficient to create in favor of Agent, as of the Closing Date, a
valid and continuing lien on, and first security interest in, the types of the
Collateral hereunder and thereunder in which a security interest may be created
under Article 9 of the UCC. UCC Financing Statements have been duly executed on
behalf of the Credit Parties party thereto and the description of the Collateral
set forth therein is sufficient to perfect first priority security interests in
such Collateral in which a security interest may be perfected by the filing of
UCC Financing Statements, subject only to the Permitted Liens. When such UCC
Financing Statements are duly filed in the filing offices listed on SCHEDULE
5.22(c), and the requisite filing fees are paid, such filings will be sufficient
to perfect security interests in such of the Collateral of the Credit Parties
described in the UCC Financing Statements as can be perfected by filing (other
than Equipment affixed to real property so as to become fixtures), which
perfected security interests will be prior to all other Liens in favor of others
and rights of others, enforceable as such as against creditors of and purchasers
from the Credit Parties (other than purchasers of Inventory in the ordinary
course and Permitted Liens) and as against any present or future creditor
obtaining a Lien on such real property.
(d) Upon delivery to and possession by Agent of any Pledged
Stock pursuant to the terms of a Pledge Agreement, Agent shall possess a valid,
first priority security interest in such Pledged Stock in accordance with
Article 9 of the UCC.
(e) As of the Effective Date, no Person now having possession
or control of any of the Collateral consisting of Inventory or Equipment has
issued, in receipt therefor, a negotiable bill of lading, warehouse receipt or
other document of title.
Section 5.23 LIABILITIES OF INACTIVE SUBSIDIARIES. None of the Inactive
Subsidiaries has any indebtedness, obligations and other liabilities, whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, joint or several, or secured or unsecured, arising by contract,
operation of law or otherwise, which are classified as liabilities in accordance
with GAAP, that could reasonably be expected to have a Material Adverse Effect.
Section 5.24 LABOR RELATIONS. No Borrower nor any of the Subsidiaries
(i) is a party to any labor dispute affecting any bargaining unit or other group
of employees generally, (ii) is subject to any material strike, slow down,
workout or other concerted interruptions of operations by employees of a
Borrower or any Subsidiary, whether or not relating to any labor contracts,
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(iii) is subject to any significant pending or, to the knowledge of a Borrower,
threatened, unfair labor practice complaint, before the National Labor Relations
Board, (iv) is subject to any significant pending or, to the knowledge of a
Borrower, threatened, grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement, (v) is subject to any
significant pending or, to the knowledge of a Borrower, threatened, significant
strike, labor dispute, slowdown or stoppage, or (vi) is, to the knowledge of
Borrowers, involved or subject to any union representation organizing or
certification matter with respect to the employees of a Borrower or any of the
Subsidiaries, except (with respect to any matter specified in any of the above
clauses), for such matters as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
Section 5.25 SOLVENCY. Parent individually is, and Borrowers and
their Subsidiaries on a Consolidated basis are, Solvent. On and as of the
Closing Date, after giving effect to the Merger, the Tender Offer, the Preferred
Stock Transaction and all Indebtedness incurred by the Credit Parties
(including, but not limited to, the Loans), the Liens created, and to be
created, by each Credit Party in connection therewith and the payment by the
Credit Parties of all fees and expenses related thereto, each Borrower
individually, and Borrowers and their Subsidiaries on a Consolidated basis, will
be Solvent, determined as of the Closing Date.
ARTICLE 6
---------
AFFIRMATIVE COVENANTS OF BORROWERS
----------------------------------
Borrowers, jointly and severally, covenant with and warrant to Agent
and each Lender that, from and after the Closing Date and until all of the
Obligations are paid and satisfied in full except as otherwise expressly
consented to in writing by the Requisite Lenders (unless the context otherwise
requires):
Section 6.1 REPORTS AND OTHER INFORMATION.
(a) Borrowers shall provide to Agent and Lenders (other than
the last month of any fiscal quarter) within thirty (30) days after the close of
each month of each fiscal year of Parent, Consolidated balance sheets of Parent
and its Subsidiaries as of the end of such month and Consolidated statements of
income and statements of cash flow of Borrowers and their divisions and
Subsidiaries for such month, certified by the chief financial officer, principal
accounting officer or chief executive officer of Parent to the effect that such
financial statements, while not examined by independent public accountants,
reflect in his opinion and in the opinion of senior management of Parent, all
adjustments necessary to fairly present the consolidated financial position of
Borrowers and their Subsidiaries as at the end of such month and the results of
its operations for the month then ended in conformity with GAAP consistently
applied, subject only to year-end and audit adjustments, which statements shall
be delivered at the end of each month, together with a Compliance Certificate of
such officer stating that as of the date of such certificate that, to the best
of his knowledge, after reasonable inquiry, no event has occurred which
constitutes an Event of Default or would constitute an Event of Default with the
giving of notice or the lapse of time or both, or, if an Event of Default or
such an event has occurred and is continuing, a statement as to the nature
thereof and the action which Borrowers have taken or
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propose to take with respect thereto, and further setting out in such detail as
Lenders may reasonably require Borrowers' compliance with the requirements of
Article 7 and Sections 8.8 and 8.11 hereof.
(b) Borrowers shall provide to Agent and Lenders within
forty-five (45) days after the close of each of the first three (3) fiscal
quarters of each fiscal year of Parent, balance sheets of Parent and its
Subsidiaries as of the end of such quarter and Consolidated statements of income
and statements of cash flow of Parent and its divisions and Subsidiaries for
such quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified by the chief financial
officer, principal accounting officer or chief executive officer of Parent to
the effect that such financial statements, while not examined by independent
public accountants, reflect in his opinion and in the opinion of senior
management of Borrowers, all adjustments necessary to present fairly the
financial position of Borrowers and their Subsidiaries as at the end of such
quarter and the results of their operations for the quarter then ended in
conformity with GAAP consistently applied, subject only to year-end and audit
adjustments, which statements shall be delivered at the end of each fiscal
quarter, together with a Compliance Certificate of such officer stating that as
of the date of such certificate that, to the best of his knowledge, after
reasonable inquiry, no event has occurred which constitutes a Default or an
Event of Default or would constitute a Default or an Event of Default with the
giving of notice or the lapse of time or both, or, if a Default or an Event of
Default or such an event has occurred and is continuing, a statement as to the
nature thereof and the action which Borrowers have taken or propose to take with
respect thereto, and further setting out in such detail as Lenders may
reasonably require Borrowers' compliance with the requirements of Article 7 and
Sections 8.8 and 8.11 hereof.
(c) Borrowers shall provide to Agent and Lenders within ninety
(90) days after the end of each fiscal year of Parent a copy of the annual
financial statements for such year for Parent and its Subsidiaries, including
therein a copy of the Consolidated balance sheets of Parent and its Subsidiaries
as of the end of such fiscal year and Consolidated statements of income and
statements of cash flow and statements of shareholders' equity of Parent and its
divisions and Subsidiaries, certified without qualification by the Accountants,
together with a Compliance Certificate of the chief financial officer, principal
accounting officer or chief executive officer of Parent stating that, as of the
date of such certificate, to the best of his knowledge and after reasonable
inquiry, no event has occurred which constitutes a Default or an Event of
Default or, if a Default or an Event of Default or such an event has occurred
and is continuing, a statement as to the nature thereof and the action which
Borrowers have taken or propose to take with respect thereto and further setting
out in such detail as Lenders may reasonably require Borrowers' compliance with
the requirements of Article 7 and Sections 8.8 and 8.11 hereof.
(d) Together with each delivery of financial statements of
Borrowers and their Subsidiaries pursuant to Sections 6.1(b) and 6.1(c),
Borrowers will deliver to Agent and Lenders a management report as outlined in
its annual report to shareholders: (1) describing the operations and financial
condition of Borrowers and their Subsidiaries for the period then ended and the
portion of the current fiscal year then elapsed (or for the fiscal year then
ended in the case of year-end financials); (2) setting forth in comparative form
the corresponding figures for the corresponding periods of the previous fiscal
year and the corresponding figures from the
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most recent Projections for the current fiscal year delivered to Agent and
Lenders pursuant to Section 6.1(e); and (3) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer, principal
accounting officer or controller of Parent to the effect that such information
fairly presents the results of operations and financial condition of Borrowers
and their Subsidiaries as at the dates and for the periods indicated.
(e) Not later than December 31 of each calendar year,
Borrowers will deliver to Agent and Lenders the Projections for the forthcoming
three fiscal years, year by year, and for the forthcoming fiscal year, month by
month.
(f) Together with each delivery of financial statements of
Borrowers and their Subsidiaries pursuant to Sections 6.1(b) and 6.1(c),
Borrowers shall provide to Agent and Lenders a report of an independent
qualified third party acceptable to Agent reporting on and providing an analysis
of workers compensation claims affecting Borrowers and their Subsidiaries and
the adequacy of their reserves and insurance policies therefor (including
reimbursements for premiums billed and collected from customers) substantially
in the form of the report delivered pursuant to Section 4.1(v) and containing
such other information as may be reasonably required by Agent.
(g) [Reserved.]
(h) Borrowers shall provide to Agent and Lenders as soon as
possible, and in any event within fifteen (15) days after any Borrower knows or
has reason to know that any Termination Event with respect to any Plan has
occurred, a statement of the chief financial officer, principal accounting
officer or treasurer of Parent describing such Termination Event and the action
which Borrowers propose to take with respect thereto.
(i) Borrowers shall provide to Agent and Lenders as soon as
possible, and in any event within five (5) days after first becoming aware of
the occurrence of a Default or an Event of Default, continuing on the date of
such statement, a statement of the chief financial officer, principal accounting
officer or treasurer of Parent setting forth the details of such Default or
Event of Default, and the action which Borrowers propose to take with respect
thereto.
(j) If (and on each occasion that) any of the following events
shall occur:
(i) any Loan Document shall at any time be terminated,
canceled or rescinded for any reason whatever;
(ii) any action at law, suit in equity or other legal
proceeding shall at any time be commenced or threatened in writing by any Person
(A) to terminate, cancel or rescind any Loan Document, or (B) to enforce any
other Person's performance or observance of or compliance with any covenants,
agreements or obligations under any Loan Document; or
(iii) any Person which is a party to or otherwise bound by
any Loan Document shall fail or refuse to perform, comply with or observe or
shall otherwise breach any one or more of the material covenants, agreements or
obligations under such Loan Document;
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then Borrowers will promptly (and, in any event, within five (5) Business Days)
after any Borrower shall have first become aware of the occurrence of any such
event, furnish to Agent and Lenders written notice setting forth brief
particulars thereof.
(k) Borrowers shall provide Agent and Lenders with the following
additional reports:
(A) within ninety (90) days after the close of each fiscal
year of each Borrower copies of the portions of any and all management letters
from the Accountants, if any, to the board of directors of such Borrower
regarding the various accounting practices and control procedures used by such
Borrower;
(B) promptly after any Borrower becomes aware of the
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which may adversely affect such Borrower
and which are not fully covered by insurance without the applicability of any
co-insurance provisions or which have not been bonded and in which either (A)
the amount in controversy exceeds Fifty Thousand Dollars ($50,000) for any
single proceeding or Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate or (B) would cause a Material Adverse Effect;
(C) as soon as practicable after any Borrower becomes aware
of a claim by any Person that any Borrower is in default under any agreement
entered into in connection with Indebtedness for Borrowed Money in excess of Two
Hundred Fifty Thousand Dollars ($250,000), notice of any such claim or default;
(D) notice of any change in the conduct of the business,
prospects or financial condition of any Borrower promptly upon any Borrower
becoming aware of any such change which would have a Material Adverse Effect;
(E) notice of any release of Hazardous Substances on the
Real Estate that is in material violation of Environmental Laws or would require
remediation pursuant to applicable federal or state law or of any notification
having been filed with regard to a release of Hazardous Substances on or into
Real Estate under the Federal Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq., or the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., or any other
applicable environmental law. Such notice shall indicate the steps Borrowers
have taken or will take to remediate all such hazardous environmental conditions
if any such steps are required of it by applicable Environmental Law and the
estimated costs of such remediation; and
(F) if (and on each occasion that) any event shall at any
time occur or any condition shall at any time develop which constitutes a
Default or an Event of Default, then, promptly (and, in any event, within five
(5) Business Days) after any Borrower shall have first become aware of the
occurrence or development of any such event or condition, Borrowers will furnish
or cause to be furnished to Agent and Lenders a written notice specifying the
nature and the date of the occurrence of such event or (as the case may be), the
nature and the period of
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existence of such condition and what action Borrowers are taking or propose to
take with respect thereto.
(l) Borrowers shall also provide Agent and Lenders with such
other information relating to each Borrower or any of its Subsidiaries
(including, without limitation, any Employee Benefit Plan) as Agent and Lenders
may from time to time reasonably request. To the extent Agent and Lenders are
obligated to do so by applicable law, rule or regulation, it may deliver to any
regulatory body having jurisdiction over it, copies of the reports and other
information provided by Borrowers to Agent and Lenders pursuant to this Section
6.1.
(m) The financial statements to be furnished to Agent and
Lenders pursuant hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved (except with respect to the
Preferred Stock issued pursuant to the Preferred Stock Transaction to the extent
contemplated by this Agreement and except as set forth in the notes thereto or
as otherwise disclosed in writing by Borrowers to Agent and Lenders); PROVIDED,
THAT if at any time the computations determining compliance with Article 7
utilize accounting principles different from those utilized in the financial
statements furnished to Agent and Lenders, such computations shall set forth in
reasonable detail a description of the differences and the effect upon such
computations.
Section 6.2 MAINTENANCE OF PROPERTY; AUTHORIZATION; INSURANCE.
(a) Each Borrower covenants to keep and maintain all of its
Property (other than Property which is obsolete and no longer used by such
Borrower) in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time to make, or use all reasonable legal remedies to
cause to be made, all proper repairs, renewals or replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
(b) At its own cost and expense, each Borrower shall obtain
and maintain during the term of this Agreement (i) insurance against loss,
destruction or damage to its properties as Agent and Lenders may require from
time to time to fully protect Agent's and Lenders' interests in the Collateral,
(ii) minimum flood insurance as required by FEMA or any other government agency
or when required by federal, state or local law, statute, regulation or
ordinance and as may be required by Agent and Lenders, (iii) insurance against
public liability and third party property damage, and (iv) such other insurance
which, in the judgment of Agent, is adequate and reasonable for the business of
Borrowers and their Subsidiaries based on reasonable and customary best
practices of entities engaged in comparable business activities, covering
officers and directors liability, fidelity risks and fiduciary risks. All such
policies of insurance shall be with such insurance companies, in such amounts
and covering such risks as are at all times reasonably satisfactory to Agent and
Lenders and naming Agent, for the ratable benefit of Lenders, as mortgagee, loss
payee and additional insured as its interests may appear. Each Borrower agrees
to deliver to Agent and Lenders upon request insurance certificates or policies
evidencing compliance with the above requirements. Each Borrower covenants,
warrants and represents that it will not do any act or voluntarily suffer or
permit any act to be done whereby any insurance required hereunder shall or may
be suspended, impaired or defeated. In the event that any
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item of Collateral shall be lost, destroyed or irreparably damaged from any
cause whatsoever during the term hereof, Borrowers agree to proceed diligently
and cooperate fully with Agent and Lenders in the recovery of any and all
proceeds of insurance applicable thereto, and the carriers named therein are
hereby directed by Borrowers to make payment for such loss to Agent, on behalf
of Lenders, and not to Borrowers and Lenders jointly. If any insurance losses
are paid by check, draft or other instrument payable to any Borrower and Agent
and Lenders jointly, Agent may endorse the name of such Borrower thereon and do
such other things as it may deem advisable to reduce the same to cash. Provided
Borrowers are not in Default in any of their Obligations under any of the Loan
Documents, all loss recoveries received by Agent and Lenders upon any such
insurance shall be paid by Agent and Lenders to Borrowers so long as such
proceeds promptly are reinvested in Borrowers' business. Should Borrowers then
be in Default in any of their Obligations under any of the Loan Documents, such
cash resources may be applied and credited by Agent and Lenders to any
Obligation, subject to Section 2.7(b). Borrowers further covenant that they
shall require that the insurer with respect to each such insurance policy
provide for thirty (30) days' advance written notice to Agent and Lenders of any
cancellation or termination of, or other change of any nature whatsoever in, the
coverage provided under any such policy. Notwithstanding the foregoing, any Net
Proceeds of insurance policies shall be subject to the provisions of Section
2.6(e).
(c) Borrowers covenant and agree to cause the Guarantor
Subsidiaries to comply with the provisions of this Section 6.2 as if they were
Borrowers hereunder.
Section 6.3 KEY MAN LIFE INSURANCE. Parent shall obtain and maintain
key man life insurance policies covering the persons named in SCHEDULE 6.3 in
amounts not less than the amounts set forth on SCHEDULE 6.3 for such
individuals, and Parent shall maintain such insurance in full force and effect
until the Obligations have been paid in full and all agreements among the Credit
Parties, Agent and Lenders related thereto have been terminated. Parent shall
cause Agent to be the named primary beneficiary under each such policy as its
interests may appear for the benefit of itself and Lenders in form and substance
satisfactory to Agent and Lenders with respect to such policy.
Section 6.4 CORPORATE EXISTENCE. Borrowers shall cause Credit Party to
preserve and maintain its existence as a corporation or other legal entity and
all of its rights, franchises and privileges as a corporation or other legal
entity.
Section 6.5 INSPECTION RIGHTS. At any reasonable time, upon reasonable
notice, and from time to time Borrowers shall and shall cause each of their
Subsidiaries to permit Agent or any Lender, or any of their agents,
representatives or current or prospective participants in the Loans and/or
Letters of Credit, to inspect the Collateral, to examine and make copies of and
abstracts from the records and books of account of, to visit the properties of,
Borrowers and their Subsidiaries and subject to limitations of any applicable
laws and regulations, to discuss the affairs, finances and accounts of Borrowers
and their Subsidiaries with any of their officers, employees, agents or the
Accountants. Agent may require semi-annual field audits of the Collateral and
business operations of Borrowers and their Subsidiaries to be conducted by
auditors of Agent's selection at Borrowers' expense.
Section 6.6 PAYMENT OF TAXES AND CLAIMS. Borrowers shall pay or cause
to be paid all taxes, assessments and other governmental charges imposed upon
the properties or assets of
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Borrowers and their Subsidiaries or in respect of any of their franchises,
businesses, income or profits before any material penalty or interest accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become due and payable and
which by law have become due and payable and which by law have become a Lien or
charge upon any of their properties or assets; PROVIDED THAT (unless any
material item of property would be lost, forfeited or materially damaged as a
result thereof) no such charge or claim need be paid if the amount,
applicability or validity thereof is currently being contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which reserves or
other appropriate provisions have been set aside for the payment thereof which,
in the opinion of Agent and Lenders are adequate.
Section 6.7 COMPLIANCE WITH LAWS.
(a) Borrowers will and will cause their Subsidiaries to comply
with all applicable federal, state and local laws, rules, regulations and orders
pertaining to the operation of their businesses, paying before the same become
delinquent all taxes, assessments and governmental charges or levies imposed
upon them or upon their income or profits or their properties, and paying all
lawful claims which if unpaid might become a Lien upon any of their properties,
except (i) to the extent contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or Lien resulting from the nonpayment
thereof and with respect to which reserves or other appropriate provisions have
been set aside for the payment thereof which, in the opinion of Agent and
Lenders are adequate and/or (ii) to the extent any such failure of compliance or
payment would not result in any liability which could reasonably be expected to
adversely affect to a material extent the business or financial condition of any
Borrower or Guarantor Subsidiary or which would affect any of the Collateral.
(b) Borrowers will promptly notify each Lender in the event
that any Borrower or Subsidiary receives any notice, claim or demand from any
governmental agency which alleges that any Borrower or Subsidiary is in material
violation of any of the terms of, or has materially failed to comply with any
applicable order issued pursuant to any federal, state or local statute
regulating its operation and business, including, but not limited to, the
Occupational Safety and Health Act, the Federal Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act and the Federal Water Pollution Control Act.
Section 6.8 NOTICE OF OTHER EVENTS. Immediately upon any Borrower first
becoming aware of any of the following occurrences, Borrowers will furnish or
cause to be furnished to Agent written notice with full particulars of (i) the
business failure, insolvency or bankruptcy of any Borrower or Subsidiary; (ii)
the rescission, cancellation or termination, or the creation or adoption, of any
material agreement or contract to which any Borrower or Subsidiary is a party;
(iii) any material labor dispute, any attempt by any labor union or organization
representatives to organize or represent employees of any Borrower, or any
unfair labor practices or proceedings of the National Labor Relations Board with
respect to any Borrower; or (iv) any defaults or events of default under any
material agreement of any Borrower or Subsidiary or any material violations of
any laws, regulations, rules or ordinances of any governmental or regulatory
body by any Borrower or Subsidiary.
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Section 6.9 COMMUNICATION WITH ACCOUNTANTS. Subject to limitations of
applicable laws and regulations, including but not limited to those of the SEC,
Parent authorizes Agent or any Lender to communicate directly with the
Accountants and authorizes the Accountants to disclose to Agent or such Lender
any and all financial statements and other information of any kind, including
copies of any management letter or the substance of any oral information or
conversation that such Accountants may have with respect to the business,
financial condition and other affairs of any Borrower.
Section 6.10 PAYMENT OF INDEBTEDNESS. Borrowers will duly and
punctually pay or cause to be paid principal and interest on the Loans and all
fees and other amounts payable under this Agreement or under any other Loan
Document in accordance with the terms hereunder and thereunder. Borrowers shall
pay and shall cause their Subsidiaries to pay all other Indebtedness (whether
existing on the date hereof or arising at any time thereafter) punctually in
accordance with trade practices or within any applicable period of grace except
to the extent that any such obligation is contested in good faith by proper
proceedings and Borrowers have provided Agent and Lenders evidence that any Lien
resulting from the non-payment thereof has been bonded or reserves for any such
obligation have been set aside (or is otherwise permitted by this Agreement) for
the payment thereof which, in the opinion of Agent and Lenders, are adequate.
Section 6.11 PAYMENT OF FEES.
(a) COMMITMENT FEE. Borrowers agree to pay to Agent for the
ratable benefit of Lenders, the Commitment Fee, which shall begin accruing on
the Closing Date, in monthly installments in arrears with the first installment
being due on the first Business Day of the month following the month in which
the Closing occurs, and subsequent installments being due on the first Business
Day of each month thereafter until all Commitments have been terminated, at
which time all accrued amounts of the Commitment Fee shall be due and payable;
PROVIDED THAT a Lender's ratable portion of the accrued Commitment Fee shall be
payable upon termination of its Commitments. Agent shall distribute the
Commitment Fee to Lenders in accordance with each Lender's Pro Rata Share.
(b) AGENCY FEE. Borrowers agree to pay to Agent, on the
Closing Date and annually on the anniversary of the Closing Date, a fee in an
amount equal to Twenty-Five Thousand Dollars ($25,000), PLUS Five Thousand
Dollars ($5,000) for each Lender other than Agent.
Section 6.12 PERFORMANCE OF OBLIGATIONS UNDER CERTAIN DOCUMENTS.
Borrowers will and will cause each other Credit Party to duly and properly
perform, observe and comply with all of their agreements, covenants and
obligations under this Agreement and each of the other Loan Documents to which
they are parties.
Section 6.13 GOVERNMENTAL CONSENTS AND APPROVALS.
(a) Borrowers will obtain or cause to be obtained and will
cause each other Credit Party, to obtain all such approvals, consents, orders,
authorizations and licenses from, give all such notices promptly to, register,
enroll or file all such agreements, instruments or documents promptly with, and
promptly take all such other action with respect to, any
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governmental or regulatory authority, agency or official, or any central bank or
other fiscal or monetary authority, agency or official, as may be required from
time to time under any provision of any applicable law:
(i) for the performance by the Credit Parties of any of their
agreements or obligations under the Notes, this Agreement or any of the other
Loan Documents or for the payment by the Credit Parties to Agent at its Head
Office of any sums which shall become due and payable by the Credit Parties to
Agent or any Lender thereunder;
(ii) to ensure the continuing legality, validity, binding
effect or enforceability of the Notes or any of the other Loan Documents or of
any of the agreements or obligations thereunder of the Credit Parties; or
(iii) to continue the proper operation of the business and
operations of the Credit Parties.
(b) Borrowers shall and will cause each other Credit Party
to duly perform and comply with the terms and conditions of all such approvals,
consents, orders, authorizations and Licenses and Permits from time to time
granted to or made upon the Credit Parties.
Section 6.14 EMPLOYEE BENEFIT PLANS AND GUARANTEED PENSION PLANS. Each
Borrower will and will cause each of its ERISA Affiliates to (a) comply in all
material respects with all requirements imposed by ERISA and the Code applicable
from time to time to any of its Guaranteed Pension Plans or Employee Benefit
Plans, (b) make full payment when due of all amounts which, under the provisions
of Employee Benefit Plans or under applicable law, are required to be paid as
contributions thereto, (c) not permit to exist any accumulated funding
deficiency, whether or not waived, (d) file on a timely basis all reports,
notices and other filings required by any governmental agency with respect to
any of its Employee Benefit Plans, (e) make any payments to Multiemployer Plans
required to be made under any agreement relating to such Multiemployer Plans, or
under any law pertaining thereto, (f) not amend or otherwise alter any
Guaranteed Pension Plan if the effect would be to cause the actuarial present
value of all benefit commitments under each Guaranteed Pension Plan to be less
than the current value of the assets of such Guaranteed Pension Plan allocable
to such benefit commitments, (g) furnish to all participants, beneficiaries and
employees under any of the Employee Benefit Plans, within the periods prescribed
by law, all reports, notices and other information to which they are entitled
under applicable law, and (h) take no action which would cause any of the
Employee Benefit Plans to fail to meet any qualification requirement imposed by
the Code. As used in this Section 6.14, the term "accumulated funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412 of
the Code, and the terms "actuarial present value", "benefit commitments" and
"current value" have the meaning specified in Section 4001 of ERISA.
Section 6.15 FURTHER ASSURANCES. Each Borrower will execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such further assurances and other agreements or instruments, and
take or cause to be taken all such other action, as shall be reasonably
requested by Agent from time to time in order to give full effect to any of the
Loan Documents, including but not limited to the release and termination of all
Liens on the Collateral (other than Permitted Liens).
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Section 6.16 INTEREST RATE RISK MANAGEMENT. Borrowers shall purchase
and maintain in full force and effect during the term of this Agreement,
effective on or before thirty (30) days following the Closing Date, an interest
rate swap, interest rate cap, interest rate collar or similar reasonable and
customary arrangement designed to protect Borrowers against the effect of
fluctuations in the Interest Rate, such arrangement and related agreements to be
in form and substance reasonably acceptable to Agent and Lenders.
Section 6.17 BORROWERS' DEPOSITORY ACCOUNTS. Borrowers and their
Subsidiaries shall concentrate their principal bank and depository accounts with
Lenders, including without limitation, all demand deposit, time deposit,
concentration and zero balance accounts, except that Borrowers may maintain
operating accounts with local financial institutions in the locales of its
non-principal offices, PROVIDED THAT, in any event, Borrowers and their
Subsidiaries shall use reasonable efforts to maintain such accounts with one or
more of Lenders.
Section 6.18 USE OF LOAN PROCEEDS. Borrowers shall use all Loan
proceeds disbursed only in accordance with the purposes set forth in Section 2.9
of this Agreement.
Section 6.19 SEC REPORTS AND REGISTRATION STATEMENTS. Promptly upon
transmission thereof or other filing with the SEC, copies of all registration
statements and annual, quarterly or current reports that Borrowers or any of the
Subsidiaries files with the SEC, and promptly upon transmission thereof, each
proxy statement, annual report, certificate, notice or other document sent by a
Borrowers to the holders of any of its securities (or any trustee under any
indenture which secures any of its Securities or pursuant to which such
Securities are issued).
Section 6.20 ADDITIONAL SECURITY DOCUMENTS.
(a) In order to secure the Obligations of Borrowers, Borrowers
will pledge, and will cause each applicable Subsidiary of a Borrower to pledge,
to Agent for the ratable benefit of Lenders, as collateral security, the Capital
Stock of, or other equity or ownership interest in, each Subsidiary created or
acquired and owned by a Borrower or any Subsidiary of a Borrower after the
Effective Date. The above-described pledges of Capital Stock and other ownership
interests shall grant to Agent, as collateral agent, a first priority perfected
lien on one hundred percent (100%) of the Capital Stock and other ownership
interests of each such Subsidiary that is now or hereafter owned by a Borrower
or any Subsidiary of a Borrower, as the case may be.
(b) In order to secure the Obligations of Borrowers, Borrowers
will require and cause any Subsidiary that is created or acquired and owned
after the Effective Date to execute and deliver to Agent (i) a Guaranty
substantially in the form of EXHIBIT M, (ii) a Security Agreement substantially
in the form of EXHIBIT N, and (iii) a Collateral Assignment of Intellectual
Property substantially in the form of EXHIBIT B, and such other agreements,
assignments and instruments creating or purporting to create a lien in favor of
Agent for the ratable benefit of the Lenders, as Agent may require.
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ARTICLE 7
---------
FINANCIAL COVENANTS
-------------------
Borrowers, jointly and severally, covenant with and warrant to Agent
and each Lender that, from and after the Closing Date and until all of the
Obligations are paid and satisfied in full except as otherwise expressly
consented to in writing by the Requisite Lenders (unless the context otherwise
requires):
Section 7.1 MINIMUM CURRENT RATIO. Borrowers shall not permit the
Consolidated Current Ratio of Borrowers and their Subsidiaries as of each
Computation Date set forth in the table below to be less than the amount set
forth opposite such Computation Date.
Section 7.2 INTEREST COVERAGE RATIO. Borrowers shall not permit the
ratio of Consolidated EBITDA to Consolidated Cash Interest Expense for the
Reference Period ending on each Computation Date set forth in the table below to
be less than the amount set forth opposite such Computation Date.
Section 7.3 FIXED CHARGE COVERAGE RATIO. Borrowers shall not permit the
ratio of Consolidated Cash Flow to Consolidated Fixed Charges for the Reference
Period ending on each Computation Date set forth in the table below to be less
than the amount set forth opposite such Computation Date.
Section 7.4 RESERVED.
Section 7.5 LEASE OBLIGATIONS. Borrowers and their Subsidiaries will
not become obligated to pay rent under any leases or other rental agreements for
Equipment (excluding Capital Leases) under which the amount of the aggregate
lease or other payments for all such agreements or arrangements on a
Consolidated basis exceeds Five Hundred Thousand Dollars ($500,000) for any
fiscal year of Borrowers.
Section 7.6 MINIMUM EBITDA. Borrowers shall not permit the Consolidated
EBITDA of Borrowers and their Subsidiaries for the Reference Period ending on
the applicable Computation Date to be less than the amount set in the table
below opposite such Computation Date.
Section 7.7 MAXIMUM OPERATING LOSSES. Borrowers shall not permit the
EBITDA of Mucho.com for the fiscal quarter of Mucho.com ending on the
Computation Date set forth below in this Section 7.7 to be less than the amounts
set forth below in this Section 7.7 opposite such Computation Date.
---------------------------------- -----------------------------------------
Computation Date Mucho, Inc. Quarterly EBITDA
---------------- ----------------------------
March 31, 2001 (724,704)
---------------------------------- -----------------------------------------
June 30, 2001 (741,922)
---------------------------------- -----------------------------------------
September 30, 2001 (780,042)
---------------------------------- -----------------------------------------
December 31, 2001 (721,483)
---------------------------------- -----------------------------------------
March 31, 2002 (613,135)
---------------------------------- -----------------------------------------
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---------------------------------- -----------------------------------------
Computation Date Mucho, Inc. Quarterly EBITDA
---------------- ----------------------------
June 30, 2002 (677,242)
---------------------------------- -----------------------------------------
September 30, 2002 (649,239)
---------------------------------- -----------------------------------------
December 31, 2002 (632,324)
---------------------------------- -----------------------------------------
March 31, 2003 (569,300)
---------------------------------- -----------------------------------------
June 30, 2003 (324,423)
---------------------------------- -----------------------------------------
September 30, 2003 (241,129)
---------------------------------- -----------------------------------------
December 31, 2003 (56,007)
---------------------------------- -----------------------------------------
Thereafter Greater than or equal to zero
---------------------------------- -----------------------------------------
Section 7.8 CONSOLIDATED SENIOR DEBT LEVERAGE RATIO. Borrowers shall
not permit the ratio of Consolidated Indebtedness for Borrowed Money in respect
of senior Indebtedness to Consolidated EBITDA for the Reference Period ending on
the Computation Date set forth in the table below to be greater than the amount
set forth opposite such Computation Date.
Section 7.9 PARENT SENIOR DEBT LEVERAGE RATIO. Parent shall not permit
the ratio of Parent's Indebtedness for Borrowed Money in respect of senior
Indebtedness to Parent's EBITDA for the Reference Period ending on the
Computation Date set forth in the table below to be greater than the amount set
forth opposite such Computation Date.
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
Minimum EBITDA Consolidated
Current Interest Fixed Chg (000's) Senior Debt Parent Debt
Computation Date Ratio Coverage Coverage Leverage Leverage
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
March 31, 2001 1.00 2.00 1.50 $ 2,000 N/A 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
June 30, 2001 1.00 2.00 1.50 $ 2,000 N/A 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
September 30, 2001 1.00 2.00 1.50 $ 2,000 3.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
December 31, 2001 1.00 2.00 1.50 $ 2,000 3.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
March 31, 2002 1.10 2.00 1.50 $ 2,000 2.75 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
June 30, 2002 1.10 2.00 1.50 $ 2,000 2.75 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
September 30, 2002 1.10 2.00 1.50 $ 2,000 2.75 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
December 31, 2002 1.10 2.00 1.50 $ 2,000 2.75 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
March 31, 2003 1.10 2.00 1.20 $ 2,000 2.50 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
June 30, 2003 1.10 2.00 1.20 $ 2,300 2.50 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
September 30, 2003 1.10 2.00 1.20 $ 2,600 2.50 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
December 31, 2003 1.10 2.00 1.20 $ 3,000 2.50 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
March 31, 2004 1.10 2.00 1.20 $ 3,000 2.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
June 30, 2004 1.10 2.00 1.20 $ 3,000 2.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
September 31, 2004 1.10 2.00 1.20 $ 3,000 2.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
December 31, 2004 1.10 2.00 1.20 $ 3,000 2.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
March 31, 2005 1.10 2.00 1.20 $ 3,000 2.25 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
Thereafter 1.10 2.00 1.20 $ 3,500 2.00 2.00
- ------------------------- ---------- ----------- -------------- --------------- ----------------- -----------------
ARTICLE 8
---------
NEGATIVE COVENANTS OF BORROWERS
-------------------------------
Borrowers, jointly and severally, covenant with and warrant to Agent
and each Lender that from and after the Closing Date and until all of the
Obligations are paid and satisfied in full except as otherwise expressly
consented to in writing by the Requisite Lenders:
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Section 8.1 LIMITATION ON NATURE OF BUSINESS. Borrowers and their
Subsidiaries will not at any time make any material change in the nature of
their businesses as carried on at the Effective Date or undertake, conduct or
transact any business in a manner prohibited by applicable law. Borrowers and
their Subsidiaries shall not create, capitalize or acquire any Subsidiary after
the Closing Date. No Inactive Subsidiary shall own or hold any material
properties or assets, conduct any business unrelated to winding up its affairs
or incur any liabilities which have not been disclosed to Agent and Lenders as
required pursuant to this Agreement.
Section 8.2 LIMITATION ON FUNDAMENTAL CHANGES. No Borrower nor any of
its Subsidiaries shall at any time consolidate with or merge into or with any
Person or Persons or enter into or undertake any plan or agreement of
consolidation or merger with any Person, except in connection with a Permitted
Acquisition. No Borrower nor any of its Subsidiaries shall liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of such Borrower's or any of its Subsidiaries'
businesses or properties, whether now or hereafter acquired, except that
Borrowers may cause any Inactive Subsidiary to dissolve and liquidate. No
Borrower nor any of its Subsidiaries shall make or permit any amendment or
modification to its charter documents or by-laws that would adversely affect the
rights of Agent or Lenders under this Agreement or any other Loan Document,
except that Borrowers may cause any Inactive Subsidiary to cancel or terminate
its charter in connection with its dissolution and liquidation.
Section 8.3 RESTRICTED PAYMENTS. Borrowers will not and will not permit
any of their Subsidiaries to directly or indirectly declare, order, pay, make or
set apart any sum for any Restricted Payments, except that:
(a) So long as no Default or Event of Default exists, Parent
may make the scheduled periodic cash dividend payments on the Preferred Stock
issued pursuant to the Preferred Stock Transaction (as the Transaction Documents
therefor are in effect on the Closing Date), but only in strict accordance with
the terms thereof;
(b) Subsidiaries of Borrowers may make Restricted Payments
with respect to their common stock to the extent necessary to permit Borrowers
to pay the Obligations and to make any Restricted Payments permitted under
Section 8.3(a) above and to permit Borrowers to pay expenses incurred in the
ordinary course of business;
(c) Parent may make Restricted Payments in respect of the
Tender Offer as permitted by Section 4.1(aa); and
(d) Parent may repurchase shares of its Capital Stock (or
options or warrants therefor) up to an aggregate maximum amount equal to Two
Hundred Fifty Thousand Dollars ($250,000) in any fiscal year of Parent.
Section 8.4 MANAGEMENT COMPENSATION.
(a) The Credit Parties, either individually or collectively,
shall not pay or enter into an agreement to pay any Management Shareholder
yearly Compensation in an amount
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materially in excess of the Compensation currently paid to the Management
Shareholders and all such Compensation shall be consistent in all material
respects with past practices of Borrowers. As used herein, "COMPENSATION" shall
mean all forms of direct and indirect remuneration and include, without
limitation, salaries, commissions, bonuses, securities, property, insurance
benefits, personal benefits and contingent forms of remuneration.
(b) The Credit Parties, either individually or collectively,
shall not pay or obligate themselves to pay, directly or indirectly, any
management fee or similar compensation to any Person other than a management fee
or overhead allocation between the Parent and any direct or indirect Wholly
Owned Subsidiary.
Section 8.5 LIMITATION ON DISPOSITION OF ASSETS.
(a) No Borrower nor any of its Subsidiaries will sell, lease,
transfer or otherwise dispose of any of its property, business or assets ("ASSET
DISPOSITIONS"), or grant any Person an option to acquire any such property,
business or assets except for (x) bona fide sales of Inventory to customers in
the ordinary course of business and dispositions of obsolete equipment not used
or useful in the business of such Borrower or its Subsidiaries, (y) licenses in
respect of Intellectual Property granted in the ordinary course of business on
customary terms and conditions, and (z) Asset Dispositions which satisfy the
following conditions:
(i) the market value of assets sold or otherwise disposed of
in any single transaction or series of related transactions does not exceed One
Hundred Thousand Dollars ($100,000) and the aggregate market value of assets
sold or otherwise disposed of in any fiscal year does not exceed Five Hundred
Thousand Dollars ($500,000);
(ii) the consideration received is at least equal to the
fair market value of such assets;
(iii) if the consideration received is not solely in cash,
all non-cash consideration is pledged to Agent pursuant to documents
satisfactory to Agent so that Agent has received a first priority perfected
security interest in such non-cash consideration to secure the Obligations;
(iv) the Net Proceeds of such Asset Disposition are applied
as required by Section 2.6(e);
(v) after giving effect to the sale or other disposition of
the assets included within the Asset Disposition and the repayment of
Indebtedness with the proceeds thereof, Borrowers are in compliance on a pro
forma basis with the covenants set forth in Article 7, recomputed for the most
recently ended month for which information is available and are in compliance
with all other terms and conditions contained in this Agreement; and
(vi) no Default or Event of Default shall result from such
sale or other disposition.
(b) Except as permitted elsewhere in this Agreement, no
Borrower will, nor will it permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise
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encumber or dispose of any shares of Capital Stock or other Equity Securities in
such Borrower or any such Subsidiary including warrants, rights or options to
acquire shares or other Equity Securities of any of its Subsidiaries, except to
such Borrower or a Subsidiary.
Section 8.6 LIMITATION ON INVESTMENTS. Borrowers and the Guarantor
Subsidiaries shall not at any time make any Investments of any kind whatever in
any Person or Persons; EXCLUDING, HOWEVER from the operation of the foregoing
provisions of this Section 8.6:
(a) Property to be used in the ordinary course of business of
Borrowers and the Guarantor Subsidiaries;
(b) Assets arising from the sale of goods and services in the
ordinary course of business of Borrowers and the Guarantor Subsidiaries;
(c) Investments in cash and Cash Equivalents;
(d) Investments in interest rate swap, cap, collar and the
other similar reasonable and customary arrangements contemplated by Section
6.16;
(e) Acquisition and holding by a Borrower or any Guarantor
Subsidiary of any receivable from any other Borrower or Guarantor Subsidiary if
such receivable was created or acquired in the ordinary course of business and
is payable or dischargeable in accordance with customary terms;
(f) Advances and loans by a Borrower or any Guarantor
Subsidiary to any other Borrower or Guarantor Subsidiary if such intercompany
advances and loans were made in the ordinary course of business and are payable
or dischargeable in accordance with customary terms; and
(g) Equity contributions by a Borrower or a Guarantor
Subsidiary to any Guarantor Subsidiary so long as all of the Capital Stock of
such Guarantor Subsidiary to which such contribution has been made is pledged to
Agent pursuant to a Pledge Agreement.
Section 8.7 ACQUISITION OF MARGIN SECURITIES. Borrowers and their
Subsidiaries shall not own, purchase or acquire (or enter into any contract to
purchase or acquire) any "margin security" as defined by any regulation of the
Federal Reserve Board as now in effect or as the same may hereafter be in effect
unless, prior to any such purchase or acquisition or entering into any such
contract, Agent and each Lender shall have received an opinion of counsel
satisfactory to Agent and each Lender to the effect that such purchase or
acquisition will not cause this Agreement or the Notes to be in violation of
Regulation G, T, U, X or any other regulation of the Federal Reserve Board then
in effect.
Section 8.8 LIMITATION ON MORTGAGES, LIENS AND ENCUMBRANCES. Borrowers
and their Subsidiaries shall not at any time create, assume, incur or permit to
exist, any mortgage, Lien or other encumbrance in respect of any of its
Property, assets, income or revenues of any character, whether heretofore or
hereafter acquired by it; EXCLUDING, HOWEVER, from the operation of the
foregoing provisions of this Section 8.8 (each a "PERMITTED LIEN"):
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(a) Any Liens for taxes, assessments or governmental charges
or claims the payment of which is not at the time required by Section 6.7 of
this Agreement;
(b) Any statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent;
(c) Any Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security;
(d) Any easements, rights-of-way, encroachments, leases,
royalties, restrictions and other similar title exceptions or encumbrances;
PROVIDED THAT such do not, in the aggregate, materially interfere with the
ordinary conduct of the business of any Borrower or any Subsidiary or materially
reduce or impair the value of the Real Estate so encumbered;
(e) Any interest or title of a lessor in or to any Property
that is leased, possessed, occupied or used by any Borrower under a valid lease
or other instrument contemplated by Section 5.7;
(f) Any Lien granted to Agent for the benefit of Lenders and
the additional existing mortgages, Liens and encumbrances of Borrowers and the
Material Subsidiaries, listed and described, but only to the extent indicated,
on SCHEDULE 8.8(F) annexed to this Agreement;
(g) Any Liens for Indebtedness of any Borrower or any
Subsidiary under or in respect to any conditional sales agreements, security
agreements, equipment leases in the nature of title retention agreements or
security agreements or other similar title retention agreements entered into by
any Borrower or any Subsidiary on, prior to or after the date of this Agreement
in order to secure the payment of the purchase price of any Equipment purchased,
leased or otherwise acquired for use in the ordinary course of its business;
PROVIDED, HOWEVER, that such Borrower or Subsidiary is, by the terms of each of
Sections 8.11 or 8.12 hereof, expressly permitted to enter into such agreement
or lease;
(h) Any Liens arising from or in respect of any judgment,
order or decree not constituting an Event of Default under Section 9.1(i); and
(i) Any Lien on any Equipment purchased in the ordinary course
of business that constitutes a "purchase money security interest", as such term
is now or hereafter defined in the UCC, and that arises out of a Capital Lease
Obligation permitted by Section 8.11(b); PROVIDED THAT in all events, the Liens
permitted by this clause (i) do not encumber any asset or property of Borrowers
or their Subsidiaries not acquired with the proceeds of the Indebtedness secured
by such Liens.
Section 8.9 NO ADDITIONAL NEGATIVE PLEDGES. Borrowers will not create
or otherwise cause or suffer to exist or become effective, directly or
indirectly, (a) any prohibition or restriction (including any agreement to
provide equal or ratable security to any other Person in the event a Lien is
granted to or for the benefit of Agent) on the creation or existence of any Lien
upon the assets of Borrowers and/or their Subsidiaries other than such
prohibitions and
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restrictions as are contained in the Transaction Documents evidencing the
Preferred Stock Transaction as in effect on the Closing Date; or (b) any
contractual obligation which may restrict or inhibit Agent's or Lenders' rights
or ability to sell or otherwise dispose of the Collateral or any part thereof
after the occurrence of an Event of Default.
Section 8.10 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BORROWERS.
Except as provided herein, Borrowers will not and will not permit any of their
Subsidiaries directly or indirectly to create, or otherwise cause or suffer to
exist or become effective, any consensual encumbrance or restriction of any kind
on the ability of any such Subsidiary to: (1) pay dividends or make any other
distribution on any of such Subsidiary's Capital Stock owned by any Borrower or
any other Subsidiary; (2) subject to subordination provisions, pay any
Indebtedness owed by it to any Borrower or any other Subsidiary; (3) make loans
or advances to any Borrower or any other Subsidiary; or (4) transfer any of its
property or assets to any Borrower or any other Subsidiary.
Section 8.11 LIMITATION ON INDEBTEDNESS. Borrowers and their
Subsidiaries shall not at any time create, incur or assume, or become or be
liable (directly or indirectly) in respect of, any Indebtedness, other than,
without duplication ("PERMITTED INDEBTEDNESS"):
(a) Indebtedness arising under this Agreement and the other
Loan Documents;
(b) Indebtedness of Borrowers and their Subsidiaries under
Capitalized Lease Obligations;
(c) Intercompany Indebtedness arising from Investments
permitted by Sections 8.6(e) and 8.6(f); and
(d) the Existing Indebtedness, but only to the extent of
outstanding Indebtedness thereunder on the Effective Date and subject only to
the terms and conditions of the Existing Indebtedness Agreements.
Section 8.12 LIMITATION ON SALES AND LEASEBACKS. Borrowers and their
Subsidiaries shall not at any time, directly or indirectly, sell and thereafter
lease back any of its respective assets or Property. Section 8.13 TRANSACTIONS
WITH AFFILIATES. Borrowers and their Subsidiaries shall not at any time enter
into or participate in any agreements or transactions of any kind with any
Affiliates of Borrowers and their Subsidiaries, except (i) agreements or
transactions that produce annual payments of less than Twenty Thousand Dollars
($20,000) individually or One Hundred Thousand Dollars ($100,000) in the
aggregate; or (ii) agreements or transactions entered into in the ordinary
course of business upon fair and commercially reasonable terms determined by
Agent to be no less favorable to Borrowers and their Subsidiaries than could be
obtained in a comparable arms-length transaction with an unaffiliated Person.
Section 8.14 CHANGES RELATING TO PREFERRED STOCK. Parent will not
change or amend the terms of the Preferred Stock issued pursuant to the
Preferred Stock Transaction, except as expressly contemplated by that certain
Series A Amendment to be executed in connection with the closing of the
Preferred Stock Transaction by and among Parent, Stonehenge Opportunity Fund,
LLC, and Provident.
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Section 8.15 NO ADDITIONAL BANK ACCOUNTS. Except as provided in Section
6.17, Borrowers and their Subsidiaries shall not open, maintain or otherwise
have any bank accounts.
Section 8.16 INACTIVE SUBSIDIARIES. Notwithstanding anything to the
contrary in this Article 8, no Inactive Subsidiary shall be permitted to engage
in any transaction permitted by this Article 8, except as set forth in Section
8.1 or 8.2.
ARTICLE 9
---------
EVENTS OF DEFAULT AND REMEDIES
------------------------------
Section 9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "EVENT OF DEFAULT":
(a) PRINCIPAL AND INTEREST. Any principal, interest or any
other sum payable under this Agreement, any Letter of Credit or the Notes shall
not be paid when due (provided that Borrowers shall be entitled to a period of
grace of three (3) days only in respect of scheduled installments of principal
and interest);
(b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty at any time made by or on behalf of any Credit Party in this Agreement,
any Loan Document or in any certificate, written report or statement furnished
to Agent or any Lender pursuant hereto or thereto shall prove to have been
untrue, incorrect or breached in any material respect on or as of the date on
which such representation or warranty was made or deemed to have been made or
repeated;
(c) CERTAIN COVENANTS. Borrowers shall fail to comply with the
covenants set forth in Section 6.2(b), Section 6.5, Article 7 or Article 8;
PROVIDED THAT in the event of any failure of compliance with Section 7.5 or
Article 8 which does not affect to a material extent the business or financial
condition of any Borrower or Subsidiary or Agent's and Lenders' rights in the
Collateral and which can be remedied by corrective action of Borrowers or their
Subsidiaries as determined by Agent in its sole (but not arbitrary and
capricious) discretion, Borrowers shall have a period of fifteen (15) days to
correct or cure such failure;
(d) OTHER COVENANTS. Any Borrower shall fail to perform,
comply with or observe or shall otherwise breach any other covenant or agreement
contained in this Agreement and such failure or breach shall continue for more
than thirty (30) days after the earlier of the date on which any Borrower shall
have first become aware of such failure or breach or Agent or any Lender shall
have first notified any Borrower of such failure or breach;
(e) LOAN DOCUMENTS. The breach or a failure of any Credit
Party to perform, comply with or observe any Loan Document or any other
agreement, document, instrument or certificate executed or delivered in
connection with this Agreement and if such failure shall continue for more than
thirty (30) days after the earlier of the date on which any Credit Party shall
have first become aware of such failure or breach or Agent or any Lender shall
have first notified Borrowers of such failure or breach, or any Loan Document
shall cease to be legal, valid, binding or enforceable in accordance with the
terms thereof;
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(f) LITIGATION. Any action at law, suit in equity or other
legal proceeding to amend, cancel, revoke or rescind any Loan Document shall be
commenced by or on behalf of any Credit Party or any other Person bound thereby,
or by any court or any other governmental or regulatory authority or agency of
competent jurisdiction; or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or shall issue a judgment, order, decree or ruling to the effect that, any one
or more of the covenants, agreements or obligations of any Credit Party under
any one or more of the Loan Documents are illegal, invalid or unenforceable in
accordance with the terms thereof;
(g) DEFAULT UNDER OTHER AGREEMENTS. Any default by any Credit
Party or any event of default shall occur under any agreement, instrument or
contract relating to Indebtedness individually or in the aggregate in excess of
One Hundred Thousand Dollars ($100,000) to which any Credit Party is at any time
a party or by which any Credit Party is at any time bound or affected, or any
Credit Party shall fail to perform or observe any of its agreements or covenants
thereunder, and such default, event of default or failure shall continue for
such period of time as would permit, or as would have permitted (assuming the
giving of appropriate notice), holders of Indebtedness of any Credit Party to
accelerate the maturity of all or any part of such Indebtedness under any such
document;
(h) INSOLVENCY. Any action shall be taken by or on behalf of
any Credit Party for the termination, winding up, liquidation or dissolution of
any Credit Party; or any Credit Party shall make an assignment for the benefit
of creditors, become insolvent or be unable to pay its debts as they mature; or
any Credit Party shall file a petition in voluntary liquidation or bankruptcy;
or any Credit Party shall file a petition or answer or consent seeking the
reorganization of any Credit Party, or the readjustment of any of the
Indebtedness of any Credit Party; or any Credit Party shall commence any case or
proceeding under applicable insolvency or bankruptcy laws now or hereafter
existing; or any Credit Party shall consent to the appointment of any receiver,
administrator, custodian, liquidator or trustee of all or any part of the
Property or assets of any Credit Party; or any corporate action shall be taken
by any Credit Party for the purpose of effecting any of the foregoing; or by
order or decree of any court of competent jurisdiction, any Credit Party shall
be adjudicated as bankrupt or insolvent; or any petition for any proceedings in
bankruptcy or liquidation or for the reorganization or readjustment of
Indebtedness of any Credit Party shall be filed, or any case or proceeding shall
be commenced, under any applicable bankruptcy or insolvency laws now or
hereafter existing, against any Credit Party, or any receiver, administrator,
custodian, liquidator or trustee shall be appointed for any Credit Party or for
all or any part of the Property of Credit Party and such case or proceeding
shall remain undismissed for a period of sixty (60) days, or any order for
relief shall be entered in a proceeding with respect to any Credit Party under
the provisions of the United States Bankruptcy Code, as amended;
(i) JUDGMENT. Any judgment, order or decree for the payment of
money arising from any claim under any workers compensation statute, after
giving effect to co-insurance permitted by this Agreement and all applicable
insurance therefor in excess of Two Hundred Fifty Thousand Dollars ($250,000),
or any other judgment, order or decree for the payment of money in excess of
Fifty Thousand Dollars ($50,000), shall be rendered against any Credit Party,
and such Credit Party shall not discharge the same or provide for its discharge
in accordance with its terms or, reserve for it in
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accordance with GAAS, or procure a stay of execution thereof, within thirty (30)
days after the date of the entry thereof;
(j) ERISA. Any Termination Event shall occur with respect to
any Plan and as of the date thereof or any subsequent date, the sum of the
various liabilities of any Borrower and its ERISA Affiliates (such liabilities
to include, without limitation, any liability to the Pension Benefit Guaranty
Corporation (or any successor thereto) or to any other party under Sections
4062, 4063, or 4064 of ERISA or any other provision of law and to be calculated
after giving effect to the tax consequences thereof and insurance coverage
therefor, if any) resulting from or otherwise associated with such event
exceeds, together with all liabilities arising from other such Termination
Events, an aggregate of Two Hundred Fifty Thousand Dollars ($250,000) in any
period of twelve (12) months; or any Borrower or any of its ERISA Affiliates as
an employer under any Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plans and the plan sponsors of such
Multiemployer Plans shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability (after giving effect to any
insurance coverages therefor) requiring a payment which, together with all other
payments from such withdrawals, exceeds an aggregate amount of Two Hundred Fifty
Thousand Dollars ($250,000) in any period of twelve (12) months;
(k) CHANGE OF CONTROL. Any Change of Control shall occur;
and/or
(l) MATERIAL ADVERSE CHANGE. Any event or occurrence which has
a Material Adverse Effect shall occur.
Section 9.2 TERMINATION OF COMMITMENTS AND ACCELERATION OF OBLIGATIONS.
If any one or more of the Events of Default shall at any time occur:
(a) Agent may, and upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers, immediately terminate the Commitments and
obligations to issue Letters of Credit of all of Lenders in full and each Lender
shall thereupon be relieved of all of its obligations to make any Loans and
issue Letters of Credit thereunder; except that if there shall be an Event of
Default under Section 9.1(h) hereof, the Commitments and obligations to issue
Letters of Credit of all of Lenders shall automatically terminate in full, and
each Lender shall thereupon be relieved of all of its obligations to make any
Loans and issue Letters of Credit hereunder.
(b) Agent may, and upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers (in this Agreement and in the other Loan
Documents called a "NOTICE OF ACCELERATION"), declare all of the Obligations,
including the entire unpaid principal of the Notes, all of the unpaid interest
accrued thereon, and all other sums (if any) payable by Borrowers under this
Agreement, the Notes, the Letters of Credit or any of the other Loan Documents,
to be immediately due and payable; except that if there shall be an Event of
Default under Section 9.1(h), all of the Obligations, including the entire
unpaid balance of all of the Notes, all of the unpaid interest accrued thereon
and all other sums (if any) payable by Borrowers under this Agreement, the
Notes, the Letters of Credit or any of the other Loan Documents shall
automatically and immediately be due and payable without notice to Borrowers.
Thereupon, all of such Obligations which are not already due and payable shall
forthwith become and be
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absolutely and unconditionally due and payable, without any further notice or
any other formalities of any kind, all of which are hereby expressly and
irrevocably waived.
Section 9.3 REMEDIES. From and after the occurrence of an Event of
Default which is continuing and which has not been waived by Agent at the
direction of the Requisite Lenders, Agent may, and upon the request of the
Requisite Lenders, shall:
(a) subject always to the provisions of Section 10.9 hereof,
proceed to protect and enforce all or any of its or Lenders' rights, remedies,
powers and privileges under this Agreement, any Note, any Letter of Credit or
any of the other Loan Documents by action at law, suit in equity or other
appropriate proceedings, whether for specific performance of any covenant
contained in this Agreement, any Note, any Letter of Credit or any of the other
Loan Documents, or in aid of the exercise of any power granted to Agent herein
or therein. In the event Agent shall fail or refuse to so proceed, the Requisite
Lenders shall be entitled to take such action as they shall deem appropriate to
enforce their rights hereunder and under the other Loan Documents;
(b) remove from any premises where same may be located any and
all Inventory or any and all documents, instruments, files and records
(including the copying of any computer records), and any receptacles or cabinets
containing same, relating to the Accounts of Borrowers, or Agent may use (at the
expense of Borrowers) such of the supplies or space of Borrowers, at Borrowers'
and their Subsidiaries' places of business or otherwise, as may be necessary to
properly administer and control the Accounts of Borrowers and their Subsidiaries
or the handling of collections and realizations thereon;
(c) bring suit, in the name of Borrowers and their
Subsidiaries or Lenders, and generally shall have all other rights respecting
said Accounts, including without limitation the right to accelerate or extend
the time of payment, settle, compromise, release in whole or in part any amounts
owing on any such Accounts and issue credits in the name of Borrowers and their
Subsidiaries or Lenders;
(d) sell, assign and deliver such Inventory and Accounts and
any returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise, at
Agent's sole discretion, and any Lender may bid or become a purchaser at any
such sale, free from any right of redemption, which right is hereby expressly
waived by Borrowers;
(e) (i) notify the Account Debtor on any Account or Chattel
Paper of Lenders' security interest therein; (ii) demand that monies due or to
become due be paid directly to Agent for the account of Lenders; (iii) open
Borrowers' and their Subsidiaries' mail and collect any and all amounts due
Borrowers and their Subsidiaries from Account Debtors; (iv) enforce payment of
the Accounts or Chattel Paper by legal proceedings or otherwise; (v) exercise
all of Borrowers' and their Subsidiaries' rights and remedies with respect to
the collection of the Accounts or Chattel Paper; (vi) settle, adjust,
compromise, modify, extend or renew the Accounts or Chattel Paper; (vii) settle,
adjust or compromise any legal proceedings brought to collect the Accounts or
Chattel Paper; (viii) to the extent permitted by applicable law, sell or assign
the Accounts or Chattel Paper upon such terms, for such amounts and at such time
or times as Agent deems advisable; (ix) grant waivers or indulgences with
respect to, accept partial payments from,
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discharge, release, surrender, substitute any customer security for, make
compromise with or release, any other party liable on, any Account or Chattel
Paper; (x) take control, in any manner, of any item of payment or proceeds from
any Account Debtor; (xi) prepare, file, and sign Borrowers' and their
Subsidiaries' names on any proof of claim under the Bankruptcy Code or similar
document against any Account Debtor; (xii) prepare, file, and sign Borrowers'
and their Subsidiaries names on any notice of lien, assignment or satisfaction
of lien or similar document in connection with the Accounts or Chattel Paper;
(xiii) endorse the name of Borrowers and their Subsidiaries upon any Chattel
Paper, document, instrument, invoice, freight bill, bill of lading or similar
document or agreement relating to the Accounts or Chattel Paper or Inventory;
(xiv) use Borrowers' and their Subsidiaries' stationery and sign Borrowers' and
their Subsidiaries names to verifications of the Accounts or Chattel Paper and
notices thereof to Account Debtors; and (xv) use the information recorded on or
contained in any data processing Equipment or computer hardware or software
relating to the Accounts, Chattel Paper, Inventory, or Proceeds thereof to which
Borrowers and their Subsidiaries have access; and
(f) foreclose the security interests created pursuant to the
Loan Documents by any available judicial procedure, or take possession of any or
all of the Inventory and Equipment of Borrowers without judicial process and
enter any premises where any such Inventory and Equipment may be located for the
purpose of taking possession of or removing the same.
Agent shall have the right, without notice of advertisement, to sell,
lease, or otherwise dispose of all or any part of the Inventory and Equipment of
Borrowers and their Subsidiaries, whether in its then condition or after further
preparation or processing, in the name of Borrowers and their Subsidiaries, or
Lenders, or in the name of such other party as Agent may designate, either at
public or private sale or at any broker's board, in lots or in bulk, for cash or
for credit, with or without warranties or representations, and upon such other
terms and conditions as Agent in its sole discretion may deem advisable, and
Agent or any other Lender shall have the right to purchase at any such sale. If
any such Inventory and Equipment shall require rebuilding, repairing,
maintenance or preparation, Agent shall have the right, at its option, to do
such of the aforesaid as is necessary, for the purpose of putting such Inventory
and Equipment in such saleable form as Agent shall deem appropriate. Borrowers
and their Subsidiaries agree, at the request of Agent, to assemble such
Inventory and Equipment and to make it available to Agent at places which Agent
shall reasonably select, whether at the premises of Borrowers and their
Subsidiaries or elsewhere, and to make available to Agent the premises and
facilities of Borrowers and their Subsidiaries for the purpose of Agent's taking
possession of, removing or putting such Inventory and Equipment in saleable
form. However, if notice of intended disposition of any Collateral is required
by law, it is agreed that five (5) Business Days notice shall constitute
reasonable notification and full compliance with the law. Agent shall be
entitled to use all intangibles and computer software programs and data bases
used by Borrowers and their Subsidiaries in connection with its business or in
connection with the Collateral. The net cash proceeds resulting from Agent's
exercise of any of the foregoing rights (after deducting all charges, costs and
expenses including reasonable attorneys' fees) shall be applied by Agent to the
payment of the Obligations, whether due or to become due, in such order as Agent
may elect. Borrowers and their Subsidiaries shall remain liable to Lenders for
any deficiencies, and Lenders in turn agree to remit to Borrowers and their
Subsidiaries or their respective successors or assigns, any surplus resulting
therefrom. The enumeration of the foregoing rights is not intended
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to be exhaustive and the exercise of any right shall not preclude the exercise
of any other rights at law or in equity, all of which shall be cumulative.
Section 9.4 NO IMPLIED WAIVER; RIGHTS CUMULATIVE. No delay on the part
of Agent or any Lender in exercising any right, remedy, power or privilege under
any of the Loan Documents or provided by statute or at law or in equity or
otherwise shall impair, prejudice or constitute a waiver of any such right,
remedy, power or privilege or be construed as a waiver of any Default or Event
of Default or as an acquiescence therein. No right, remedy, power or privilege
conferred on or reserved to Agent or any Lender under any of the Loan Documents
or otherwise is intended to be exclusive of any other right, remedy, power or
privilege. Each and every right, remedy, power and privilege conferred on or
reserved to Agent or any Lender under any of the Loan Documents or otherwise
shall be cumulative and in addition to each and every other right, remedy, power
or privilege so conferred on or reserved to Agent or any such Lender and may be
exercised at such time or times and in such order and manner as Agent or any
such Lender shall (in its sole and complete discretion) deem expedient.
Section 9.5 SET-OFF; PRO RATA SHARING. If any principal, interest or
other sum payable by Borrowers to Agent or any Lender under the Notes or any of
the Loan Documents is not paid to Agent or such Lender punctually when the same
shall first become due and payable (after giving effect to all applicable
periods of grace, if any), or if any Event of Default shall at any time occur,
any deposits, balances or other sums credited by or due from Agent or such
Lender or any of the offices or branches of Agent or any Lender to Borrowers
and/or their Subsidiaries, may, without any prior notice of any kind to
Borrowers and their Subsidiaries, or compliance with any other conditions
precedent now or hereafter imposed by statute, rule or law or otherwise (all of
which are hereby expressly and irrevocably waived by Borrowers), be immediately
set off, appropriated and applied by Agent or such Lender toward the payment and
satisfaction of the Obligations (but not to any other obligations of Borrowers
and/or their Subsidiaries to Agent or such Lender until all of the Obligations
have been paid in full) in such order and manner as Agent or such Lender (in its
sole and complete discretion) may determine, subject, however, to the provisions
of Section 10.13.
ARTICLE 10
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CONCERNING THE AGENT AND THE LENDERS
------------------------------------
Agent and Lenders agree as follows:
Section 10.1 APPOINTMENT OF AGENT. Each of Lenders hereby appoints
Provident to serve as Agent, under this Agreement and the other Loan Documents,
and in such capacity, to administer this Agreement, and the other Loan
Documents.
Section 10.2 AUTHORITY. Each of Lenders hereby irrevocably authorizes
Agent (i) to take such action on such Lender's behalf under this Agreement and
the other Loan Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are delegated to or required of Agent by the terms
hereof or thereof, together with such powers as are reasonably incidental
thereto; and (ii) to take such action on such Lender's behalf as Agent
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shall consider necessary or advisable for the protection, collection or
enforcement of any of the Obligations. Agent will promptly notify each of
Lenders as soon as it becomes aware of any Default or Event of Default or any
failure by Borrowers to make any payment in respect of any of the Notes,
PROVIDED, HOWEVER, that Agent shall not be deemed to have knowledge of any item
until such time as Agent's officers responsible for administration of the Loans
shall receive written notice thereof or have actual knowledge of such event. If
any Lender becomes aware of any Default or Event of Default by Borrowers, it
shall promptly notify Agent thereof PROVIDED, HOWEVER, that Lenders shall not be
deemed to have knowledge of any item until such time as Lenders' officers
responsible for administration of the Loans and Letters of Credit shall receive
written notice thereof or have actual knowledge of such event.
Section 10.3 ACCEPTANCE OF APPOINTMENT. Agent hereby accepts its
appointment as Agent for each of Lenders under this Agreement and the other Loan
Documents, but only on the terms set forth in this Agreement, including the
following:
(a) Agent makes no representation as to the value, validity or
enforceability of this Agreement or of any of the other Loan Documents or as to
the correctness of any statement contained in this Agreement or in any of the
other Loan Documents;
(b) Agent may exercise its powers and perform its duties under
this Agreement and the other Loan Documents either directly or through its
agents or attorneys;
(c) Agent shall be entitled to obtain from counsel selected by
it with reasonable care advice with respect to legal matters pertaining to this
Agreement, or any of the other Loan Documents and shall not be liable for any
action taken, omitted to be taken or suffered in good faith in accordance with
the advice of such counsel;
(d) Agent shall not be required to use its own funds in the
performance of any of its duties or in the exercise of any of its rights or
powers, and Agent shall not be obligated to take any action which, in its
reasonable judgment, would involve it in any expense or liability unless it
shall have been furnished security or indemnity in an amount and in form and
substance satisfactory to it; and
(e) Agent, in performing its duties and functions under this
Agreement and the other Loan Documents on behalf of Lenders, will exercise the
same care which it normally exercises in making and handling loans in which it
alone is interested, but does not assume further responsibility.
Section 10.4 COLLATERAL MATTERS.
(a) RELEASE OF COLLATERAL. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion upon approval of the
Requisite Lenders, to release any Lien granted to or held by Agent upon any
property covered by the Security Documents (i) upon termination of the Credit
Commitments and payment and satisfaction of all Obligations; or (ii)
constituting property being sold or disposed of if Borrowers certify to Agent
that the sale or disposition is made in compliance with the provisions of this
Agreement (and Agent may rely in good faith conclusively on any such
certificate, without further inquiry); or (iii) constituting property leased to
Borrowers under a lease which has expired or been terminated in a transaction
permitted under
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this Agreement or is about to expire and which has not been, and
is not intended by Borrowers to be, renewed or extended. Upon request by Agent
at any time, any Lender will confirm in writing its approval of Agent's
authority to release particular types or items of property covered by the
Security Documents pursuant to this Section 10.4(a).
(b) CONFIRMATION OF AUTHORITY; EXECUTION OF RELEASES. Without
in any manner limiting Agent's authority to act without any specific or further
authorization or consent by Requisite Lenders (as set forth in Section 10.4(a)),
each Lender agrees to confirm in writing, upon request by Borrowers, the
authority to release any property covered by the Security Documents conferred
upon Agent under clauses (i) through (iii) of Section 10.4(a). So long as no
Event of Default is then continuing, upon receipt by Agent of confirmation from
the Requisite Lenders of its authority to release any particular item or types
of property covered by the Security Documents, and upon at least five (5)
Business Days prior written request by Borrowers, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as may be necessary
to evidence the release of the Liens granted to Agent for the benefit of Lenders
herein or pursuant hereto upon such Collateral; provided, HOWEVER, that (i)
Agent shall not be required to execute any such document on terms which, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of Borrowers, in
respect of), all interests retained by Borrowers, including (without limitation)
the proceeds of any sale, all of which shall continue to constitute part of the
property covered by the Security Documents.
(c) ABSENCE OF DUTY. Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by the
Security Documents exists or is owned by Borrowers or is cared for, protected or
insured or has been encumbered or that the Liens granted to Agent herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent in this Section 10.4 or in
any of the Loan Documents, it being understood and agreed that in respect of the
property covered by the Security Documents or any act, omission or event related
thereto, Agent may act in any manner it may deem appropriate, it its discretion,
given Agent's own interest in property covered by the Security Documents as one
of Lenders and that Agent shall have no duty or liability whatsoever to any of
the other Lenders; PROVIDED THAT Agent shall exercise the same care which it
would in dealing with loans for its own account.
Section 10.5 AGENCY FOR PERFECTION. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Lenders' security interest
in assets which, in accordance with Article 9 of the Uniform Commercial Code in
any applicable jurisdiction, can be perfected only by possession. Should any
Lender (other than Agent) obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent's request therefor, shall
deliver such Collateral to Agent or in accordance with Agent's instructions.
Each Lender agrees that it will not have any right individually to enforce or
seek to enforce any Security Document or to realize upon any collateral security
for the Loans, it being understood and agreed that such rights and remedies may
be exercised only by Agent.
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Section 10.6 APPLICATION OF MONEYS. All moneys realized by Agent under
the Loan Documents shall be held by Agent to apply in accordance with Section
2.7(b) hereof, unless expressly provided to the contrary herein.
Section 10.7 RELIANCE BY AGENT. Agent shall be entitled to rely on any
notice, consent, certificate, affidavit, letter, telegram, telecopy, facsimile
or teletype message, statement, order, instrument or other document believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Agent shall deem and treat the payee of any Note as the
absolute owner thereof for all purposes hereof until such time as it receives
actual notice of an assignment permitted hereunder of such payee's interest,
together with the written agreement of the assignee in form and substance
satisfactory to Agent that such assignee is bound by this Agreement as a
"Lender" hereunder.
Section 10.8 EXCULPATORY PROVISIONS. Neither Agent nor any of its
shareholders, directors, officers, employees or agents shall be liable in any
manner to any of Lenders for any action taken, omitted to be taken or suffered
in good faith by it or them under any of the Loan Documents or in connection
therewith, or be responsible for the consequences of any oversight or error of
judgment, except for losses due to gross negligence or willful misconduct of
such Agent, shareholder, director, officer, employee or agent. Without limiting
the generality of the foregoing sentence of this Section 10.8, under no
circumstances shall Agent be subject to any liability to any Lender on account
of any action taken or omitted to be taken by such Agent in compliance with the
direction of the Requisite Lenders or all of Lenders, as the case may be as
provided for hereunder.
Agent shall not be responsible in any manner to any of Lenders for the
due execution, effectiveness, genuineness, validity or enforceability,
perfection or recording of this Agreement, any of the Notes, any of the other
Loan Documents or for any certificate, report or other document used under or in
connection with this Agreement or any of the other Loan Documents, or for the
truth or accuracy of any recitals, statements, warranties or representations
contained herein or in any certificate, report or other document at any time
hereafter furnished or purporting to have been furnished to it by or on behalf
of Borrowers, or any other Person, or be under any obligation to any of Lenders
to ascertain or inquire as to the performance or observance by Borrowers, or any
other Person of any of the covenants, agreements or conditions set forth in this
Agreement, the Notes or any of the other Loan Documents or as to the use of any
moneys lent hereunder or thereunder.
Agent shall not be obligated to take any action or refrain from taking
any action under any Loan Document that might, in its judgment, involve it in
any expense or liability until it shall have been indemnified to its
satisfaction by or received an agreement to indemnify from each Person which
such Agent reasonably believes may be an intended recipient of such
distribution. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to Agent its proportionate
share of the amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
Section 10.9 ACTION BY AGENT. Except as otherwise expressly provided
under this Agreement or in any other of the Loan Documents, Agent will take such
action, assert
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such rights and pursue such remedies under this Agreement and the other Loan
Documents as the Requisite Lenders or all of Lenders, as the case may be as
provided for hereunder shall direct. Except as otherwise expressly provided in
any of the Loan Documents, Agent will not (and will not be obligated to) take
any action, assert any rights or pursue any remedies under this Agreement or any
of the other Loan Documents in violation or contravention of any express
direction or instruction of the Requisite Lenders or all of Lenders, as the case
may be as provided for hereunder. Agent may refuse (and will not be obligated)
to take any action, assert any rights or pursue any remedies under this
Agreement or any of the other Loan Documents without the express written
direction and instruction of the Requisite Lenders or all of Lenders, as the
case may be as provided for hereunder. In the event Agent fails, within a
commercially reasonable time, to take such action, assert such rights, or pursue
such remedies as the Requisite Lenders or all of Lenders, as the case may be as
provided for hereunder, direct, the Requisite Lenders or all of Lenders, as the
case may be as provided for hereunder, shall have the right to take such action,
to assert such rights, or pursue such remedies on behalf of all of Lenders
unless the terms hereof otherwise require the consent of all Lenders to the
taking of such actions. All notices and other material information required to
be delivered by Borrowers to Agent hereunder shall be delivered within a
reasonable time (and in any event not more than five (5) days) after Agent's
receipt of same by Agent to each Lender. No Lender (other than Agent, acting in
its capacity as Agent) shall be entitled to take any enforcement action of any
kind under any of the Loan Documents, except as expressly provided in this
Agreement. Action that may be taken by Requisite Lenders or all of Lenders, as
the case may be as provided for hereunder may be taken pursuant to a vote at a
meeting (which may be held by telephone conference call) of all of Lenders, or
pursuant to the written consent of such Lenders.
Section 10.10 AMENDMENTS, WAIVERS AND CONSENTS. Any provision of this
Agreement, the Notes or the other Loan Documents may be amended or waived upon
the consent of the Requisite Lenders, and after such consent, Agent, on behalf
of Lenders, may execute and deliver to Borrowers a written instrument waiving or
amending such provision; PROVIDED, HOWEVER, that neither this Agreement, the
Notes, nor any of the other Loan Documents may be amended, waived or a variation
therefrom or forbearance with respect to such variation consented to without the
written consent of Agent and all of Lenders which effect (i) a change in any
Lender's Credit Commitment; (ii) a reduction in the interest rates or reduction
of the principal set forth in the Notes; (iii) the extension of the maturity
date on the Notes; (iv) a change in the payment schedule or scheduled date for
the payment of or amount of any interest or principal; (v) any change in Article
7; (vi) a change in this Section 10.10, the definition of Requisite Lender or
any provision of this Agreement which requires consent or action of all Lenders
for action thereunder; (vii) a change in the obligations and liabilities of
Agent; (viii) a change which increases the obligations of any Lender; or (ix) a
change in any fees or charges hereunder or in Sections 2.10 or 11.6 hereof.
Section 10.11 INDEMNIFICATION. Each Lender agrees to indemnify Agent
(to the extent Agent is not promptly reimbursed by Borrowers), in accordance
with its Participation Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, interests, actions, judgments and suits
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent relating to or arising out of this Agreement or any of
the other Loan Documents or relating to any action taken or omitted by such
Agent under this Agreement or any of the other Loan Documents, PROVIDED THAT no
Lender shall be liable for any portion of such
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liabilities, obligations, losses, damages, penalties, interest, actions,
judgments or suits resulting from Agent's own gross negligence or willful
misconduct.
Section 10.12 REIMBURSEMENT OF AGENT. Each Lender further agrees to
reimburse Agent, in accordance with its Participation Percentage, for any
reasonable out-of-pocket costs or expenses incurred by Agent in connection with
its duties under this Agreement (including, but not limited to, reasonable fees
and disbursements of counsel, travel and living expenses away from home of
employees or agents of Agent and compensation of agents or of experts employed
by Agent to render services for Lenders hereunder), but only to the extent such
fees, disbursements, expenses and compensation have not been promptly reimbursed
to Agent by Borrowers. If any such sums are reimbursed to Agent by Borrowers
after one or more of Lenders have reimbursed Agent for such sums, Agent will
refund such sums ratably to Lenders who contributed such sums.
Section 10.13 SHARING OF FUNDS RECEIVED. Each Lender and Agent agrees
with Agent and each of the other Lenders that if such Lender shall receive from
Borrowers or any other Person or Persons, whether by payment received otherwise
than in accordance with the terms of the Loan Documents, exercise of the right
of set-off, counterclaim, cross-claim, enforcement of any claim, or proceedings
against Borrowers or any other Person or Persons, proof of claim in bankruptcy,
reorganization, liquidation, receivership or other similar proceedings, or
otherwise, and shall retain and apply to the payment of any of the Obligations
owing to such Lender any amount in excess of its Pro Rata Share of the payments
received by all of Lenders and Agent in respect of all of the Obligations, such
Lender will promptly make such dispositions and arrangements with the other
Lenders and Agent with respect to such excess, either by way of distribution,
pro tanto assignment of claim, subrogation or otherwise, as shall result in each
of Lenders receiving in respect of the Obligations owing to it, its Pro Rata
Share of such payments.
Section 10.14 DEALING WITH LENDERS. Agent may at all times deal solely
with the several Lenders for all purposes of this Agreement and the protection,
enforcement and collection of the Notes, including without limitation the
acceptance and reliance upon any certificate, consent or other document executed
on behalf of one or more of Lenders and the division of payments pursuant to
Sections 2.5, 2.6, 2.7, 10.6, 10.13 and 11.3 hereof. Agent shall not have a
fiduciary relationship in respect of any Lender by reason of this Agreement.
Agent shall have no implied duties to Lenders, or any obligation to Lenders to
take any action hereunder except any action specifically provided by this
Agreement to be taken by Agent.
Section 10.15 AGENT AS LENDER. Provident shall have, in its capacity as
a Lender under the Loan Documents, the same obligations and the same rights,
remedies, powers and privileges under this Agreement and the other Loan
Documents as it would have were it not also an Agent.
Section 10.16 DUTIES NOT TO BE INCREASED. The duties and liabilities of
Agent under this Agreement and the other Loan Documents shall not be increased
or otherwise changed without its express prior written consent. Agent shall have
no duty to provide information to Lenders except as expressly set forth herein.
Section 10.17 LENDER CREDIT DECISIONS. Each Lender acknowledges that it
has, independently of and without reliance upon Agent or any of the other
Lenders, made its own
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credit analysis and decision to enter into this Agreement and the other Loan
Documents to which it is a party. Each Lender also acknowledges that it will,
independently of and without reliance upon Agent or any of the other Lenders,
continue to make its own credit decisions in taking or not taking action under
this Agreement or any of the other Loan Documents and in determining the
compliance or lack thereof by Borrowers and any other Person with any provision
of any Loan Document or other document or agreement.
Section 10.18 RESIGNATION OF AGENT. Provident and any successor Agent
may resign as such at any time by giving thirty (30) days' prior written notice
of resignation to each Lender and Borrowers, such resignation to be effective on
the date which is specified in such notice. Upon any such resignation by
Provident as Agent, or in the event the office of Agent shall thereafter become
vacant for any other reason, the Requisite Lenders shall appoint a successor
Agent, by an instrument in writing signed by such Lenders and delivered to such
successor Agent and Borrowers whereupon, such successor Agent shall succeed to
all of the rights and obligations of the retiring Agent as if originally named.
The retiring Agent shall duly assign, transfer and deliver to such successor
Agent all moneys at the time held by the retiring Agent hereunder after
deducting therefrom its expenses for which it is entitled to be reimbursed. Upon
such succession of any such successor Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder, except for its gross
negligence or willful misconduct arising prior to its retirement or removal
hereunder. After any Agent's resignation, the provisions of this Article 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
Section 10.19 ASSIGNMENT OF NOTES; PARTICIPATION.
(a) Each Lender may, at its own cost and with concurrent
notice to Agent, assign all or a portion of its rights and obligations under
this Credit Agreement and the Notes to another financial institution reasonably
acceptable to Agent and Parent, provided that Parent shall not unreasonably
withhold, condition or delay such acceptance; PROVIDED THAT (i) for each such
assignment, the parties thereto shall execute and deliver an assignment and
assumption agreement, in form and substance acceptable to Agent, together with
any Notes subject to such assignment, (ii) no such assignment shall reduce the
assigning Lender's Credit Commitment to less than fifty-one percent (51%) of
such Lender's original Commitment without the consent of Agent, and (iii) no
such assignment shall be for less than Five Million Dollars ($5,000,000) of the
aggregate of the Lender's Credit Commitment, unless such assignment is to a
then-current holder of a Note. Upon such execution and delivery of such
assignment and assumption agreement to Agent substantially in the form of
EXHIBIT O hereto, from and after the date specified as the effective date in
such Agreement (the "ACCEPTANCE DATE"), (x) the assignee thereunder shall be a
party hereto, and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such agreement, such assignee shall have the rights
and obligations of a Lender hereunder and (y) the assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such agreement, relinquish its rights (other than any rights it may
have pursuant to Section 12.6 which will survive) and be released from its
obligations under this Agreement (and, in the case of an assignment covering all
or the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto). Any Lender which
assigns any or all of its Commitment or Loans to a Person other than an
Affiliate of such Lender shall pay to Agent a
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service fee in the amount of Three Thousand Five Hundred Dollars ($3,500) for
each assignment.
(b) Each Lender may sell participations of up to forty-nine
percent (49%) of its rights and obligations under the Loan Documents (including,
without limitation, up to such portion of its Commitment, the Loans owing to it,
and the Note held by it); PROVIDED, HOWEVER, that (i) such Lenders' obligations
under the Loan Documents (including, without limitation, its Commitment to
Borrowers hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of the Loan Documents, (iv) the participating banks or other entities
shall be entitled to the cost protection provisions of Sections 2.10 and 12.6
hereof, but a participant shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount to which the Lender
granting such participation would have been entitled, (v) Borrowers, Agent and
the other Lenders shall continue to deal solely and directly with such selling
Lender in connection with such Lender's rights and obligations under the Loan
Documents, and (vi) no such transfer shall include the transfer of any of such
Lender's rights to grant consents or approve amendments or modifications to the
Loan Documents except with respect to those items requiring the action of or
consent by all of Lenders or affecting the rights and obligations of Agent. It
is understood and agreed that each Lender may share any and all information
received by it from or on behalf of Borrowers pursuant to this Agreement or any
of the other Loan Documents with any participant or prospective participant of
such Lender.
ARTICLE 11
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LETTERS OF CREDIT
-----------------
Section 11.1 LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions set forth in
this Article 11, any Borrower may request Lenders, at any time and from time to
time on or after the Closing Date until the date that is fifteen (15) Business
Days prior to the Maturity Date, to issue for the account of such Borrower or
any of its Subsidiaries (the party for whose account such Letter of Credit is
requested, a "LETTER OF CREDIT OBLIGOR") an irrevocable standby letter of credit
denominated and payable in U.S. Dollars in such form as may be approved by such
Letter of Credit Issuer and the Agent (each such letter of credit, a "LETTER OF
CREDIT" and collectively, the "LETTERS OF CREDIT"), solely for the purpose of
supporting (i) standby obligations of such Letter of Credit Obligor in respect
of a Permitted Acquisition that is acceptable to the Letter of Credit Issuer in
its sole and absolute discretion, (ii) policies of insurance for workers'
compensation risks as required in the ordinary course of business of such Letter
of Credit Obligor, and (iii) other obligations of such Letter of Credit Obligor
incurred in the ordinary course of its business.
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued if the Stated Amount of which, when added to the Letter of
Credit Outstandings at such time, would exceed either (x) Two Million Dollars
($2,000,000) or (y) when added to the aggregate principal amount of all Loans
then outstanding, an amount equal to the Acquisition Commitment
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Availability at such time; (ii) no individual Letter of Credit shall be issued
which has an initial Stated Amount less than Fifty Thousand Dollars ($50,000)
unless such lesser Stated Amount is acceptable to the Letter of Credit Issuer;
and (iii) each Letter of Credit shall have an expiry date (including any renewal
periods) occurring not later than the earlier of (A) one year from the date of
issuance thereof, unless a longer period is approved by the relevant Letter of
Credit Issuer, and (B) fifteen (15) Business Days prior to the Maturity Date, in
each case on terms acceptable to Agent and the relevant Letter of Credit Issuer.
In addition, no Letter of Credit shall be issued or increased in amount if,
after giving effect thereto, Borrowers would be required to prepay Loans in
accordance with Section 2.6(d).
(c) Notwithstanding the foregoing, in the event a Lender
Default exists, no Letter of Credit Issuer shall be required to issue any Letter
of Credit unless either (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and Borrowers to eliminate such Letter of Credit
Issuer's risk with respect to the participation in Letters of Credit of the
Defaulting Lender or Lenders, including by cash collateralizing such Defaulting
Lender's or Lenders' Participation Percentage in the Letter of Credit
Outstandings; or (ii) the issuance of such Letter of Credit, taking into account
the potential failure of the Defaulting Lender or Lenders to risk participate
therein, will not cause the Letter of Credit Issuer to incur aggregate credit
exposure hereunder with respect to Loans and Letter of Credit Outstandings in
excess of its Commitment, and Borrowers have undertaken, for the benefit of such
Letter of Credit Issuer, pursuant to an instrument satisfactory in form and
substance to such Letter of Credit Issuer, not to thereafter incur Loans or
Letter of Credit Outstandings hereunder which would cause the Letter of Credit
Issuer to incur aggregate credit exposure hereunder with respect to Loans and
Letter of Credit Outstandings in excess of its Commitment.
Section 11.2 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE.
(a) Whenever a Borrower desires that a Letter of Credit be
issued, such Borrower shall give Agent and the Letter of Credit Issuer written
or telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by Agent) which, if in the form of written notice shall
be substantially in the form of EXHIBIT P, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 12:00 noon (local time at its Head Office) at least
three (3) Business Days (or such shorter period as may be acceptable to the
relevant Lender) prior to the proposed date of issuance (which shall be a
Business Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than Borrowers, an application for,
and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"LETTER OF CREDIT DOCUMENTS". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting Letters of Credit, the terms and
provisions of this Agreement shall control. Agent shall promptly notify each
Lender of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give Agent, each applicable Lender and
Borrowers written notice of the issuance
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of such Letter of Credit, accompanied by a copy to Agent of the Letter of Credit
or Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to
Agent a quarterly (or monthly if requested by any applicable Lender) summary
describing each Letter of Credit issued by such Letter of Credit Issuer and then
outstanding and an identification for the relevant period of the daily aggregate
Letter of Credit Outstandings represented by Letters of Credit issued by such
Letter of Credit Issuer.
Section 11.3 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) Borrowers hereby agree to reimburse (or cause any Letter
of Credit Obligor for whose account a Letter of Credit was issued to reimburse)
each Letter of Credit Issuer, by making payment directly to such Letter of
Credit Issuer in immediately available funds at the payment office of such
Letter of Credit Issuer, for any payment or disbursement made by such Letter of
Credit Issuer under any Letter of Credit (each such amount so paid or disbursed
until reimbursed, an "UNPAID DRAWING") immediately after, and in any event on
the date on which, such Letter of Credit Issuer notifies Borrowers of such
payment or disbursement (which notice to Borrowers shall be delivered reasonably
promptly after any such payment or disbursement), such payment to be made in
U.S. Dollars, with interest on the amount so paid or disbursed by such Letter of
Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (local time at
the payment office of the Letter of Credit Issuer) on the date of such payment
or disbursement, from and including the date paid or disbursed to but not
including the date such Letter of Credit Issuer is reimbursed therefor at a rate
per annum which shall be the rate then applicable to Loans which are Prime Rate
Loans (PLUS an additional 3% per annum if not reimbursed by the Business Day
after the date of such payment or disbursement), any such interest also to be
payable on demand.
(b) Borrowers' obligation under this Section 11.3 to reimburse
each Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which a Borrower may have or have had against such Letter of Credit Issuer,
Agent, or any Lender, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing or upon any draft, certificate or other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; PROVIDED, however, that Borrowers shall not be
obligated to reimburse a Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer.
Section 11.4 LETTER OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by a Letter of Credit Issuer
of any Letter of Credit, such Letter of Credit Issuer shall be deemed to have
sold and transferred to each other Lender with a Commitment, and each such other
Lender (each a "PARTICIPANT") shall be deemed irrevocably and unconditionally to
have purchased and received from such Letter of Credit Issuer, without recourse
or warranty, an undivided interest and participation, to the extent of such
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other Lender's Participation Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder, the obligations of
Borrowers under this Agreement with respect thereto (although Letter of Credit
Fees shall be payable directly to Agent for the account of Lenders as provided
in Section 11.6(b) and the Participants shall have no right to receive any
portion of any fees of the nature contemplated by Section 11.6(c)), the
obligations of any Letter of Credit Obligor under any Letter of Credit Documents
pertaining thereto, and any security for, or guaranty pertaining to, any of the
foregoing. Upon any change in the Commitments of Lenders pursuant to Section
10.19, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 11.4 to reflect the new Participation
Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit,
a Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit. Any action taken
or omitted to be taken by a Letter of Credit Issuer under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Letter of Credit Issuer any
resulting liability.
(c) In the event that a Letter of Credit Issuer makes any
payment under any Letter of Credit and Borrowers shall not have reimbursed (or
caused any applicable Letter of Credit Obligor to reimburse) such amount in full
to such Letter of Credit Issuer pursuant to Section 11.3(a), such Letter of
Credit Issuer shall promptly notify Agent, and Agent shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to Agent for the account of such Letter of Credit Issuer,
the amount of such Participant's Participation Percentage of such payment in
U.S. Dollars and in same day funds, PROVIDED, HOWEVER, that no Participant shall
be obligated to pay to Agent its Participation Percentage of such unreimbursed
amount for any wrongful payment made by such Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer. If
Agent so notifies any Participant required to fund a payment under a Letter of
Credit prior to 11:00 A.M. (local time at its Head Office) on any Business Day,
such Participant shall make available to Agent for the account of the relevant
Letter of Credit Issuer such Participant's Participation Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Participation Percentage of
the amount of such payment available to Agent for the account of the relevant
Letter of Credit Issuer, such Participant agrees to pay to Agent for the account
of such Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to Agent for the account of such Letter of Credit Issuer at the Federal Funds
Effective Rate. The failure of any Participant to make available to Agent for
the account of the relevant Letter of Credit Issuer its Participation Percentage
of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to Agent for the
account of such Letter of Credit Issuer its Participation Percentage of any
payment under any Letter of Credit on the date required, as specified above, but
no Participant shall be responsible for the failure of any other Participant to
make available to Agent for the account of such Letter of Credit Issuer such
other Participant's Participation Percentage of any such payment.
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(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which Agent has received for the account of such
Letter of Credit Issuer any payments from the Participants pursuant to Section
11.4(c) above, such Letter of Credit Issuer shall pay to Agent and Agent shall
promptly pay to each Participant which has paid its Participation Percentage
thereof, in U.S. Dollars and in same day funds, an amount equal to such
Participant's Participation Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective participations,
as and to the extent so received.
(e) The obligations of the Participants to make payments to
Agent for the account of each Letter of Credit Issuer with respect to Letters of
Credit shall be irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, set-off defense or other
right which a Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), Agent, any Letter of Credit Issuer, any
Lender, or other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between a Borrower and the beneficiary
named in any such Letter of Credit), other than any claim which a Borrower may
have against any applicable Letter of Credit Issuer for gross negligence or
willful misconduct of such Letter of Credit Issuer in making payment under any
applicable Letter of Credit;
(iii) any draft, certificate or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not
indemnified by Borrowers, the Participants will reimburse and indemnify the
Letter of Credit Issuer, in proportion to their respective Participation
Percentages, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Letter of Credit Issuer in performing its respective duties in
any way related to or arising out of its issuance of Letters of Credit, PROVIDED
THAT no Participants shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements resulting from the Letter of Credit Issuer's gross
negligence or willful misconduct.
Section 11.5 INCREASED COSTS. If after the Effective Date, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or
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administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Letter of Credit Issuer or any Lender with any request or directive
(whether or not having the force of law) by any such authority, central bank or
comparable agency (in each case made subsequent to the Effective Date) shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such Letter
of Credit Issuer or such Lender's participation therein, or (ii) shall impose on
such Letter of Credit Issuer or any Lender any other conditions affecting this
Agreement, any Letter of Credit or such Lender's participation therein; and the
result of any of the foregoing is to increase the cost to such Letter of Credit
Issuer or such Lender of issuing, maintaining or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by such Letter
of Credit Issuer or such Lender hereunder (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges), then, upon demand to
Borrowers by such Letter of Credit Issuer or such Lender (a copy of which notice
shall be sent by such Letter of Credit Issuer or such Lender to Agent),
Borrowers shall pay to such Letter of Credit Issuer or such Lender such
additional amount or amounts as will compensate any such Letter of Credit Issuer
or such Lender for such increased cost or reduction. A certificate submitted to
Borrowers by any Letter of Credit Issuer or any Lender, as the case may be (a
copy of which certificate shall be sent by such Letter of Credit Issuer or such
Lender to Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate any Letter of Credit Issuer
or such Lender as aforesaid shall be conclusive and binding on Borrowers absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish Borrowers' obligations to pay additional amounts pursuant to
this Section 11.5.
Section 11.6 LETTER OF CREDIT FEES.
(a) Borrowers agree to pay to Agent, for the account of each
Non-Defaulting Lender, pro rata on the basis of its Participation Percentage, a
fee in respect of each Letter of Credit (the "LETTER OF CREDIT FEE"), payable on
the date of issuance (or any increase in the amount, or renewal or extension)
thereof, computed at a rate per annum equal to the Applicable LIBOR Margin then
in effect for Acquisition Loans, on the Stated Amount thereof for the period
from the date of issuance (or increase, renewal or extension) to the expiration
date thereof (including any extensions of such expiration date which may be made
at the election of the account party or beneficiary). Borrowers also agree to
pay additional Letter of Credit Fees, on demand, at the rate of three percent
(3%) per annum, on the Stated Amount of each Letter of Credit for any period
when a Default under Section 10.1(a) or Event of Default is in existence.
(b) Borrowers agree to pay directly to each Letter of Credit
Issuer, for its own account, a fee in respect of each Letter of Credit issued by
it, payable on the date of issuance (or any increase in the amount, or renewal
or extension) thereof, computed at the rate of 1/8 of 1% per annum on the Stated
Amount thereof for the period from the date of issuance (or increase, renewal or
extension) to the expiration date thereof (including any extensions of such
expiration date which may be made at the election of the beneficiary thereof).
(c) Borrowers agree to pay directly to each Letter of Credit
Issuer upon each issuance of, drawing under, and/or amendment, extension,
renewal or transfer of, a Letter of
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Credit issued by it such amount as shall at the time of such issuance, drawing,
amendment, extension, renewal or transfer be the administrative or processing
charge which such Letter of Credit Issuer is customarily charging for issuances
of, drawings under or amendments, extensions, renewals or transfers of, letters
of credit issued by it.
ARTICLE 12
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PROVISIONS OF GENERAL APPLICATION
---------------------------------
Section 12.1 TERM OF AGREEMENT. This Agreement shall continue in full
force and effect and the duties, covenants, and liabilities of Borrowers
hereunder and all the terms, conditions, and provisions hereof relating thereto
shall continue to be fully operative until all Obligations to Agent and each
Lender have been satisfied in full.
Section 12.2 NOTICES.
(a) All notices and other communications pursuant to this
Agreement shall be in writing, either delivered in hand or sent by first-class
mail, postage prepaid, or sent by telex, telecopier, facsimile transmission or
telegraph, addressed as follows or as set forth in any written notice of a
change of address given as required hereby:
(i) If to Borrowers, at:
Team Mucho, Inc.
3390 Mt. Diablo Boulevard
Second Floor
Lafayette, California 94549
Attn: Jose Blanco
Fax: (925) 299-8503
Team Mucho, Inc.
110 East Wilson Bridge Road
Worthington, Ohio 43085
Attn: President
Attn: Chief Legal Officer
Fax: (614) 848-4175
with copies to:
Porter Wright Morris & Arthur LLP
41 South High Street
Columbus, Ohio 43215
Attn: Timothy E. Grady, Esq.
Fax: (614) 227-2100
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(ii) If to Agent, at:
The Provident Bank
One East Fourth Street
Mail Stop 216A
Cincinnati, Ohio 45202
Attn: Christopher B. Gribble
Fax Number: (513) 579-2858
with a copy to:
Baker & Hostetler LLP
312 Walnut Street, Suite 2650
Cincinnati, Ohio 45202
Attn: Eric J. Geppert, Esq.
Fax Number: (513) 929-0303
(iii) If to a Lender, at such address set forth on SCHEDULE
A; or to such other addresses or by way of such telex and other numbers as any
party hereto shall have designated in a written notice to the other parties
hereto.
(b) Except as otherwise expressly provided herein, any notice
or other communication pursuant to this Agreement or any other Loan Document
shall be deemed to have been duly given or made and to have become effective
when delivered in hand to the party to which it is directed, or, if sent by
first-class mail, postage prepaid, or by telex, telecopier, facsimile
transmission or telegraph, and properly addressed in accordance with Section
12.2(a), (i) when received by the addressee; or (ii) if sent by first class
mail, postage prepaid, on the third (3rd) Business Day following the day of the
dispatch thereof, whichever of (i) or (ii) shall be the earlier.
Section 12.3 SURVIVAL OF REPRESENTATIONS. All representations and
warranties made by or on behalf of any Credit Party in this Agreement, or any of
the other Loan Documents shall be deemed to have been relied upon by Agent and
each Lender notwithstanding any investigation made by Agent or any Lender and
shall survive the making of each of the Loans.
Section 12.4 POWER OF ATTORNEY. Each Borrower acknowledges and agrees
that its appointment of Agent as its attorney and agent-in-fact for the purposes
specified in this Agreement is an appointment coupled with an interest and shall
be irrevocable until all of the Obligations are satisfied and this Agreement is
terminated.
Section 12.5 AMENDMENTS. None of the Loan Documents may be modified,
amended or supplemented in any respect whatever, except with the prior written
consent or approval of Agent and the Requisite Lenders or all of Lenders (as the
case may be) and each other Person (other than a Lender) which is a party to
such Loan Document, all in accordance with the terms of Section 10.10 hereof.
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Section 12.6 COSTS, EXPENSES, TAXES AND INDEMNIFICATION.
(a) Borrowers absolutely and unconditionally agree to pay to
Agent, for the respective pro rata account of Agent and each Lender, upon demand
by Agent or any Lender at any time and as often as the occasion therefor may
require, whether or not all or any of the transactions contemplated by any of
the Loan Documents are ultimately consummated (i) all reasonable out-of-pocket
costs and expenses which shall at any time be incurred or sustained by Agent or
any of its directors, officers, employees or agents as a consequence of, on
account of, in relation to or any way in connection with the preparation,
negotiation, execution and delivery of the Loan Documents and the perfection and
continuation of the rights of Lenders and Agent in connection with the Loan, as
well as the preparation, negotiation, execution, or delivery or in connection
with the amendment or modification of any of the Loan Documents or as a
consequence of, on account of, in relation to or any way in connection with the
granting by Agent or any of Lenders of any consents, approvals or waivers under
any of the Loan Documents including, but not limited to, reasonable attorneys'
fees and disbursements; (ii) all reasonable out-of-pocket costs and expenses
which shall be incurred or sustained by Agent or any of Lenders or any of their
directors, officers, employees or agents as a consequence of, on account of, in
relation to or any way in connection with the exercise, protection or
enforcement (whether or not suit is instituted) any of its rights, remedies,
powers or privileges under any of the Loan Documents or in connection with any
litigation, proceeding or dispute in any respect related to any of the
relationships under, or any of the Loan Documents (including, but not limited
to, all of the reasonable fees and disbursements of consultants, legal advisers,
accountants, experts and agents for Agent or any of Lenders, the reasonable
travel and living expenses away from home of employees, consultants, experts or
agents of Agent or any of Lenders, and the reasonable fees of agents,
consultants and experts not in the full-time employ of Agent or any of Lenders
for services rendered on behalf of Agent or any of Lenders); and (iii) upon the
failure of Borrowers to provide or cause to be provided the insurance required
under Section 6.2(b), Agent, on behalf of Lenders, shall have the option to
procure and maintain such insurance without notice to Borrowers.
(b) Borrowers shall absolutely and unconditionally indemnify
and hold harmless Agent and each Lender against any and all claims, demands,
suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses and all other liabilities ("CLAIMS") whatsoever
which shall at any time or times be incurred or sustained by Agent or any Lender
or by any of their shareholders, directors, officers, employees, subsidiaries,
Affiliates or agents on account of, or in relation to, or in any way in
connection with, any of the arrangements or transactions contemplated by,
associated with or ancillary to this Agreement or any of the other Loan
Documents, whether or not all or any of the transactions contemplated by,
associated with or ancillary to this Agreement, or any of such Loan Documents
are ultimately consummated, except for and excluding any such Claim that arises
from the gross negligence or willful misconduct of Agent or any of Lenders or
any Person acting on behalf of any of the same.
(c) Borrowers hereby covenant and agree that any sums expended
by Agent or any Lender which Agent or any Lender is entitled to be reimbursed
for pursuant to this Section 12.6, shall be immediately due and payable upon
demand by Agent or any Lender, and shall bear interest at the Default Interest
Rate from the date Agent or any such Lender incurred such expense until the date
such payment is made in full to Agent or such Lender.
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Section 12.7 LANGUAGE. All notices, applications, certificates,
reports, financial statements and other financial information, correspondence
and all other communications from Borrowers to Agent or any Lender pursuant to
this Agreement or any of the other Loan Documents shall be in the English
language or shall be accompanied by an English translation thereof completely
satisfactory to Agent or such Lender.
Section 12.8 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors in title and assigns; PROVIDED, HOWEVER, that (i) Borrowers may not
assign or delegate any of their rights or obligations hereunder to any Person or
Persons without the express prior written consent of Agent and all of Lenders;
and (ii) no Lender may assign or delegate its rights or obligation hereunder to
any Person or Persons except in accordance with Section 10.19 hereof.
Section 12.9 GOVERNING LAW; JURISDICTION AND VENUE. AGENT ACCEPTS THIS
AGREEMENT, ON BEHALF OF ITSELF AND LENDERS, AT CINCINNATI, OHIO BY ACKNOWLEDGING
AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN BORROWER AND AGENT, ANY LENDER, OR
ANY OTHER HOLDER OF ANY OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
SUBSTANTIVE INTERNAL LAWS AND STATUTES OF LIMITATION (WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF OHIO.
Agent, each Lender and each Borrower hereby designate all courts of
record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Agreement, the
Notes, Loan Documents, or the transactions contemplated by this Agreement shall
be prosecuted as to all parties, their successors and assigns, and by the
foregoing designations Agent, each Lender, and each Borrower consents to the
jurisdiction and venue of such courts. EACH BORROWER WAIVES ANY AND ALL PERSONAL
RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN THE
STATE OF OHIO FOR THE PURPOSES OF LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH
BORROWER. In the event such litigation is commenced, each Borrower agrees that
service of process may be made and personal jurisdiction over such Borrower
obtained by service of a copy of the summons, complaint and other pleadings
required to commence such litigation upon its appointed Agent for Service of
Process in the State of Ohio, which for each Borrower shall be: Team Mucho,
Inc., 110 East Wilson Bridge Road, Worthington, Ohio 43085, Attn: President and
Chief Legal Officer. Each Borrower recognizes and agrees that the agency has
been created for the benefit of such Borrower, and Agent and each Lender agree
that this agency shall not be revoked, withdrawn, or modified without the
consent of Agent.
Section 12.10 WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR LENDERS TO EXTEND CREDIT TO BORROWERS, AND AFTER HAVING THE
OPPORTUNITY TO CONSULT COUNSEL, EACH BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT
TO TRIAL BY JURY IN ANY LAWSUIT OR
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PROCEEDING RELATING TO THIS AGREEMENT OR ARISING IN ANY WAY FROM THE
OBLIGATIONS.
Section 12.11 WAIVERS. Each Borrower waives notice of nonpayment,
demand, notice of demand, presentment, protest and notice of protest with
respect to the Obligations, or notice of acceptance hereof, notice of the Loans
made, credit extended, Letter of Credit issued, or any other action taken in
reliance hereon, and all other demands and notices of any description, except
such as are expressly provided for herein.
Section 12.12 INTERPRETATION AND PROOF OF LOAN DOCUMENTS. Whenever
possible, the provisions of each Loan Document will be construed in such a
manner as to be consistent with this Agreement and each other Loan Document. If
any of the provisions of any Loan Document are inconsistent with this Agreement,
such provisions of this Agreement will supersede such provisions of such Loan
Document. This Agreement, the Loan Documents and all documents relating hereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by Agent or any Lender at the
closing or otherwise, and (c) financial statements, certificates and other
information previously or hereafter furnished to Agent or any Lender, may be
reproduced by Agent or such Lender by an photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process and Agent or such
Lender may destroy any original document so reproduced. Each Borrower agrees and
stipulates that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by Agent
of such Lender in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section 12.13 INTEGRATION OF SCHEDULES AND EXHIBITS. The Schedules and
Exhibits annexed to this Agreement are an integral part of this Agreement and
are incorporated herein by reference.
Section 12.14 HEADINGS. The headings of the Articles, Sections and
paragraphs of this Agreement, the other Loan Documents and the Schedules and
Exhibits hereto and thereto have been inserted for convenience of reference only
and shall not be deemed to be a part of this Agreement or any other Loan
Document.
Section 12.15 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart hereof signed by each of the
parties hereto.
Section 12.16 SEVERABILITY. Any provision of this Agreement which is
prohibited and 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. Notwithstanding the
generality of the foregoing, all agreements between Borrowers and Agent and/or
Lenders, whether now existing or hereafter arising and whether written or oral,
are hereby limited so that in no contingency, whether by reason of acceleration
of the maturity hereof or otherwise, shall
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the interest contracted for, charged, received, paid or agreed to be paid to the
holder hereof exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to Agent
and/or Lenders in excess of the maximum lawful amount, the interest payable to
Agent and/or Lenders shall be reduced to the maximum amount permitted under
applicable law; and if from any circumstance Agent and/or Lenders shall ever
receive anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal amount hereof and not to the payment
of interest, or if such excessive interest exceeds the principal amount hereof,
such excess shall be refunded to Borrowers. All interest paid or agreed to be
paid to Agent and/or Lenders shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full period until
payment in full of the principal amount so that the interest hereon for such
full period shall not exceed the maximum amount permitted by applicable law.
Section 12.17 ONE GENERAL OBLIGATION. All Loans and advances by Lenders
to Borrowers under this Agreement constitute one loan, and all Obligations of
Borrowers to Agent and Lenders under this Agreement constitute one general
obligation. It is expressly understood and agreed that all of the rights of
Agent and each Lender contained in this Agreement shall likewise apply insofar
as applicable to any modification of or supplement to this Agreement.
Section 12.18 SURVIVAL OF INDEMNITIES. All indemnities of Borrowers set
forth herein shall survive the execution and delivery of this Agreement and the
making, prepayment and repayment of Loans.
Section 12.19 GENERAL LIMITATION OF LIABILITY. No claim may be made by
Borrowers, any Lender or Agent or any other Person against Agent or any other
Lender or the Affiliates, directors, officers, employees, attorneys or agents of
any of Agent or any other Lender, for any damages other than actual compensatory
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or any of the other Loan Documents, or any act, omission or event
occurring in connection therewith, except for and excluding any such claim that
arises from the gross negligence or willful misconduct of Agent or any of
Lenders or any Person acting on behalf of any of the same; and Borrowers, each
Lender and Agent hereby, to the fullest extent permitted under applicable law,
waives, releases and agrees not to sue or counterclaim upon any such claim for
any special, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
Section 12.20 NO DUTY. All attorneys, accountants, appraisers,
consultants and other professional Persons (including the firms or other
entities on behalf of which any such Person may act) retained by Agent or any
Lender with respect to the transactions contemplated by the Loan Documents shall
have the right to act exclusively in the interest of Agent or such Lender, as
the case may be, and shall have no duty of disclosure, duty of loyalty, duty of
care, or other duty or obligation of any type or nature whatsoever to Borrowers,
to any of the Subsidiaries or Affiliates, or to any other Person, with respect
to any matters within the scope of such representation or related to their
activities in connection with such representation. Borrowers agree, on behalf of
themselves and the Subsidiaries, not to assert any claim or counterclaim against
any such Persons with regard to such matters, all such claims and counterclaims,
now
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existing or hereafter arising, whether known or unknown, foreseen or
unforeseeable, being hereby waived, released and forever discharged.
Section 12.21 LENDERS AND AGENTS NOT FIDUCIARY TO BORROWERS, ETC. The
relationship among Borrowers and the Subsidiaries and Affiliates, on the one
hand, and Agent and Lenders, on the other hand, is solely that of debtor and
creditor, and Agent and Lenders have no fiduciary or other special relationship
with Borrowers and/or any of the Subsidiaries and Affiliates, and no term or
provision of any Loan Document, no course of dealing, no written or oral
communication, or other action, shall be construed so as to deem such
relationship to be other than that of debtor and creditor.
Section 12.22 INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations
or restrictions of, another covenant, shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or event, condition or
circumstance exists.
Section 12.23 OBLIGATIONS OF BORROWERS. All obligations, liabilities,
covenants and agreements of Borrowers in this Agreement and any other Loan
Document shall be joint and several, whether or not expressly so stated, and
the joint obligation of each Borrower shall be unconditional and absolute and,
without limiting the generality of the foregoing shall not be released,
discharged or otherwise affected by the occurrence, one or more times, of any
act or omission to act or delay of any kind by the other Borrowers, Agent, any
Lender or any other Person or any other circumstance whatsoever which might,
but for the provisions of this Section 12.23, constitute a legal or equitable
discharge of that Borrowers' obligations under this Agreement and the other
Loan Documents. Any right exercisable, direction or notice that may be given or
request that may be made by Borrowers under or in respect of this Agreement or
any other Loan Document may be exercised, given or made by any Borrower, and
the other Borrowers acknowledge and agree that in that case they shall be bound
by the other Borrowers. In the event that any exercise of a right, direction,
notice or request made by a Borrower violates or in any manner conflicts with
or is inconsistent with that of any other Borrowers, Agent and Lenders will
deem the exercise, direction, notice or request of the Parent as binding on
Borrowers and may ignore those of any other Borrower.
Section 12.24 NON-PUBLIC INFORMATION. Agent and Lenders agree that if,
in the course of the transactions contemplated by this Agreement, they come
into possession of any material non-public information regarding Borrowers or
any of their Subsidiaries, they will use all reasonable efforts to maintain the
confidentiality of such information and will not disclose any of such
information to any Person except to their employees, advisors and agents as
necessary or advisable in connection with the negotiation, administration, and
enforcement of the Loans, Letters of Credit and the Loan Documents. The
foregoing undertaking will not apply to any such information after such time it
becomes generally available to the public.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by or on behalf of each of the parties as of the day and in the year first above
written in Cincinnati, Ohio.
TEAM MUCHO, INC.
By: /s/ Jose Blanco
------------------------------
Name: Jose Blanco
----------------------------
Title: Vice President
---------------------------
MUCHO.COM, INC.
By: /s/ Jose Blanco
------------------------------
Name: Jose Blanco
----------------------------
Title: Vice President
---------------------------
THE PROVIDENT BANK
for itself and as Agent
By: /s/ Thomas W. Doc
----------------------------
Name: Thomas W. Doc
---------------------------
Title: Vice President
--------------------------
THE HUNTINGTON NATIONAL BANK
By: /s/ Nancy J. Cracolice
-----------------------------
Name: Nancy J. Cracolice
---------------------------
Title: Vice President
--------------------------
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113
SCHEDULE A
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PARTICIPATION
LENDER COMMITMENTS PERCENTAGE
- -------------------------------------------------- ---------------------------- ---------------------------------------------
THE PROVIDENT BANK Initial Advance Loan 55.5555556%
One East Fourth Street $2,222,222.22
Mail Stop 216A
Cincinnati, Ohio 45202 Acquisition Loans
Attn: Christopher B. Gribble $7,777,777.78
Phone: (513) 579-2750
Fax: (513) 579-2858 Letters of Credit
$1,111,111.11
- -------------------------------------------------- ---------------------------- ---------------------------------------------
THE HUNTINGTON NATIONAL BANK Initial Advance Loan 44.4444444%
41 S. High Street, HC-810 $1,777,777.78
Columbus, Ohio 43215
Attn: Nancy Cracolice Acquisition Loans
Phone: (614) 480-4401 $6,222,222.22
Fax: (614) 480-5791
Letters of Credit
$ 888,888.89
- -------------------------------------------------- ---------------------------- ---------------------------------------------