UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 13, 1997
BRAKE HEADQUARTERS U.S.A., INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-28640 22-3048534
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(State or Other Jurisdiction (Commission File Number) IRS Employer
of Incorporation) Identification Number)
33-16 Woodside Avenue, Long Island City, N.Y 11101
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(Address of principal executive offices)(Zip Code)
(718) 779-4800
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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On November 13, 1997, Brake Headquarters U.S.A., Inc., a Delaware
corporation (the "Registrant"), entered into a Revolving Credit Agreement (the
"Agreement") by and among the Registrant, as Parent Guarantor, National Bank of
Canada ("Agent") as Issuing Bank and as Administrative Agent, the financial
institutions from time to time party to the Credit Agreement ("Lenders"), and
ABS Brakes, Inc., Quality First Brake, Inc., and Sanyo Automotive Parts, Ltd. as
Borrowers (each a "Borrower" and each a wholly owned subsidiary of Registrant)
pursuant to which the Lenders agree to make revolving credit loans to the
Borrowers in an aggregate principal amount at any one time not exceeding
$12,000,000. The initial loan was used (i) to repay all outstanding indebtedness
under a $5,000,000 credit facility with The Chase Manhattan Bank, N.A. and Bank
Leumi, and (ii) to pay certain costs of the transaction. Additional loans may be
used to finance the working capital needs of the Borrowers. Such loans shall be
comprised of Base Rate Loans, LIBOR Loans, and Letters of Credit, each bearing
the respective interest rate calculated as set forth in the Credit Agreement (a
copy of which is attached hereto as Exhibit 2.1). All indebtedness and other
liabilities and obligations of the Borrowers are secured by a first priority
lien and a continuing first priority interest in all personal property and
fixtures of the Borrowers granted to the Agent for the ratable benefit of the
Lenders, all as more fully set forth in the Security Agreement, substantially in
the form attached as an exhibit to the Credit Agreement.
In connection with the Credit Agreement, the Borrowers jointly and
severally executed a Promissory Note in the principal amount of $12,000,000,
substantially in the form attached as an exhibit to the Credit Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
2.1 Credit Agreement, dated November 13, 1997, by and
among the Registrant, as Parent Guarantor, National
Bank of Canada ("Agent") as Issuing Bank and as
Administrative Agent, the financial institutions from
time to time party to the Credit Agreement
("Lenders"), and ABS Brakes, Inc., Quality First
Brake, Inc., and Sanyo Automotive Parts, Ltd. as
Borrowers (each a "Borrower" and each a wholly owned
subsidiary of Registrant).
2.2 Omitted Schedules and Exhibits.
-2-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Brake Headquarters U.S.A., Inc.
Registrant
Dated: November 26, 1997 By: /s/ Joseph Ende
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Joseph Ende, President
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$12,000,000
CREDIT AGREEMENT
dated as of November 13, 1997
among
SANYO AUTOMOTIVE PARTS, LTD.,
ABS BRAKES, INC.,
QUALITY FIRST BRAKE, INC.
as Borrowers,
BRAKE HEADQUARTERS U.S.A., INC.
as Parent Guarantor,
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
NATIONAL BANK OF CANADA, NEW YORK BRANCH
as Issuing Bank and as Administrative Agent
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TABLE OF CONTENTS
This table of contents has been provided for the convenience
of the parties and does not constitute part of the Agreement to which it is
attached.
<TABLE>
<S> <C> <C> <C>
PAGE
ARTICLE 1 DEFINITIONS...................................................................1
1.1 Defined Terms.................................................................1
1.2 Other Definitional Provisions................................................17
ARTICLE 2 THE CREDIT FACILITY..........................................................18
2.1 The Loans....................................................................18
2.2 Procedure for Borrowing......................................................18
2.3 Extension of Commitment Period...............................................19
2.4 Procedure for Conversion and Continuation....................................20
2.5 Termination or Reduction of Commitments......................................20
2.6 Repayment of Loans...........................................................21
2.7 Evidence of Indebtedness.....................................................21
2.8 Optional and Mandatory Prepayments...........................................21
2.9 Interest Rates and Payment Dates.............................................22
2.10 The Letters of Credit........................................................23
2.11 Documentary Collections......................................................27
2.12 Fees.........................................................................27
2.13 Computation of Interest and Fees.............................................28
2.14 Pro Rata Treatment and Payments..............................................28
2.15 Overadvances.................................................................29
2.16 Obligations of Lenders.......................................................29
ARTICLE 3 YIELD PROTECTION AND ILLEGALITY; TAXES.......................................30
3.1 Inability to Determine Interest Rate.........................................30
3.2 Illegality...................................................................30
3.3 Additional Costs; Capital Adequacy...........................................30
3.4 Taxes........................................................................32
3.5 Indemnity....................................................................33
3.6 Creditors' Obligation to Mitigate............................................34
3.7 Borrowers' Obligations Joint and Several.....................................34
ARTICLE 4 REPRESENTATIONS AND WARRANTIES...............................................34
4.1 Organization, Powers, Compliance.............................................34
4.2 Capital Stock, Subsidiaries, Fiscal Year.....................................35
4.3 Authorization, Absence of Conflicts..........................................35
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4.4 Binding Obligations..........................................................35
4.5 Financial Condition and Statements...........................................35
4.6 Taxes........................................................................36
4.7 Title to Properties..........................................................36
4.8 Proceedings..................................................................36
4.9 Labor Disputes; Collective Bargaining Agreements.............................36
4.10 Material Agreements and Licenses.............................................37
4.11 Intangible Assets............................................................37
4.12 Condition of Assets..........................................................37
4.13 No Defaults, Compliance With Laws............................................37
4.14 Indebtedness.................................................................37
4.15 Not an Investment Company or Regulated Company...............................38
4.16 Use of Loan Proceeds and Letters of Credit...................................38
4.17 Ranking of Loans.............................................................38
4.18 Burdensome Provisions........................................................38
4.19 ERISA........................................................................38
4.20 Environmental Matters........................................................39
4.21 Correct Information..........................................................40
ARTICLE 5 CONDITIONS PRECEDENT.........................................................40
5.1 Conditions Precedent to Initial Credit Event.................................40
5.2 Conditions Precedent to Each Credit Event....................................43
ARTICLE 6 COVENANTS....................................................................44
6.1 Corporate Existence, Properties..............................................44
6.2 Payment of Indebtedness, Taxes...............................................44
6.3 Financial Statements, Reports, etc...........................................45
6.4 Notice of Adverse Events and Significant Changes.............................47
6.5 Books and Records; Inspection................................................48
6.6 Insurance....................................................................48
6.7 Compliance with Laws.........................................................49
6.8 Environmental Laws...........................................................49
6.9 Use of Proceeds..............................................................49
6.10 Indebtedness.................................................................49
6.11 Liens........................................................................50
6.12 Contingent Liabilities.......................................................51
6.13 Mergers and Consolidations; Corporate Acquisitions...........................51
6.14 Acquisition and Disposition of Assets........................................52
6.15 Investments.................................................................52
6.16 Change in Nature of Business.................................................53
6.17 Transactions with Affiliates.................................................53
6.18 Restricted Payments..........................................................53
6.19 Subsidiaries.................................................................54
6.20 Leases.......................................................................54
6.21 Financial Covenants..........................................................54
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6.22 Capital Expenditures.........................................................56
6.23 Compensation and Management Fees.............................................56
6.24 Change in Fiscal Year or Fiscal Quarters.....................................57
6.25 Maintenance of Account.......................................................57
6.26 Key-Man Policy...............................................................57
ARTICLE 7 EVENTS OF DEFAULT............................................................57
7.1 Events of Default............................................................57
7.2 Waivers......................................................................60
ARTICLE 8 THE ADMINISTRATIVE AGENT, THE DOCUMENTARY
COLLECTION AGENT AND THE ISSUING BANK........................................60
8.1 Appointment of Administrative Agent..........................................60
8.2 Delegation of Duties.........................................................60
8.3 Exculpatory Provisions.......................................................60
8.4 Reliance by Administrative Agent.............................................61
8.5 Notice of Default............................................................61
8.6 Non-Reliance on Administrative Agent and Other Creditors.....................62
8.7 Indemnification of Administrative Agent, Documentary
Collection Agent and Issuing Bank............................................62
8.8 Agents in Their Individual Capacity..........................................63
8.9 Successor Administrative Agent; Resignation of Documentary
Collection Agent.............................................................63
ARTICLE 9 MISCELLANEOUS................................................................63
9.1 Notices......................................................................63
9.2 Expenses, Indemnity..........................................................64
9.3 Amendments and Waivers.......................................................65
9.4 No Waiver; Cumulative Remedies...............................................66
9.5 Survival of Representations and Warranties...................................66
9.6 Successors and Assigns; Participations and Assignments.......................66
9.7 Adjustments; Set-off.........................................................68
9.8 GOVERNING LAW................................................................69
9.9 JUDICIAL PROCEEDINGS.........................................................69
9.10 WAIVER OF JURY TRIAL.........................................................69
9.11 Further Assurances...........................................................70
9.12 Integration Clause...........................................................70
9.13 Severability.................................................................70
9.14 Counterparts.................................................................70
9.15 Acknowledgments..............................................................70
9.16 Joint and Several Obligations................................................71
ARTICLE 10 PARENT GUARANTEE.............................................................72
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10.1 Guarantee....................................................................72
10.2 Agreement to Pay; Subordination..............................................73
10.3 Guarantee of Payment.........................................................73
10.4 No Discharge or Diminishment of Guarantee....................................73
10.5 Defenses of Borrowers Waived.................................................74
SCHEDULES
Schedule I - Schedule of Commitments and Percentages
Schedule II - Schedule of Offices and Addresses for Notices
Schedule III - Disclosure Schedule
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Conversion or Continuation
Exhibit C - Form of Extension Request
Exhibit D - Form of Security Agreement
Exhibit E - Form of Pledge Agreement
Exhibit F - Form of Subsidiary Guarantee
Exhibit G - Form of Opinion of Counsel
Exhibit H - Form of Borrowing Base Certificate
Exhibit I - Form of Assignment and Acceptance Agreement
</TABLE>
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CREDIT AGREEMENT dated as of November 13, 1997, by and among SANYO
AUTOMOTIVE PARTS, LTD., a New York corporation ("SANYO"), ABS BRAKES, INC., a
New York corporation ("ABS"), QUALITY FIRST BRAKE, INC., a Delaware corporation
("QUALITY", and together with Sanyo and ABS, each, a "BORROWER" and
collectively, the "BORROWERS"), BRAKE HEADQUARTERS U.S.A., INC., a Delaware
corporation (the "PARENT GUARANTOR"), the financial institutions from time to
time party hereto (each a "LENDER" and collectively the "LENDERS") and National
Bank of Canada, New York Branch ("NBC"), as Issuing Bank (in such capacity, the
"ISSUING BANK"), and as Administrative Agent for the Issuing Bank and the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, the Borrowers have requested that the Lenders and the
Issuing Bank extend credit to it in the form of revolving loans and letters of
credit as provided below, and the Lenders and the Issuing Bank are willing to
extend such credit on the terms and subject to the conditions specified below.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following ------------- meanings:
"ABS": as defined in the Preamble.
"ACCOUNTANT": as defined in Section 6.3(a).
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFECTED LIBOR LOANS": all LIBOR Loans of a particular Type, which
have been affected by the occurrence of any event specified in Section 3.1, 3.2
or 3.3.
"AFFILIATE": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 5% or more of the securities
having ordinary voting power for the election of directors of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise. Unless the context otherwise requires, all
references to Affiliates shall be deemed to be to Affiliates of the Parent
Guarantor.
"AGREEMENT": this Credit Agreement, as amended, supplemented, waived
or otherwise modified from time to time.
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"AGGREGATE AVAILABLE COMMITMENTS": at any time, the aggregate amount
of the Available Commitments of all the Lenders at such time.
"AGGREGATE COMMITMENTS": at any time, the aggregate amount of the
Commitments of all the Lenders at such time.
"AGGREGATE EXPOSURE": at any time, the sum of (a) the aggregate
principal amount of all Loans outstanding at such time, plus (b) the Aggregate
LC Exposure at such time.
"AGGREGATE LC EXPOSURE": at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the aggregate
amount drawn under Letters of Credit for which the Issuing Bank or the Lenders,
as the case may be, have not been reimbursed by the Borrowers.
"ASSIGNEE": as defined in Section 9.6(c).
"ASSIGNMENT OF KEY MAN POLICY": as defined in Section 6.26.
"AVAILABLE COMMITMENT": at any time, as to any Lender, the amount,
if any, by which at such time (a) the lesser of (x) such Lender's Commitment or
(y) such Lender's Percentage of the Borrowing Base, exceeds (b) such Lender's
Exposure.
"BANK LEUMI": Bank Leumi Trust Company of New York, a New York State
chartered trust company.
"BANKRUPTCY CODE": the Bankruptcy Code of 1978, 11 U.S.C. Sec. 101
et seq., as amended from time to time.
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16%) equal to the greater of (a) the NBC Base Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2%. For purposes hereof "NBC BASE RATE" shall mean the rate of
interest per annum established by NBC from time to time as a reference rate for
short-term commercial loans in Dollars to U.S. corporate borrowers, as such rate
is in effect on such day (which the Borrowers acknowledge is not necessarily
NBC's lowest rate); and "FEDERAL FUNDS EFFECTIVE RATE" shall mean the overnight
cost of funds of NBC, as determined solely by NBC. Any change in the Base Rate
due to a change in the NBC Base Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such change
in the NBC Base Rate or the Federal Funds Effective Rate.
"BASE RATE LOAN": at any time, any Loan which bears interest at such
time at a rate that is based upon the Base Rate.
"BENEFITTED LENDER": as defined in Section 9.7.
"BORROWER" or "BORROWERS": as defined in the preamble hereto.
"BORROWING": the aggregate amount of all Loans of a particular Type
made to the Borrowers on a particular Borrowing Date.
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"BORROWING BASE" means, at any time, an amount equal to:
(i) up to seventy-five percent (75%) of the aggregate amount
owing at such time on all Eligible Receivables of the Borrowers and
their Subsidiaries, plus
(ii) up to the lesser of (a) fifty-five percent (55%) of the
aggregate value (at the lower of cost or market value) at such time
of all Eligible Inventory of the Borrowers and their Subsidiaries or
(b) $6,000,000, minus
(iii) such reserves (including environmental reserves), if
any, as the Administrative Agent, in its sole discretion, may
determine to be necessary or appropriate from time to time, minus
(iv) the aggregate amount of Unsubordinated Convertible Debt
outstanding from time to time
"BORROWING BASE CERTIFICATE": as defined in Section 6.3(e).
"BORROWING DATE": any Business Day on which a Loan is made to any
Borrower.
"BUSINESS": as defined in Section 4.20(a).
"BUSINESS DAY": a day (i) other than a Saturday, Sunday or any other
day on which commercial banks in New York, New York are authorized or required
by law to close and (ii) if such day relates to a LIBOR Loan, which is also a
day on which dealings in eurodollar deposits are carried out between banks in
the relevant interbank eurodollar market.
"CALCULATION PERIOD": as defined in Section 6.21(b).
"CALCULATION VALUE": as defined in Section 6.15(f).
"CAPITAL EXPENDITURES": for any period, the aggregate amount of all
expenditures, whether paid in cash or other assets or accrued as a liability
(including the aggregate amount of all obligations under Capital Leases incurred
during such period) made or to be made by the Borrowers or any of their
respective Restricted Subsidiaries during such period to acquire or construct
fixed or capital assets, plant and equipment (including any renewals,
improvements and replacements thereof and all tooling costs, but excluding
repairs), computed in accordance with GAAP.
"CAPITAL LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
and any and all warrants or options to purchase any of the foregoing.
"CASH COLLATERALIZE": with respect to any outstanding Letter of
Credit, to deposit cash with the Administrative Agent in an amount equal to the
undrawn amount of such Letter of Credit, as collateral
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security for the Borrowers obligations to reimburse the Issuing Bank or the
Lenders, as the case may be, for any payment made by the Issuing Bank under or
pursuant to such Letter of Credit.
"CLOSING DATE": the date on which this Agreement shall have been
executed by all the parties hereto.
"CLOSING FEES": as defined in Section 2.12(a).
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all assets of any Borrower or any Restricted
Subsidiary which secure the Obligations from time to time, including all assets
which constitute "Collateral", as such term is defined in any Security Document.
"COMMITMENT": with respect to each Lender, the commitment of such
Lender to make Loans pursuant to Section 2.1, and to issue or participate in
Letters of Credit pursuant to Section 2.10, in the amount specified for such
Lender in Schedule I, as such Lender's Commitment may be terminated or reduced
from time to time in accordance with the provisions of this Agreement.
"COMMITMENT PERIOD": the period from and including the date hereof
to but excluding the Commitment Termination Date.
"COMMITMENT TERMINATION DATE": November 13, 2000, such later date to
which the Commitment Termination Date may be postponed pursuant to Section 2.3,
or such earlier date on which the Commitments may terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Borrowers within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrowers and which is treated as a single employer under Section 414(b) or
414(c) of the Code.
"CONSOLIDATED EBITDA": as defined in Section 6.21(b).
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": as defined in Section
6.21(b).
"CONSOLIDATED INTEREST COVERAGE RATIO": as defined in Section
6.21(b).
"CONSOLIDATED INTEREST EXPENSE": as defined in Section 6.21(b).
"CONSOLIDATED LEVERAGE RATIO": as defined in Section 6.21(b).
"CONSOLIDATED NET INCOME": as defined in Section 6.21(b).
"CONSOLIDATED TANGIBLE NET WORTH": as defined in Section 6.21(b).
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"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONVERTIBLE DEBENTURES": the 5% Convertible Debentures dated
November 7, 1997, issued by Brake in the aggregate original principal amount of
$1,000,000.
"CONVERTIBLE NOTES": the 8% Convertible Non-Negotiable Promissory
Notes dated November 6, 1997, issued by Brake in the aggregate principal amount
of $600,000.
"CORPORATE ACQUISITION": any transaction pursuant to which the
Parent Guarantor, any Borrower or any of their respective Subsidiaries (a)
acquires any Capital Stock (or warrants, options or other rights to acquire such
Capital Stock) of any Person other than the Parent Guarantor, a Borrower or any
Person which is then a Subsidiary of the Parent Guarantor, or (b) makes any
Person a Subsidiary of the Parent Guarantor or a Borrower, or causes any such
Person to be merged with or into the Parent Guarantor, a Borrower or any of
their respective Subsidiaries, or (c) purchases all or substantially all of the
business or assets of any Person or of any operating division of any Person, or
(d) enters into an agreement, or acquires an option, to effect any of the
foregoing transactions; provided, however, that the purchase of not more than 5%
of the outstanding Capital Stock of any Person on a securities exchange or in
the over-the-counter market shall not constitute a "CORPORATE ACQUISITION"
hereunder.
"CREDITOR": each Lender and the Issuing Bank, individually; and
"Creditors" means the Lenders and the Issuing Bank, collectively.
"CUSTOMARY CHARGES": as defined in Section 2.12(c).
"DEFAULT": any of the events specified in Section 7.1, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"DISCLOSURE SCHEDULE": the Disclosure Schedule attached to this
Agreement as Schedule III.
"DOCUMENTARY COLLECTION AGENT": as defined in Section 2.11.
"DOCUMENTARY COLLECTION FEE": as defined in Section 2.12(d).
"DOLLARS": and "$": dollars in lawful currency of the United States
of America.
"DRAWING DATE": as defined in Section 2.10(f).
"EFFECTIVE DATE": the date on which all the conditions precedent set
forth in Section 5.1 shall have been satisfied or waived.
"ELIGIBLE INVENTORY" means, as of any date of determination, all
Inventory of the Borrowers and their Subsidiaries:
(a) that is of merchantable quality and fit for sale;
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(b) to which a Borrower or a Subsidiary of a Borrower has
good, marketable and undisputed title, free and clear of any
Liens, other than Permitted Liens described in clauses (a),
(b) or (e) of Section 6.11; and
(c) in which the Administrative Agent holds a perfected
first priority security interest for the benefit of the
Lenders and the Issuing Bank;
provided, however, that there shall in any event be excluded
from Eligible Inventory
(1) Inventory which consists of work in process;
(2) any goods which are consigned or leased to a Borrower or
a Subsidiary of a Borrower or are, for any reason, not owned
by the Borrowers or their Subsidiaries;
(3) Inventory allocable to contracts with Governmental
Authorities;
(4) goods in the possession of third-party processors (other
than processors which have entered into collateral access
agreements satisfactory to the Administrative Agent in favor
of the Administrative Agent);
(5) all amounts which constitute supplies, general ledger
material reserves, unamortized tooling, applied indirect
overhead, reserves for progress payments, costs of
procurement, engineering, manufacturing prototypes and
program accounting;
(6) items which are obsolete or are not marketable in the
ordinary course of business of the Borrowers and their
Subsidiaries; and
(7) items which are determined by the Majority Lenders, in
their reasonable discretion, to be ineligible for any other
reason.
"ELIGIBLE RECEIVABLE" means a Receivable of any Borrower or any
Subsidiary of a Borrower in which the Administrative Agent holds a perfected
first priority security interest for the benefit of the Lenders and the Issuing
Bank and which meets each of the following requirements:
(1) such Receivable arose from a bona fide outright sale of
goods or rendition of services by such Borrower or Subsidiary (and
not consignments or "sale or return" transactions) and such goods
have been shipped or services rendered to the respective account
debtors;
(2) such Receivable is based on an enforceable order or
contract for goods shipped or services rendered and such goods were
delivered or such services were rendered in accordance with such
order or contract;
(3) the amount shown as a Receivable on the relevant
Borrower's or Subsidiary's books and any invoice or statement
delivered to the Administrative Agent or any Lender is owing to such
Borrower or Subsidiary and no partial payment has been made thereon
by anyone;
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(4) such Receivable is not subject to any discount, credit,
rebate, allowance, set-off, reserve, chargeback, contra, claim of
reduction, counterclaim, recoupment, or any claim for credit,
allowances or adjustments by the account debtor on such Receivable
known to any Borrower or any Subsidiary of a Borrower because of
returned, inferior and/or damaged goods or unsatisfactory services,
or for any other reason, except for customary discounts allowed for
prompt payment;
(5) such Borrower or Subsidiary has good, marketable and
undisputed title to such Receivable, free and clear of any Liens,
other than Permitted Liens described in clauses (a), (b) or (e) of
Section 6.11;
(6) such Receivable is unconditionally payable in Dollars
and the obligations of the account debtor under such Receivable (i)
are not evidenced by a promissory note or other negotiable
instrument (except for any such note or instrument which has been
pledged to the Administrative Agent for the benefit of the Lenders
and the Issuing Bank) and (ii) are not in dispute and are not
subject to any set-off or counter-claim;
(7) the account debtor on such Receivable (i) is not another
Borrower, a Guarantor or another Affiliate of a Borrower and (ii) is
not bankrupt or insolvent or the subject of receivership
proceedings, and has not made an assignment for benefit of creditors
or a composition with creditors;
(8) to the extent such Receivable is reflected in any
Borrowing Base Certificate, the account debtor thereon has not as of
the effective date of such Borrowing Base Certificate returned, or
refused to retain, or asserted a right to return or refuse, any of
the goods from the sale of which such Receivable or portion thereof
arose;
(9) such Receivable is evidenced by an invoice dated the
date that shipment, delivery or performance was made or rendered to
the account debtor and, except for Receivables with respect to which
a longer time is expressly permitted by the Administrative Agent in
writing from time to time, such Receivable is not more than 120 days
from invoice date or more than 60 days past due;
(10) the amount of such Receivable reported on a Borrowing
Base Certificate as an Eligible Receivable excludes as of the date
of such Borrowing Base Certificate (i) all partial or total payments
received therefor, (ii) all chargeback billings, (iii) all finance
charges, late charges or other service charges, (iv) any retainages
agreed to by such Borrower or asserted by the account debtor
thereon, (v) reversals of credits previously given to the account
debtor thereon, or (vi) credits received from the account debtor
thereon if the credit has been issued, aged or outstanding 90 days
or more;
(11) such Receivable does not represent progress or contract
billings;
(12) such Receivable does not arise out of a contract with
or order from an account debtor which by its terms forbids or makes
void or unenforceable the assignment of the Receivable arising with
respect thereto;
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(13) if the United States of America, any state, territory,
county or municipality, or any agency, department or instrumentality
thereof, is the account debtor with respect to such Receivable, such
Borrower or Subsidiary shall have duly assigned its rights to
payment thereon to the Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended, or any similar state
or local statute or regulation; and
(14) either (i) the account debtor on such Receivable is a
resident of the United States of America or the Commonwealth of
Puerto Rico, an entity organized under the laws of the United States
of America or the Commonwealth of Puerto Rico or any political
subdivision thereof, or an office or branch located in the United
States of America or the Commonwealth of Puerto Rico of an entity
organized under the laws of another country, or (ii) such Receivable
is backed by a letter of credit in form and issued by a bank
satisfactory to the Administrative Agent or is credit-insured
pursuant to a policy in form and issued by an insurer satisfactory
to the Administrative Agent.
(15) such Receivable is not deemed ineligible, and the
account debtor thereon is not deemed unacceptable, by the Majority
Lenders in their absolute discretion for any other reason;
"ENVIRONMENTAL COSTS": any and all costs or expenses (including,
without limitation, attorneys' and consultants' fees, investigation and
laboratory fees, response costs, court costs and litigation expenses) of
whatever kind or nature, known or unknown, contingent or otherwise, arising out
of, or in any way relating to any violation of, noncompliance with or liability
under any Environmental Laws or any orders, requirements, demands, or
investigations of any Person related to any Environmental Laws. Environmental
Costs include any and all of the foregoing, without regard to whether they arise
out of or are related to any past, pending or threatened proceeding of any kind.
"ENVIRONMENTAL LAWS": any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or at any time hereafter in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
from time to time thereunder.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
LIBOR Loan, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves) under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"EVENT OF DEFAULT": any of the events specified in Section 7.1,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
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"EXISTING CREDIT AGREEMENTS": [DESCRIBE EXISTING CREDIT AGREEMENTS
WITH CHASE AND BANK LEUMI].
"EXPOSURE": with respect to any Lender at any time, the sum of (c)
the aggregate principal amount of all Loans of such Lender outstanding at such
time, plus (d) such Lender's LC Exposure at such time.
"EXTENSION REQUEST": as defined in Section 2.3.
"FEE": each of the Closing Fees, the Letter of Credit Fees, the
Customary Charges, the Documentary Collection Fee, the Modification Fee, and the
Overadvance Fee; and "FEES" means all of the foregoing, collectively.
"FIFTEEN INC.": Fifteen Inc., a wholly-owned Subsidiary of Quality
that is organized under the laws of the State of New York.
"FINANCIAL COVENANTS": the covenants set forth in Sections 6.20,
6.21 and 6.22.
"FORMER PLAN": any employee benefit plan in respect of which the
Borrowers or a Commonly Controlled Entity could incur liability because of
Section 4069 or Section 4212(c) of ERISA.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, consistently applied; provided,
however, that for purposes of determining compliance with the Financial
Covenants, the term "GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on the date of this Agreement, applied
on a basis consistent with their application in the preparation of the financial
statements referred to in Section 4.5.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEE OBLIGATION": of or by any Person shall mean any
obligation, contingent or otherwise, of such Person, guaranteeing or entered
into with the purpose of guaranteeing any Indebtedness of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the holder of such Indebtedness of the
payment of such Indebtedness, or (c) to maintain working capital, equity or
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness, and any other contract
which, in economic effect, is substantially equivalent to a guarantee; provided,
however, that the term "Guarantee Obligation" shall not include endorsements for
collection or deposit of instruments in the ordinary course of business.
"GUARANTOR": the Parent Guarantor and each Sub sidiary Guarantor;
and "GUARANTORS" means the Parent Guarantor and the Subsidiary Guarantors,
collectively.
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"HAZARDOUS SUBSTANCES": any and all wastes, materials and
substances, whether solid, liquid or gaseous, (i) defined as "hazardous
substances" or "toxic substances" in any Environmental Law, (ii) otherwise
protected against by any Environmental Law, or (iii) the discharge, spillage,
uncontrolled loss, seepage or filtration of which constitutes a violation of any
Environmental Law, including, without limitation, radioactive waste, asbestos,
asbestos-containing materials, radon gas, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum products and by-products and oil.
"INDEBTEDNESS": of any Person at any date (a) all indebtedness,
liabilities and obligations of such Person for borrowed money (including, in the
case of the Borrowers, indebtedness hereunder), (b) all indebtedness evidenced
by notes, bonds, debentures or similar instruments, (c) all obligations of such
Person under Capital Leases, (d) all obligations of such Person in respect of
acceptances (as defined in Section 3-410 of the UCC) issued or created for the
account of such Person, (e) the undrawn amount of all letters of credit issued
for the account of such Person (including, in the case of the Borrowers, the
Letters of Credit) and (without duplication) all drafts drawn thereunder, (f)
all indebtedness of such Person for the deferred purchase price of property or
services (other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (g) all
obligations of such Person, contingent or otherwise, under or in respect of any
interest rate swap, cap or collar agreement, any currency exchange rate swap
agreement, or similar arrangement between such Person and a bank or other
financial institution providing for the transfer or mitigation of interest or
exchange risks either generally or under specific contingencies, (h) all
indebtedness or obligations of the types referred to in the preceding clauses
(a) through (g) above secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof and (i) all Guarantee Obligations of such Person, in each case
determined as at such date, without duplication and in accordance with GAAP. The
Indebtedness of any Person shall include the Indebtedness of any Partnership in
which such Person is a general partner, unless such partnership Indebtedness is
without recourse to such general partner. The term "Indebtedness", when used
with respect to any Person, shall include all liabilities and obligations of
such Person in respect of any of the items specified above, irrespective of
whether GAAP requires that such liabilities and obligations be reported as
indebtedness on such Person's financial statements or whether such Person
actually reports such liabilities and obligations as indebtedness on its
financial statements.
"INDEMNITEE": as defined in Section 9.2(b).
"INELIGIBLE FINANCIAL INSTITUTIONS": any banks or other financial
institutions, other than (a) the Lenders and (b) banks or other financial
institutions which have executed and delivered to the Administrative Agent
letter agreements in form and substance reasonably satisfactory to the
Administrative Agent, acknowledging the security interest of the Administrative
Agent in any funds or credit balances maintained by them for the account of the
Parent Guarantor, any Borrower or any Restricted Subsidiary, agreeing to block
such accounts and wire all cash balances to the Administrative Agent upon demand
by the Administrative Agent following the occurrence of an Event of Default
hereunder, and limiting their set-off rights in a manner satisfactory to the
Administrative Agent.
"INTEREST PERIOD": with respect to any LIBOR Loan, the period
commencing on the borrowing or conversion date of such LIBOR Loan, or on the
last day of the immediately preceding Interest Period applicable to such LIBOR
Loan, as the case may be, and ending one, two or three months thereafter, as
selected by the relevant Borrower in its notice of borrowing, conversion or
continuation, as the case may be, given with respect thereto; provided, however,
that:
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(a) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately
preceding Business Day;
(b) no Interest Period may extend beyond the Commitment
Termination Date; and
(c) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the relevant subsequent calendar month) shall
end on the last Business Day of the relevant subsequent calendar
month.
"INVENTORY": with respect to any Person, all goods and other
personal property owned by such Person which are held for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute
raw materials, work in process or materials used or consumed or to be used or
consumed in such Person's business, or in the processing, packaging or shipping
of the same, and all finished goods, including all inventory as defined in
Section 9-109(4) of the UCC.
"GILFORD": Gilford Securities Incorporated.
"INVESTMENT ACCOUNT": as defined in Section 6.15.
"INVESTMENTS": in any Person means:
(i) the purchase or acquisition (whether for cash, property,
services or securities or otherwise, and whether structured as an
acquisition or as a merger or consolidation or otherwise) of any
share of Capital Stock, any bond, note, debenture or other evidence
of indebtedness, or any other security, issued by such Person, or of
any partnership or other ownership interest in such Person, or any
binding obligation or option to make such purchase or acquisition,
(ii) any loan, advance, or extension of credit to, any
deposit with, and any contribution to the capital of, such Person,
and any commitment to make such loan, advance, extension of credit,
deposit or contribution to capital,
(iii) any Guarantee Obligation, or other contingent
obligation, with respect to Indebtedness or other liability of such
Person, and
(iv) any purchase of all or any integral part of the
business of such Person or assets comprising such business or part
thereof, and any binding obligation or option to make such purchase;
provided, however, that the term "Investment" shall not include (a) current
trade and customer accounts receivable for services rendered in the ordinary
course of business and payable in accordance with customary trade terms and
other investments in accounts, contract rights and chattel paper arising or
acquired in the ordinary course of business or (b) stock or other securities
acquired in connection with the satisfaction or enforcement of debts or claims
due or owing or as security for any such debts or claims,
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provided that such debts or claims were not created for the purpose of or with a
view to acquiring such stock or other securities.
"ISSUING BANK": as defined in the preamble hereto.
"KEY MAN POLICY": as defined in Section 6.26.
"LC APPLICATION": as defined in Section 2.10(c).
"LC DISBURSEMENT": any payment or disbursement made by the Issuing
Bank under or pursuant to a Letter of Credit.
"LC EXPOSURE": with respect to any Lender at any time, such Lender's
Percentage of the Aggregate LC Exposure.
"LENDER" and "LENDERS": as defined in the preamble hereto.
"LETTER OF CREDIT" and "LETTERS OF CREDIT": as defined in Section
2.10(a).
"LETTER OF CREDIT FEE": as defined in Section 2.12(b); and "LETTER
OF CREDIT FEES" means the Letter of Credit Fees payable with respect to all the
Letters of Credit issued hereunder from time to time, collectively.
"LIBO BASE RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, (a) the offered rate of Dollar deposits for a
period comparable to such Interest Period to leading banks in the London
interbank market which appears on the Telerate Access Service Page 3750 (British
Bankers Association Interest Settlement Rates) provided by Dow Jones Telerate,
Inc. two Business Days prior to the first day of such Interest Period or (b) if
no such offered rate appears on the Telerate Access Service page 3750 on the
relevant date, the rate per annum quoted at approximately 11:00a.m. London time
by the principal London branch of National Bank of Canada two Business Days
prior to the first day of such Interest Period for the offering to leading banks
in the London interbank market of Dollar deposits in immediately available
funds, for a period, and in an amount, comparable to the Interest Period and
principal amount of the LIBOR Loan which shall be made by National Bank of
Canada and shall be outstanding during such Interest Period.
"LIBOR LOAN": at any time, any Loan which bears interest at such
time at a rate which is based upon the LIBO Rate.
"LIBO RATE": with respect to each day during each Interest Period
pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward, if necessary, to the
nearest 1/16th of 1%):
LIBO Base Rate
------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"LIEN": any mortgage, pledge, hypothecation, assignment, security
deposit arrangement, encumbrance, lien (whether statutory, consensual or
otherwise), charge or other security interest or any
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preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"LOAN" and "LOANS": as defined in Section 2.1(a).
"LOAN DOCUMENTS": this Agreement, the Note, the Security Documents,
the LC Applications, the Subsidiary Guarantee, and any other instruments or
documents relating hereto or thereto.
"LOSSES": as defined in Section 9.2(b)(i).
"MAJORITY LENDERS": at any time, Lenders who have Percentages which
total at least 66%.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrowers taken as a whole or their ability to perform their respective
obligations under this Agreement or any other Loan Document or (b) the validity
or enforceability (against any Borrower) of this Agreement or any other Loan
Document, or any of the rights or remedies of the Administrative Agent, the
Issuing Bank or any Lender hereunder or thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": any amount payable by any Borrower,
the Parent Guarantor and/or any Restricted Subsidiary in respect of or under any
Environmental Law for remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties or any combination thereof, that could have a
Material Adverse Effect.
"MINIMUM CAPITAL REQUIREMENT": as defined in Section 6.21(b).
"MODIFICATION FEE": as defined in Section 2.12(e).
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NBC": as defined in the preamble.
"NBC BASE RATE": as set forth in the definition of the term "Base
Rate".
"NEW EQUITY ISSUANCES": all issuances by Brake after the date hereof
of common stock or warrants, options or other rights to acquire common stock
(but excluding any debt security that is convertible into or exchangeable for
common stock).
"NOTE": as defined in Section 2.7(b).
"NOTICE OF BORROWING": as defined in Section 2.2(a).
"NOTICE OF CONVERSION OR CONTINUATION": as defined in Section
2.4(a).
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"OBLIGATIONS": all indebtedness and other liabilities and
obligations of the Borrowers or any Guarantor hereunder or under any other Loan
Document including, without limitation, (i) the obligation to repay the Loans in
full when due, (ii) the obligation to pay interest on the Loans at the rates and
on the dates specified herein, (iii) the obligation to pay the Fees in full when
due at the rates and on the dates specified herein, (iv) the obligation to
reimburse the Issuing Bank in full for any payment made by it under a Letter of
Credit as provided herein or in the relevant LC Application, (v) the obligation
to Cash Collateralize the Letters of Credit as provided herein, (vi) the
obligation to indemnify the Administrative Agent, the Issuing Bank and the
Lenders as provided herein or in any other Loan Document, (vii) the obligation
to pay costs and expenses as provided herein or in any other Loan Document, and
(viii) the obligation to pay all other amounts specified herein or in any other
Loan Document.
"OBLIGOR": each Borrower and each Guarantor; and "OBLIGORS" means
the Borrowers and the Guarantors, collectively.
"OTHER TAXES": as defined in Section 9.2(a).
"OVERADVANCE": as defined in Section 2.14(a).
"OVERADVANCE FEE": as defined in Section 2.12(f).
"PARENT GUARANTOR": as defined in the preamble.
"PARTICIPANTS": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"PERCENTAGE": as to any Lender at any time, (a) so long as any
Commitments are in effect, the percentage set forth opposite such Lender's name
in the column entitled "Percentage" on Schedule I, as such schedule may be
amended from time to time and (b) after the Commitments have been canceled or
terminated, have been reduced to $0 or have expired, the percentage of the
aggregate principal amount of all Loans then outstanding represented by the
aggregate outstanding principal amount of such Lender's Loans. Each Lender's
Percentage shall initially be equal to the percentage of the Aggregate
Commitments represented by such Lender's Commitment as of the Closing Date and
shall be changed from time to time to reflect any changes in the relative sizes
of the Lenders' respective Commitments, whether by reason of assignments,
permitted non-pro rata repayments of the Loans, or otherwise. The Administrative
Agent is hereby authorized to amend Schedule I from time to time to the extent
necessary to reflect any such changes, and the Schedule shall be deemed to have
been amended automatically, without the need for any action by the
Administrative Agent, to reflect any such changes recorded in the Register.
"PERMITTED LIENS": the Liens described in clauses (a) through (i) of
Section 6.11.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": any employee benefit plan which is covered by ERISA and in
respect of which the Borrowers or a Commonly Controlled Entity is an "employer"
as defined in Section 3(5) of ERISA.
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"POST-DEFAULT RATE": (i) with respect to the outstanding principal
amount of any Loan, a rate per annum equal to the rate otherwise applicable to
such Loan under Section 2.9, plus two percent (2%), and (ii) with respect to
interest, fees or other amounts that are not paid when due, a rate per annum
equal to the Base Rate in effect from time to time, plus two percent (2%),
changing as and when the Base Rate changes.
"PROPERLY CONTESTED": as defined in Section 6.2.
"PROPERTIES": as defined in Section 4.20(a).
"QUALITY": as defined in the preamble hereto.
"RECEIVABLE" means any right, now existing or hereafter arising, of
a Borrower to payment for goods sold or for services rendered which constitutes
an account receivable of such Borrower under GAAP.
"REGISTER": as defined in Section 9.6(d).
"REGULATION U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty-day notice period is
waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section 4043
or any successor regulation thereto.
"REQUIREMENT OF LAW": as to any Person, the articles or certificate
of incorporation, declaration of trust, partnership agreement and by-laws or
other organizational or governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its material property or to which such Person or any of its material
property is subject.
"RESPONSIBLE OFFICER": with respect to any Person, the president or
chief financial officer of such Person or, only with respect to any
certification of incumbency of any officer or any resolutions or other matters
of corporate authorization or governance, the secretary of such Person.
"RESTRICTED PAYMENT": with respect to any Person, (i) the
declaration or payment by such Person of any dividend (excluding dividends
payable solely in Capital Stock of such Person) or any other distribution on any
share of the Capital Stock of such Person, (ii) the purchase, redemption or
retirement by such Person of any share of any of such Person's Capital Stock,
(iii) any payment by such Person resulting in the reduction of the capital of
such Person, and (iv) the payment by such Person of any amount, including
principal and interest, of subordinated indebtedness of such Person.
"RESTRICTED SUBSIDIARY": (i) each Subsidiary of the Parent Guarantor
which (x) is not a Subsidiary of a Borrower, (y) has been designated by the
Parent Guarantor as a "Restricted Subsidiary" and (z) has complied with the
requirements of Section 6.19(b) and (ii) each Subsidiary of a Borrower.
"SANYO": as defined in the preamble.
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"SEC": the United States Securities and Exchange Commission or any
successor thereto.
"SECURITY AGREEMENT": as defined in Section 5.1(a)(iii).
"SECURITY DOCUMENTS": collectively, the Security Agreement, the
Pledge Agreement (including, in each case, any supplements thereto executed by
an additional grantor, debtor or pledgor), the Assignment of Key Man Policy, and
each financing statement or other document executed, filed or recorded in
connection therewith; and "SECURITY DOCUMENT" means each of the foregoing,
individually.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT" and "SOLVENCY": with respect to any Person on a particular
date, the condition that on such date (a) 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, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small amount of capital.
"SUBORDINATED INDEBTEDNESS": all Indebtedness of the Borrowers which
is subordinated to the Obligations by an instrument in writing satisfactory in
form and substance to the Administrative Agent.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power 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; and "WHOLLY-OWNED SUBSIDIARY"
means, as to any Person, a corporation, partnership or other entity all of whose
shares of stock or other ownership interests are owned by such Person and/or by
one or more wholly owned Subsidiaries of such Person. Unless the context
otherwise requires, all references to Subsidiaries shall be deemed to be to
direct or indirect Subsidiaries of the Parent Guarantor.
"SUBSIDIARY GUARANTEE": as defined in Section 5.1(a)(v).
"SUBSIDIARY GUARANTOR": each Subsidiary that executes the Subsidiary
Guarantee or becomes a party thereto pursuant to a Supplement (as such term is
defined therein).
"TAXES": as defined in Section 3.4(a).
"THIRTY-NINE INC.": Thirty-Nine Inc., a wholly-owned Subsidiary of
Quality that is organized under the laws of the State of New York.
"THIRTY-THREE INC.": Thirty-Three Inc., a wholly-owned Subsidiary of
Quality that is organized under the laws of the State of New York.
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"TRANSFEREE": as defined in Section 9.6(g).
"TYPE": as to any Loan or portion thereof, its nature as a Base Rate
Loan or a LIBOR Loan.
"UCC": the Uniform Commercial Code as adopted in New York and from
time to time in effect.
"UNDERFUNDING": an excess of the present value of all accumulated
benefits under a Plan (based on those assumptions used to fund such Plan), over
the aggregate market value of the assets of such Plan allocable to such
accumulated benefits, determined in each case as of the most recent annual
valuation date.
"UNRESTRICTED SUBSIDIARY": each Subsidiary of the Parent Guarantor
that is not a Restricted Subsidiary.
"UNSUBORDINATED CONVERTIBLE DEBT": the aggregate amount of
Indebtedness evidenced by the Convertible Notes and the Convertible Debentures
that does not constitute Subordinated Indebtedness.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any other Loan Document or any certificate or other document made
or delivered pursuant hereto.
(b) As used herein, in the other Loan Documents, and in any
certificate or other documents made or delivered pursuant hereto or thereto,
accounting terms which are not defined in Section 1.1 and accounting terms which
are partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; references to
Articles, Sections, Schedules and Exhibits are references to Articles and
Sections of, and Schedules and Exhibits to, this Agreement unless otherwise
specified; and the words "this Agreement" refer to this Credit Agreement,
together with all schedules and exhibits hereto, as amended, restated, modified
or supplemented from time to time.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Unless otherwise expressly specified herein, defined terms
denoting the singular number shall, when in the plural form, denote the plural
number of the matter or item to which such defined terms refer, and vice-versa.
Words of the neuter gender mean and include correlative words of the masculine
and feminine gender.
(f) The Table of Contents and Article, Section, Schedule and Exhibit
headings used in this Agreement are for convenience only and shall not affect
the construction or meaning of any provisions of this Agreement.
(g) Except as otherwise specified herein, all references herein (i)
to any Person shall be deemed to include such Person's successors and assigns,
(ii) to any Requirement of Law defined or referred to herein shall be deemed
references to such Requirement of Law or any successor Requirement of Law
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as the same may have been or may be amended or supplemented from time to time,
and (iii) to any Loan Document or other document or agreement defined or
referred to herein shall be deemed to refer to such Loan Document or other
document or agreement (and, in the case of any Note or any other instrument, any
instrument issued in substitution therefor) as the terms thereof may have been
or may be amended, supplemented, waived or otherwise modified from time to time.
(h) Unless otherwise specified, all references to times of day shall
be to New York, New York times.
(i) Unless otherwise specified, the term "including", whenever used
in this Agreement or any other Loan Document, shall be deemed to mean "including
without limitation".
(j) Unless otherwise specified, all references to fiscal years and
fiscal quarters shall be to fiscal years and fiscal quarters of the Parent
Guarantor and the Borrowers.
(k) Each authorization in favor of the Administrative Agent, the
Issuing Bank or any Lender granted by or pursuant to this Agreement shall be
deemed to be irrevocable and coupled with an interest.
ARTICLE 2
THE CREDIT FACILITY
2.1 The Loans.
(a) Subject to the terms and conditions hereof, each Lender
severally agrees to make revolving credit loans (each, a "LOAN" and,
collectively, the "LOANS") to the Borrowers on a joint and several basis from
time to time during the Commitment Period in an aggregate principal amount at
any one time outstanding not exceeding such Lender's Commitment; provided,
however, that no Loan shall be made by any Lender hereunder if, after giving
effect thereto, (i) such Lender's Exposure would exceed such Lender's Commitment
or (ii) the Aggregate Exposure would exceed the Aggregate Commitments or (iii)
except as specified in Section 2.14, the Aggregate Exposure would exceed the
Borrowing Base then in effect.
(b) Subject to the terms and conditions of this Agreement, during
the Commitment Period the Borrowers may borrow from the Lenders pursuant to this
Article 2, repay or prepay pursuant to Section 2.8 (subject to the provisions of
Section 3.5) and reborrow pursuant to this Article 2 up to the amount of the
Aggregate Commitments then in effect by means of Base Rate Loans or LIBOR Loans;
provided that no Loan shall be made hereunder as a LIBOR Loan after the day that
is one month prior to the Commitment Termination Date.
2.2 Procedure for Borrowing.
(a) Any Borrower may borrow hereunder during the Commitment Period
on any Business Day, provided that such Borrower or Sanyo on its behalf shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent (i) prior to 12:00 noon on the requested
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Borrowing Date with respect to Base Rate Loans and (ii) prior to 12:00 noon on
the date three Business Days prior to the requested Borrowing Date with respect
to LIBOR Loans), which notice shall be substantially in the form of Exhibit B-1
and shall be duly completed by such Borrower or Sanyo (each, a "Notice of
Borrowing"). Each Notice of Borrowing given to the Administrative Agent by any
Borrower or by Sanyo on behalf of any Borrower shall be deemed given by all the
Borrowers jointly and severally. Each Borrowing consisting of LIBOR Loans shall
be in an amount equal to $1,000,000 or any greater amount that is a whole
multiple of $100,000 and, except for Borrowings under Section 2.2(b), each
Borrowing consisting of Base Rate Loans shall be in an amount equal to $25,000
or any greater amount that is a whole multiple of $10,000 (or, if the Aggregate
Commitments on the requested Borrowing Date are less than $25,000 or a whole
multiple of $10,000, such lesser amount). If the Type of the requested Loans is
not specified in a Notice of Borrowing, then such Loans shall be made as Base
Rate Loans. If no Interest Period is specified with respect to any requested
LIBOR Loans in a Notice of Borrowing, then the relevant Borrower shall be deemed
to have selected an Interest Period of one month's duration. Upon receipt of any
such notice from a Borrower or the Parent Guarantor, the Administrative Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its Percentage of each Borrowing available to the Administrative Agent for the
account of the relevant Borrower in Dollars and in immediately available funds
at the office of the Administrative Agent at 125 West 55th Street, New York, New
York 10019, prior to 1:00 p.m. on the requested Borrowing Date. The
Administrative Agent shall make the amounts received by it from the Lenders
available to the relevant Borrower on the requested Borrowing Date by crediting
such amounts to the account maintained by such Borrower with the Administrative
Agent.
(b) Each authorization given by a Borrower to the Documentary
Collection Agent, with notice of such authorization being simultaneously given
to the Administrative Agent, to pay a draft presented to it by a supplier of
such Borrower relating to a shipment of Inventory to such Borrower shall
constitute delivery by such Borrower of a request for a Borrowing of Base Rate
Loans in an aggregate principal amount equal to the amount of such draft to be
made on the date on which such draft is payable. If the making of such Base Rate
Loan would cause the Aggregate Exposure to exceed the lesser of the Aggregate
Commitments or the Borrowing Base then in effect, then the Documentary
Collection Agent is authorized, in its sole discretion, to debit the Borrower's
account in the amount of such draft. Nothing contained in this Agreement shall
be deemed to require the Documentary Collection Agent to extend any credit to
the Borrower in connection with the performance of documentary collection
services, whether by means of overdrafts or otherwise (other than in its
capacity as a Lender hereunder), and the Documentary Collection Agent shall not
extend any such credit without the prior written consent of all the Lenders.
2.3 Extension of Commitment Period.
The Commitment Period may be extended by the Lenders, in their sole
discretion, at the request of the Borrowers, for one or more additional
twelve-month periods in accordance with the provisions of this Section 2.3. If
the Borrowers wishes to extend the Commitment Period for an additional 12-month
period, they shall deliver to the Administration Agent a written request for
such extension substantially in the form of Exhibit B-3 (an "Extension Request")
at least 90 days prior to the Commitment Termination Date then in effect. If all
the Lenders consent in writing to such extension within 30 days after receipt of
an Extension Request, then the Commitment Period shall be extended for an
additional twelve-month period beyond the Commitment Termination Date then in
effect. If any Bank fails to affirmatively indicate its consent to such
extension in writing within such 30-day period, it shall be deemed not to have
consented to such extension. No Bank shall have any obligation whatsoever to
consent to any extension of the
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Commitment Period and it may withhold its consent in its sole and absolute
discretion. In no event shall the Commitment Period be extended unless all the
Lenders affirmatively indicate their consents thereto in writing in accordance
with this Section 2.3.
2.4 Procedure for Conversion and Continuation.
(a) Each Borrower may elect from time to time to convert outstanding
Loans from one Type to another by giving, or causing the Parent Guarantor to
give, to the Administrative Agent irrevocable written notice of such election
(i) at least one Business Day prior to the proposed conversion date, in the case
of conversion of Loans of another Type into Base Rate Loans and (ii) at least
three Business Days prior to the proposed conversion date, in the case of
conversion of Loans of another Type into LIBOR Loans, which notice shall be
substantially in the form of Exhibit B-2 and shall be duly completed (each, a
"Notice of Conversion or Continuation"); provided, however, that any conversion
of LIBOR Loans into Loans of another Type may only be made on the last day of an
Interest Period with respect thereto. Any such notice of conversion to LIBOR
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. If such notice fails to specify the length of the initial
Interest Period or Interest Periods therefor, then the relevant Borrower shall
be deemed to have selected an Interest Period of one month's duration. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. All or any part of any outstanding Loan may be converted as
provided herein, provided that (i) no Loan may be converted into a LIBOR Loan
when any Event of Default has occurred and is continuing and the Administrative
Agent has notified the Borrowers that such conversion option is no longer
available, (ii) no Loan may be converted into a LIBOR Loan after the date that
is one month prior to the Commitment Termination Date, and (iii) after giving
effect to such conversion, the Borrowers shall be in compliance with the minimum
borrowing amounts specified in Section 2.2.
(b) Any LIBOR Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the giving (either by
the relevant Borrower or by the Parent Guarantor on its behalf) of a Notice of
Conversion or Continuation to the Administrative Agent, specifying the length of
the next Interest Period to be applicable to such LIBOR Loan, determined in
accordance with the applicable provisions of the definition of the term
"Interest Period" set forth in Section 1.1; provided, however, that no LIBOR
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has notified the Borrowers that such
continuation option is no longer available or (ii) after the date that is one
month prior to the Commitment Termination Date; and provided further, that if
the relevant Borrower (or the Parent Guarantor on its behalf) shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso, such LIBOR Loan shall be
automatically converted to a Base Rate Loan on the last day of the then expiring
Interest Period.
(c) All borrowings, conversions and continuations of Loans hereunder
and all selections of Interest Periods hereunder shall be in such amounts and
shall be made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of LIBOR Loans having Interest Periods of the
same length ending on the same day shall be equal to or greater than $1,000,000
and shall be a whole multiple of $100,000 and there shall not be more than four
(4) Interest Periods in effect at any one time.
2.5 Termination or Reduction of Commitments.
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(a) The Borrowers shall have the right, upon not less than five
Business Days' notice to the Administrative Agent signed by all the Borrowers,
to terminate the Aggregate Commitments or, from time to time, to reduce the
amount of the unused Aggregate Commitments. Any such partial reduction shall be
in an aggregate amount equal to $1,000,000 or a whole multiple thereof and shall
reduce permanently the Aggregate Commitments then in effect. If the Aggregate
Exposure on the effective date of any such reduction exceeds the amount of the
Aggregate Commitments after giving effect to such reduction, the Borrowers shall
prepay the Loans and Cash Collateralize the Letters of Credit on the date on
which such reduction becomes effective, by a total amount equal to the amount of
such excess. Any such termination of the Aggregate Commitments shall be
accompanied by prepayment in full of the Loans and full Cash Collateralization
of the Letters of Credit then outstanding.
(b) Interest accrued on the amount of any partial prepayment
pursuant to this Section 2.5 to the date of such partial prepayment shall be
paid on the date of such partial prepayment. In the case of the termination of
the Aggregate Commitments, interest accrued on the amount of the prepayment
relating thereto shall be paid by the Borrowers on the date of such termination.
Prepayments made pursuant to this Section 2.5 shall be accompanied by amounts
payable pursuant to Section 3.5, if any, that are attributable to such
prepayments.
2.6 Repayment of Loans.
The Borrowers hereby jointly, severally and unconditionally promise
to repay to each Lender in full on the Commitment Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 2.5
or 7.1) the principal amount of all Loans of such Lender that are then
outstanding.
2.7 Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its normal
practice an account or accounts setting forth the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
The entries made in such accounts shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations of
the Borrowers therein recorded, provided, that the failure of any Lender to
maintain any such account, or any error therein, shall not in any manner affect
the obligation of the Borrowers to repay the Loans made to any Borrower by such
Lender, together with accrued interest thereon, in accordance with the terms of
this Agreement.
(b) The joint and several obligations of the Borrowers to repay the
principal amount of each Lender's Loans and to pay interest thereon as provided
in this Agreement shall be evidenced by promissory notes substantially in the
form of Exhibit A (each, a "Note" and, collectively, the "Notes").
2.8 Optional and Mandatory Prepayments.
(a) The Borrowers may at any time prepay the Loans, in whole or in
part, without premium or penalty, upon at least one Business Day's irrevocable
notice to the Administrative Agent, specifying the date and amount of
prepayment. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest on the amount prepaid and any
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amounts payable pursuant to Section 3.5. Optional partial prepayments shall be
in an aggregate principal amount equal to $10,000 or a whole multiple thereof.
(b) If (i) the Aggregate Exposure exceeds the Borrowing Base then in
effect at any time and the Administrative Agent so requests or (ii) the
Aggregate Exposure exceeds the Aggregate Commitments at any time, whether or not
the Administrative Agent so requests, the Borrowers shall immediately prepay any
outstanding Loans and Cash Collateralize any outstanding Letters of Credit, to
the extent necessary to eliminate such excess. Any prepayment hereunder shall be
accompanied by accrued interest on the amount prepaid and any amounts payable
pursuant to Section 3.5.
(c) On the earlier of (i) ninety (90) days after the death of Mr.
Joseph Ende or (ii) the receipt by the Administrative Agent of the proceeds of
the Key Man Policy, the Borrowers shall prepay the Loans and Cash Collateralize
the Letters of Credit in an aggregate amount equal to the proceeds of the Key
Man Policy. If the proceeds of the Key Man Policy actually received by the
Administrative Agent exceed the outstanding amount of the Obligations, the
Administrative Agent shall, after the payment in full of the Obligations [AND
TERMINATION OF THE COMMITMENTS], remit the excess to the Borrowers or as
directed by a court of competent jurisdiction.
(d) Any prepayment under this Section 2.8 shall be applied, first,
to outstanding Base Rate Loans and LIBOR Loans with Interest Periods ending on
the day of such prepayment, if any, and thereafter to any other LIBOR Loans then
outstanding.
2.9 Interest Rates and Payment Dates.
(a) Each Base Rate Loan shall bear interest for each day it is
outstanding at a rate per annum equal to the Base Rate in effect on such day.
(b) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBO Rate
applicable to such Interest Period, plus two and one-quarter percent (2.25%).
(c) Notwithstanding the foregoing, the unpaid principal amount of
each Loan shall bear interest from and after the occurrence of any Event of
Default and until such Event of Default is cured or waived, and any interest,
fee or other amount payable hereunder or under any other Loan Document that is
not paid when due shall bear interest from its due date until it is paid in
full, in each case after as well as before judgment, at a rate per annum equal
to Post-Default Rate.
(d) Interest (i) on each Base Rate Loan shall be payable monthly in
arrears on the first Business Day of each calendar month, on the Commitment
Termination Date, and on any earlier repayment or conversion of such Loan and
(ii) on each LIBOR Loan shall be payable in arrears on the last day of each
Interest Period applicable thereto; provided that interest accruing pursuant to
paragraph (c) of this Section 2.9 shall be payable from time to time on demand.
(e) It is the intention of the parties hereto to comply strictly
with applicable usury laws; accordingly, it is stipulated and agreed that the
aggregate of all amounts which constitute interest under applicable usury laws,
whether contracted for, charged, taken, reserved, or received, in connection
with
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the Indebtedness evidenced by this Agreement or any other Loan Document shall
never exceed under any circumstance whatsoever the maximum amount of interest
allowed by applicable usury laws.
2.10 The Letters of Credit.
(a) Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, the Issuing Bank agrees, at any
time and from time to time on or after the Effective Date until the earlier of
(i) the tenth Business Day preceding the Commitment Termination Date and (ii)
the termination of the Commitments in accordance with the terms hereof, to issue
documentary letters of credit (each, a "Letter of Credit" and collectively the
"Letters of Credit") for account of the Borrowers; provided, however, that no
Letter of Credit shall be issued if, after giving effect thereto:
(x) the Aggregate LC Exposure would exceed One Million Dollars
($1,000,000); or
(y) the Aggregate Exposure would exceed the Aggregate Commitments;
or
(z) except as provided in Section 2.14, the Aggregate Exposure would
exceed the Borrowing Base then in effect.
Each Letter of Credit (i) shall be in a form satisfactory to the Issuing Bank
and (ii) shall permit drawings upon the presentation of such documents as shall
be specified by the Borrowers in the LC Application delivered pursuant to
paragraph (c) of this Section 2.10.
(b) Each Letter of Credit shall by its terms expire no later than
the earlier to occur of (i) 360 days after the issuance thereof or (ii) the last
Business Day prior to the Commitment Termination Date. Any Letter of Credit may
provide for the renewal thereof for additional periods (which shall in no event
extend beyond the date referred to in clause (ii) of the preceding sentence).
Each Letter of Credit shall by its terms provide for payment of drawings in
Dollars.
(c) The Borrowers shall request the issuance of a Letter of Credit
by submitting to the Issuing Bank, at its address specified in Schedule II, a
properly completed and duly executed counterpart of the Issuing Bank's standard
letter of credit application (an "LC Application") no later than 12:00 noon,
three (3) Business Days (or such shorter period as shall be acceptable to the
Issuing Bank) prior to the proposed issuance of the requested Letter of Credit.
Each LC Application shall refer to this Agreement, shall specify (i) the date on
which such Letter of Credit is to be issued (which shall be a Business Day) and
the face amount of such Letter of Credit, (ii) the name and address of the
beneficiary of such Letter of Credit, (iii) whether such Letter of Credit shall
permit a single drawing or multiple drawings, (iv) the form of the documents
required to be presented at the time of any drawing (together with the exact
wording of such documents or copies thereof), and (v) the expiry date of such
Letter of Credit (which shall conform to the provisions of paragraph (b) of this
Section 2.10), and shall be accompanied by such certificates, documents, and
other papers and information as the Issuing Bank may reasonably request. The
Administrative Agent shall give to each Lender prompt written or telecopy advice
of the issuance of any Letter of Credit. The Borrowers hereby agree to observe
and perform all of its covenants, duties and obligations under each LC
Application.
(d) By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the Lenders in respect thereof, the
Issuing Bank hereby grants to each Lender, and each
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Lender hereby acquires from the Issuing Bank, effective upon the issuance of
such Letter of Credit, a participation in such Letter of Credit equal to such
Lender's Percentage at the time of any drawing thereunder of the stated amount
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, in accordance with
paragraph (g) of this Section 2.10, such Lender's Percentage of each LC
Disbursement under a Letter of Credit that is not paid or reimbursed by the
Borrowers by 10:00 a.m. on the date such LC Disbursement is made by the Issuing
Bank; provided, however, that the Lenders shall not be obligated to make any
such payment with respect to any payment or disbursement made under any Letter
of Credit to the extent resulting from the gross negligence or wilful misconduct
of the Issuing Bank, as finally determined by a court of competent jurisdiction.
(e) Each Lender acknowledges and agrees that its acquisition of
participations pursuant to paragraph (d) of this Section 2.10 in respect of
Letters of Credit and its obligation to make the payments specified in paragraph
(f) of this Section 2.10 in respect thereof shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(i) any setoff, counterclaim, recoupment, defense or other right which such
Lender or the Borrowers may have against the Issuing Bank, the Borrowers or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the conditions
specified in Article 5; (iii) any adverse change in the condition (financial or
otherwise) of any Obligor; (iv) any breach of this Agreement or any other Loan
Document by any Obligor or any Lender; or (v) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
(f) On the date on which it shall have ascertained that any
documents presented under a Letter of Credit appear to be in conformity with the
terms and conditions of such Letter of Credit, the Issuing Bank shall give
written or telecopied notice to the Borrowers and the Administrative Agent of
the amount of the drawing and the date on which payment thereon has been or will
be made (the "Drawing Date"). If the Issuing Bank shall not have received from
the Borrowers the payment required pursuant to paragraph (g) of this Section
2.10 by 10:00 a.m. on the relevant Drawing Date, the Issuing Bank shall so
notify the Administrative Agent, which shall in turn promptly notify each
Lender, specifying in the notice to each Lender such Lender's Percentage of the
amount paid or to be paid by the Issuing Bank under such Letter of Credit. Each
Lender shall pay to the Administrative Agent, not later than 12:00 noon on the
relevant Drawing Date, such Lender's Percentage of the payment made or to be
made by the Issuing Bank under such Letter of Credit, which the Administrative
Agent shall promptly pay to the Issuing Bank. The amount paid by each Lender
pursuant to the preceding sentence shall be deemed to constitute a Base Rate
Loan of such Lender and such payment shall be deemed to have increased the
outstanding principal amount of such Lender's Loans and reduced such Lender's
L/C Exposure. In the event that any Lender fails to pay its Percentage of such
amount when due in accordance with the preceding sentence, such Lender shall pay
such amount to the Administrative Agent for the account of the Issuing Bank on
demand, together with interest thereon at the rates specified in Section
2.13(c). Promptly upon its receipt from the Borrowers of any payment in respect
of a drawing under a Letter of Credit with respect to which the Lenders have
reimbursed the Issuing Bank pursuant to this paragraph (f), the Administrative
Agent will remit to each Lender such Lender's Percentage of such payment;
provided that (i) amounts so received for the account of any Lender prior to
payment by such Lender of amounts required to be paid by it hereunder in respect
of any drawing under a Letter of Credit and (ii) amounts representing interest
at the rate provided in paragraph (g) of this Section 2.10 on any payment made
by the Issuing Bank under a Letter of Credit for the period prior to the payment
by such Lender of such amounts shall in each case be remitted to the Issuing
Bank.
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(g) If any draft shall be presented to the Issuing Bank under a
Letter of Credit, the Borrowers shall pay to the Issuing Bank an amount equal to
the amount of such draft before 10:00 a.m. on the date the Issuing Bank proposes
to pay such draft. If such payment is not made when due, it shall bear interest
at a rate per annum equal to the interest rate applicable to Base Rate Loans
from (and including) the date of payment of such draft by the Issuing Bank to
(but excluding) the date on which the Borrowers shall have reimbursed the
Issuing Bank in full for such payment and shall be payable, together with
accrued interest, on demand. Each payment made to the Issuing Bank by the
Borrowers pursuant to this paragraph (g) shall be made at the Issuing Bank's
address specified in Schedule II (or such other address as the Issuing Bank may
specify in writing from time to time) in lawful money of the United States of
America and in immediately available funds. The obligation of the Borrowers to
pay the amounts referred to above in this paragraph (g) (and the obligations of
the Lenders under paragraphs (d) and (f) of this Section 2.10) shall be
absolute, unconditional and irrevocable and shall be satisfied strictly in
accordance with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or LC Application or of the obligations of the Borrowers under this
Agreement or any other Loan Document or any amendment or waiver
thereof, or consent to departure therefrom;
(ii) the existence of any claim, setoff, defense or other right
which the Borrowers or any other Person may at any time have against
the beneficiary under any Letter of Credit, the Administrative
Agent, the Issuing Bank or any Lender (other than the defense of
payment in accordance with the terms of this Agreement or a defense
based on the gross negligence or wilful misconduct of the Issuing
Bank, as finally determined by a court of competent jurisdiction) or
any other Person in connection with this Agreement or any other
transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
provided that payment by the Issuing Bank under such Letter of
Credit against presentation of such draft or document shall not have
constituted gross negligence or wilful misconduct, as finally
determined by a court of competent jurisdiction;
(iv) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document which does not comply in
any respect with the terms of such Letter of Credit;
(v) any exchange or release of any collateral or of any security
interest therein, any failure to perfect a security interest in any
collateral, or any release of any guarantor;
(vi) any irregularity in the transactions with respect to which any
Letter of Credit is issued, including, without limitation, any fraud
by any beneficiary thereunder;
(vii) consequences of compliance with laws, orders, regulations or
customs in effect in places of negotiation or payment of drafts
drawn under any Letter of Credit;
(viii) failure of drafts to bear reference or adequate reference to
any Letter of Credit, or failure of documents to accompany drafts at
negotiation, or failure of any Person to surrender or take up any
Letter of Credit, or failure of any Person to note the amount of any
draft presented under any Letter of Credit or forward documents
apart from drafts as may be required by the terms
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of any Letter of Credit (each of which requirements the Borrowers
hereby waive, to the extent permitted under the UCP, even if
included in any Letter of Credit);
(ix) errors, omissions, interruptions or delays in transmission or
delivery of any messages, however sent and whether plain or in code
or cipher, or errors in translation or in interpretation of
technical or other terms; or
(v) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing.
It is understood that in making any payment under a Letter of Credit
(x) the Issuing Bank's exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary thereof equals the amount of
such draft and whether or not any document presented pursuant to such Letter of
Credit proves to be forged, fraudulent or invalid in any respect, if such
document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (y) any noncompliance in any immaterial
respect of the documents presented under a Letter of Credit with the terms
thereof shall, in either case, not, in and of itself, be deemed wilful
misconduct or gross negligence of the Issuing Bank.
(h) The Issuing Bank shall examine documents delivered under each
Letter of Credit so as to ascertain that said documents on their face appear to
comply with the terms of such Letter of Credit, but the Issuing Bank shall have
no liability or responsibility (i) for the genuineness or authenticity of any
document which appears on such examination to be regular on its face; (ii) for
honoring a draft or demand for payment after notification from a Borrower of
fraud, forgery or other defect not apparent on the face of the documents; (iii)
for the ultimate correctness of the Issuing Bank's decision regarding
documentary compliance where its decision is based on its examination of the
documents pursuant to its normal examination procedures or in a manner not
unreasonable or where the Issuing Bank's decision is based on its exercise of
judgment and that judgment is not unreasonable. Each Borrower hereby waives any
right it may have to bring any action against the Issuing Bank based on fraud,
forgery or other defects (which are not the result of the Issuing Bank's gross
negligence or wilful misconduct, as finally determined by a court of competent
jurisdiction) not apparent on the face of the documents presented under any
Letter of Credit. For the purpose of determining whether the Issuing Bank has
met its obligations to the Borrower to examine documents delivered under each
Letter of Credit, documents which substantially or otherwise reasonably comply
with the terms of the relevant Letter of Credit may be accepted, and the tests
of literal or strict construction as regards acceptability of documents shall
not be applied in any dispute which may develop between the Issuing Bank and any
Borrower.
(i) Each Borrower hereby agrees that: (i) the Issuing Bank may
accept or pay, as complying with the terms of a Letter of Credit, any drafts or
other documents otherwise in order which may be signed or issued by a trustee in
bankruptcy, debtor in possession, assignee for benefit of creditors, liquidator,
receiver, successor or other legal representative of the party who is authorized
under such Letter of Credit to draw or issue any drafts or other documents; and
(ii) to the extent not inconsistent with the express terms of the relevant
Letter of Credit, the Issuing Bank and any of its correspondents may, without
limiting any other provisions of this Agreement, accept documents of any
character which comply with the provisions, definitions, interpretations and
practices contained in The Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 (the
"UCP"), and
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accept or pay any draft dated on or before the expiration of any time limit
expressed in such Letter of Credit, regardless of when drawn and when or whether
negotiated, provided the other required documents are dated prior to the
expiration date of such Letter of Credit.
(j) In case of any variation between the documents called for by any
Letter of Credit or any Borrower's instructions and documents accepted by the
Issuing Bank, the Borrowers shall be conclusively deemed to have waived any
right to object to such variation with respect to any action of the Issuing Bank
relating to such documents, and to have ratified and approved such action as
having been taken at the Borrowers' direction, unless reasonably promptly
following receipt of such documents or acquisition of knowledge of such
variation the Borrowers file an objection with the Issuing Bank in writing.
2.11 Documentary Collections. The Borrowers have requested that Bank
Leumi continue to provide documentary collection services in accordance with
past practice, and Bank Leumi hereby agrees to do so, subject to the terms and
conditions of this Agreement. Documentary collection services which will be
provided by Bank Leumi to the Borrowers from time to time hereunder shall
consist of receipt of drafts and shipping documents relating to Inventory
purchased by one or more Borrowers, notification to the relevant Borrower of
such receipt, and payment of such drafts out of such Borrower's funds following
approval by such Borrower of the relevant draft and related shipping documents.
Such documentary collection services shall continue to be provided by Bank Leumi
in accordance with its internal procedures (which are subject to change at any
time without prior notification to any Borrower) but shall in no event require
Bank Leumi to make any determinations with respect to any documents presented to
it in connection such documentary collections or extend any credit to any
Borrower other than pursuant to this Agreement. Bank Leumi, in its capacity as
documentary collection agent under this Section 2.11, shall be referred to
herein as the "Documentary Collection Agent".
2.12 Fees.
(a) The Borrowers hereby jointly and severally agree to pay to each
Lender for its own account, on or before the Effective Date, as consideration
for such Lender's execution and delivery of this Agreement, closing fees in the
amounts separately agreed upon by the Borrowers and such Lender (collectively,
the "Closing Fees").
(b) The Borrowers hereby jointly and severally agree to pay to the
Issuing Bank for the ratable account of the Lenders in respect of each Letter of
Credit a fee (the "Letter of Credit Fee") equal to one-quarter of one percent
(1/4%) of the original stated amount of such Letter of Credit. The Letter of
Credit Fee payable with respect to each Letter of Credit shall be paid on the
date of issuance of such Letter of Credit.
(c) The Borrowers hereby jointly and severally agree to pay to the
Issuing Bank for its own account, in respect of each Letter of Credit, the
customary administration, issuance, amendment, transfer, drawing and negotiation
fees and charges (the "Customary Charges") charged by the Issuing Bank from time
to time in connection with letters of credit. The Customary Charges shall be
paid by the Borrowers promptly upon request therefor by the Issuing Bank.
(d) The Borrowers hereby jointly and severally agree to pay to the
Documentary Collection Agent for its own account, as consideration for the
services specified in Section 2.11, a fee (the "Documentary Collection Fee") at
the rate specified from time to time on the applicable schedule of fees
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of the Documentary Collection Agent (which schedule shall be subject to change
from time to time at the discretion of the Documentary Collection Agent without
prior notice to the Parent Guarantor or any Borrower). The Documentary
Collection Fee with respect to any shipment of Inventory shall be paid
concurrently with payment of the purchase price for such shipment.
(e) The Borrowers hereby jointly and severally agree to pay to the
Administrative Agent for the ratable account of the Lenders, with respect to
each amendment, waiver or other modification to this Agreement or any other Loan
Document that is executed by the Lenders at the request of the Parent Guarantor
or any of the Borrowers, a fee (the "Modification Fee") of $3,000. The
Modification Fee payable with respect to any amendment, waiver or other
modification shall be paid prior to the effectiveness of such amendment, waiver
or modification and shall constitute a condition precedent thereto.
(f) The Borrowers hereby jointly and severally agree that if any
Overadvance exists hereunder at any time, they shall pay to the Administrative
Agent for the ratable account of the Lenders a fee on the Aggregate Exposure
(including the amount of any Overadvance) calculated at the rate of one percent
(1%) per annum. The Overadvance Fee shall be payable immediately upon demand by
the Administrative Agent.
2.13 Computation of Interest and Fees.
(a) Interest and Fees shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. Any change in the interest rate on a
Loan resulting from a change in the NBC Base Rate shall become effective as of
the opening of business on the day on which such change becomes effective. The
Administrative Agent shall notify the Borrowers and the Lenders as soon as
practicable of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error.
2.14 Pro Rata Treatment and Payments.
(a) Each Borrowing, each payment received by the Administrative
Agent on account of the Letter of Credit Fees, and any reduction in the
Commitments, shall be allocated by the Administrative Agent to the Lenders pro
rata according to their respective Percentages. Each payment and prepayment by
the Borrowers on account of principal of or interest on the Loans, each
continuation of Loans of a particular Type, and each conversion of Loans from
one Type to another (other than conversions pursuant to Section 3.2 or 3.3)
shall be made pro rata and shall be allocated by the Administrative Agent among
the Lenders according to the respective outstanding principal amounts of their
Loans. All payments and prepayments to be made by the Borrowers hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without set-off or counterclaim and shall be made prior to 12:00 noon (or, in
the case of payments under Section 2.10(g), prior to 10:00 a.m.) on the due date
thereof to the Administrative Agent, for the account of the Lenders, the Issuing
Bank or the Administrative Agent, as appropriate, by a transfer in Dollars and
in immediately available funds to the office of the Administrative Agent at 125
West 55th Street, New York, New York 10019, or at such other office of the
Administrative Agent or any affiliate thereof as the Administrative Agent may
specify from time to time. The Administrative Agent shall distribute any such
payments received by it for the account of the Lenders or the Issuing Bank to
the
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Lenders or the Issuing Bank, as appropriate, promptly upon its receipt thereof
in like funds as received. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment due date shall be extended to the
next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
(b) The Administrative Agent is hereby authorized (but not required)
to debit any Borrower's deposit accounts with the Administrative Agent for any
amount owing to the Lenders, the Issuing Bank or the Administrative Agent
hereunder or under any other Loan Document (including any amount owing in
respect of principal, interest or fees). The rights of the Administrative Agent
under this Section 2.13(b) are in addition to and not in lieu of the rights of
set-off under Section 9.7 and under applicable law.
(c) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to any Borrowing Date or any Drawing Date that such
Lender will not make its Percentage of the relevant Borrowing or LC Disbursement
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers or the Issuing Bank, as the case may be, a corresponding amount.
If such amount is not made available to the Administrative Agent by the required
time on the relevant Borrowing Date or Drawing Date, such Lender shall pay to
the Administrative Agent, on demand, such amount with interest thereon at a rate
per annum equal to (i) the Federal Funds Effective Rate for the first three days
following the relevant Borrowing Date or Drawing Date and (ii) the Base Rate
thereafter, until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this Section shall be conclusive
in the absence of manifest error. If any Lender's Percentage of any Borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of the Borrowing Date for such Borrowing, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
or rates per annum applicable to such Borrowing hereunder, on demand, from the
Borrowers if and to the extent that the Administrative Agent has made such
amount available to the Borrowers (without prejudice to any rights the Borrowers
may have against such Lender).
2.15 Overadvances.
(a) The Lenders and the Issuing Bank may, from time to time, in
their sole and absolute discretion, but shall have no obligation to, make Loans
or issue Letters of Credit, or permit Loans or Letters of Credit to remain
outstanding, even though such Loans or Letters of Credit cause the Aggregate
Exposure to exceed the Borrowing Base then in effect (the amount of such excess
herein called an "Overadvance").
(b) In the event of an Overadvance, the Borrowers shall prepay the
Loans and/or Cash Collateralize the Letters of Credit immediately upon demand by
the Administrative Agent to the extent necessary to eliminate such Overadvance.
2.16 Obligations of Lenders.
The Lenders' obligations to make Loans and participate in
Letters of Credit hereunder shall be several and not joint. No Lender shall be
responsible for the obligations of any other Lender and no Lender shall be
liable for any failure by any other Lender to perform any of its obligations
hereunder
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or under any other Loan Document. The failure by any Lender to perform any of
its obligations hereunder or under any other Loan Document shall not relieve any
other Lender from any of its obligations hereunder or under any other Loan
Document.
ARTICLE 3
YIELD PROTECTION AND ILLEGALITY; TAXES.
3.1 Inability to Determine Interest Rate.
If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBO
Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Lenders that the LIBO Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their
Loans during such Interest Period as LIBOR Loans,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter. If such notice is
given, any Affected LIBOR Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Affected LIBOR Loans shall be
made, nor shall the Borrowers have the right to request any Affected LIBOR
Loans.
3.2 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after the date hereof shall make it unlawful for
any Lender to make or maintain LIBOR Loans as contemplated by this Agreement,
(a) such Lender shall promptly give written notice of such circumstances to the
Borrowers and the Administrative Agent (which notice shall be withdrawn whenever
such circumstances no longer exist), (b) the obligation of such Lender hereunder
to make any Affected LIBOR Loans shall forthwith be canceled and, until such
time as it shall no longer be unlawful for such Lender to make and maintain
Affected LIBOR Loans, such Lender shall have no obligation to make or maintain
Affected LIBOR Loans, and (c) any Affected LIBOR Loans of such Lender then
outstanding shall be converted automatically to LIBOR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of an
Affected LIBOR Loan of a Lender occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
the Administrative Agent for the account of such Lender such amounts, if any, as
may be required pursuant to Section 3.5.
3.3 Additional Costs; Capital Adequacy.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof applicable to any Creditor, or
compliance by any Creditor with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority, in each
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case made subsequent to the date hereof (or, if later, the date on which such
Creditor becomes a Creditor hereunder):
(i) shall subject such Creditor to any tax of any kind whatsoever
with respect to any Letter of Credit issued or maintained by it, any
LIBOR Loan made or maintained by it, or its obligation to issue or
participate in Letters of Credit or make LIBOR Loans, or change the
basis of taxation of payments to such Creditor in respect thereof
(except for Taxes covered by Section 3.4 and changes in taxes
measured by or imposed upon the overall net income, or franchise
taxes (imposed in lieu of such net income tax), of such Creditor or
its applicable lending office, branch, or any affiliate thereof);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of,
advances, loans, letters of credit or other extensions of credit by,
or any other acquisition of funds by, any office of such Creditor,
which requirement is not otherwise included in the determination of
the LIBO Rate hereunder; or
(iii) shall impose on such Creditor any other condition;
and the result of any of the foregoing is to increase the cost to such Creditor
of issuing, maintaining or participating in Letters of Credit or of making or
maintaining LIBOR Loans or to reduce any amount receivable hereunder in respect
thereof or of its Revolving Commitment hereunder, then from time to time, within
2 Business Days after submission by such Creditor to the Borrowers (with a copy
to the Administrative Agent) of a written request therefor, the Borrowers shall
pay to such Creditor (i) any additional amounts necessary to compensate such
Creditor for such increased cost or reduced amount receivable attributable to
its issuance, maintenance or participation in any Letters of Credit or its
making or maintaining any LIBOR Loans, and such additional amount or amounts as
will compensate such Creditor for such increased cost or reduced amounts
receivable attributable to this Agreement, such Creditor's obligation to issue,
maintain or participate in Letters of Credit, such Creditor's Commitment and the
credit facilities provided hereunder; provided that, in any such case, if the
compensation required to by provided by it hereunder relates to a LIBOR Loan,
the Borrowers may elect to convert the Affected LIBOR Loans made by the relevant
Lender to it hereunder to Base Rate Loans by giving the Administrative Agent at
least one Business Day's notice of such election, in which case the Borrowers
shall promptly pay to the Administrative Agent for the account of such Lender,
upon demand, without duplication, such amounts, if any, as may be required
pursuant to Section 3.5. If any Creditor becomes entitled to claim any
additional amounts pursuant to this Section 3.3, it shall provide prompt notice
thereof to the Borrowers, through the Administrative Agent. Such notice as to
any additional amounts payable pursuant to this Section 3.3 submitted by such
Creditor, through the Administrative Agent, to the Borrowers shall be conclusive
in the absence of manifest error. This covenant shall survive the termination of
this Agreement and the other Loan Documents and the payment in full of the Notes
and all other amounts payable hereunder.
(b) If any Creditor shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Creditor or any
corporation controlling such Creditor with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case made subsequent to the date hereof (or, if later, the
date on which such Creditor becomes a Creditor hereunder),
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does or shall have the effect of reducing the rate of return on such Creditor's
or such corporation's capital as a consequence of its obligations hereunder to a
level below that which such Creditor or such corporation could have achieved but
for such change or compliance (taking into consideration such Creditor's or such
corporation's policies with respect to capital adequacy), then from time to
time, within 2 Business Days after submission by such Creditor to the Borrowers
(with a copy to the Administrative Agent) of a written request therefor, (i) the
Borrowers shall pay to such Creditor such additional amount or amounts as will
compensate such Creditor for such reduction attributable to its issuance or
maintenance of or participation in the Letters of Credit hereunder, or its
making or maintaining of LIBOR Loans hereunder, and (ii) the Borrowers shall pay
to such Creditor such additional amount or amounts as will compensate such
Creditor or such corporation for such reduction attributable to this Agreement,
its obligation to issue or participate in Letters of Credit hereunder, its
Commitment hereunder and the credit facilities provided hereunder to the
Borrowers.
(c) If any Creditor requests compensation from the Borrowers
pursuant to paragraph (a) or (b) of this Section 3.3, such Creditor will deliver
to the Borrowers a certificate setting forth in reasonable detail the basis and
amount of such request (with a copy to the Administrative Agent) and such
certificate shall be conclusive as to the amount set forth therein, absent
manifest error. In determining such amount, such Creditor may make such
estimates, assumptions, allocations among its assets and liabilities and the
like as it determines in good faith to be appropriate, and the determinations
made by such Creditor on the basis thereof shall be final, binding and
conclusive upon the Borrowers, except, in the case of such determinations, for
manifest errors. The covenants and obligations of the Borrowers set forth in
this Section 3.3 shall survive the termination of this Agreement, the expiration
of the Letters of Credit and the payment of the Loans and all other amounts
payable hereunder.
3.4 Taxes.
(a) Except as provided below in this Section 3.4, all payments made
by the Borrowers under this Agreement and the other Loan Documents shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding, in the
case of the Administrative Agent or any Creditor, net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent
or such Creditor, as the case may be, as a result of a present or former
connection between the jurisdiction of the government or taxing authority
imposing such tax and the Administrative Agent or such Creditor (excluding a
connection arising solely from the Administrative Agent or such Creditor having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document) or any political
subdivision or taxing authority thereof or therein (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any such Taxes are required to be withheld from
any amounts payable to the Administrative Agent or any Creditor hereunder or
under any other Loan Document, the amounts so payable shall be increased to the
extent necessary to yield to the Administrative Agent or such Creditor (after
payment of all Taxes) interest, fees or any other amounts payable hereunder or
under any other Loan Document at the rates or in the amounts specified in this
Agreement or such other Loan Document; provided, however, that the Borrowers
shall be entitled to deduct and withhold Taxes from amounts payable to any
Creditor that is not organized under the laws of the United States of America or
a state thereof (and shall not be required to increase amounts payable hereunder
to gross up for Taxes) if such Creditor fails to comply with the requirements of
paragraph (b) of this Section 3.4. Whenever any Taxes
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are payable by the Borrowers, as promptly as possible thereafter the Borrowers
shall send to the Administrative Agent for its own account or for the account of
such Creditor, as the case may be, a certified copy of an original official
receipt received by the Borrowers showing payment thereof. If the Borrowers
fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Administrative Agent and
each Creditor for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or such Creditor as a result of any such
failure. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) Each Creditor that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) on or before the date of any payment by the Borrowers
under this Agreement or any other Loan Document to such Creditor,
deliver to the Borrowers and the Administrative Agent (A) two duly
completed copies of the United States Internal Revenue Service Form
1001 or 4224, or any successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this
Agreement and its Notes without deduction or withholding of any
United States federal income taxes and (B) an Internal Revenue
Service Form W-8 or W-9, or any successor applicable form, as the
case may be, certifying that it is entitled to an exemption from
United States backup withholding tax; and
(ii) deliver to the Borrowers and the Administrative Agent
two further copies of any such form or certification on or before
the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Borrowers and
the Administrative Agent;
unless in any such case any change in any Requirement of Law has occurred after
the date such Creditor becomes a Creditor hereunder which renders all such forms
inapplicable or which would prevent such Creditor from duly completing and
delivering any such form with respect to it and such Creditor so advises the
Borrowers and the Administrative Agent. Each Person that becomes a Lender or a
Participant pursuant to Section 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms, certifications and statements
required pursuant to this Section, provided that in the case of a Participant
the obligations of such Participant pursuant to this paragraph (b) shall be
determined as if the Participant were a Lender except that such Participant
shall furnish all such required forms, certifications and statements to the
Lender from which the related participation shall have been purchased.
3.5 Indemnity.
The Borrowers jointly and severally agree to indemnify each Lender
against and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by the Borrowers in
making a borrowing of LIBOR Loans, converting any Loans to LIBOR Loans or
continuing any LIBOR Loans as such, after the Borrowers has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrowers in making any payment of a LIBOR Loan after the
Borrowers has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making by the Borrowers of a payment or prepayment of a
LIBOR Loan on a day
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which is not the last day of an Interest Period with respect thereto. Without
limiting the foregoing, such indemnification shall include an amount equal to
(i) the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, converted or continued for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the interest rate applicable to such LIBOR Loans, minus
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the relevant interbank
eurodollar market. This covenant shall survive the termination of this Agreement
and the other Loan Documents, the expiration of the Letters of Credit and the
payment of the Notes and all other amounts payable hereunder.
3.6 Creditors' Obligation to Mitigate.
Each Creditor agrees to use reasonable efforts (including reasonable
efforts to change the booking office for its Loans or the issuing office for the
Letters of Credit) to avoid or minimize any illegality pursuant to Section 3.2
or any amounts which might otherwise be payable pursuant to Sections 3.3 or 3.4;
provided, however, that such efforts shall not (a) cause the imposition on such
Creditor of any additional costs or legal or regulatory burdens deemed by such
Creditor to be material, (b) violate any Requirement of Law applicable to such
Creditor, or (c) violate such Creditor's internal policies.
3.7 Borrowers' Obligations Joint and Several.
The Borrowers' obligations under this Article 3 shall be joint and
several and shall survive the repayment of the Loans and the termination of the
Commitments.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make the Loans, the Issuing Bank to issue
the Letters of Credit, and the Administrative Agent to act as Administrative
Agent hereunder, the Borrowers and the Parent Guarantor hereby represent and
warrant to the Administrative Agent, the Issuing Bank and each Lender that on
the Closing Date, on and at all times after the Effective Date, and on the date
of any Borrowing or issuance of any Letter of Credit hereunder, as applicable:
4.1 Organization, Powers, Compliance.
Each Obligor is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of its properties or the transaction of its business makes such
qualification necessary. Each Obligor has full corporate power and authority to
own the properties and assets it currently owns and to carry on its business as
it is now being conducted. Each Obligor has full corporate power and authority
to execute, deliver and perform this Agreement and the other Loan Documents to
be executed and delivered by it hereunder. No Obligor is in violation of any
Requirement of Law that is applicable to it or any of its properties.
4.2 Capital Stock, Subsidiaries, Fiscal Year.
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(a) The authorized, issued and outstanding shares of Capital Stock
of each Borrower are as set forth in the Disclosure Schedule. All such
outstanding shares have been duly authorized, are validly issued and outstanding
and are fully paid and non-assessable. To the best knowledge of the Parent
Guarantor and the Borrowers, there are no outstanding options or other rights
pertaining to the Capital Stock of any Borrower, other than as set forth in the
Disclosure Schedule. Neither the Parent Guarantor nor any Borrower has any
obligation to repurchase or redeem any shares of its Capital Stock.
(b) The Disclosure Schedule sets forth the names and jurisdictions
of incorporation of, and the ownership interest of the Parent Guarantor and the
Borrowers in, all of the Subsidiaries. On the date hereof the Borrowers have no
Subsidiaries.
(c) The fiscal year of the Parent Guarantor and the Borrowers ends
on December 31 and their fiscal quarters end on March 31, June 30, September 30
and December 31, respectively.
4.3 Authorization, Absence of Conflicts.
The execution, delivery and performance by any Obligor of this
Agreement and the other Loan Documents to be executed and delivered by it
hereunder, the borrowings and the requests for issuance of letters of credit
hereunder, and the creation of security interests in favor of the Administrative
Agent, for the benefit of the Creditors, pursuant to the Security Documents (a)
have been duly authorized by all requisite corporate action of each Obligor, (b)
do not require the consent or approval of any stockholders of any Obligor, and
(c) will not (i) violate any Requirement of Law applicable to any Obligor, (ii)
violate or constitute (with due notice or lapse of time or both) a breach of or
a default under any Contractual Obligation of any Obligor, (iii) result in the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of any Obligor (other than Liens in favor of the Administrative Agent
pursuant to the Security Documents) or (iv) require any authorization, consent,
approval, license, ruling, permit, tariff, rate, certification, exemption, or
filing or registration by or with any Governmental Authority or any consent or
approval of any other Person.
4.4 Binding Obligations.
This Agreement is, and, upon the delivery thereof to the
Administrative Agent, each other Loan Document executed and delivered by an
Obligor will be, legal, valid and binding obligations of such Obligor,
enforceable against such Obligor in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting enforceability
of creditors' rights generally at the time in effect and except as specific
performance and rights of acceleration may be subject to equitable principles of
general applicability.
4.5 Financial Condition and Statements.
The consolidated and consolidating balance sheets of the Parent
Guarantor as at December 31, 1996, and the related consolidated and
consolidating statements of income, retained earnings and cash flows of the
Parent Guarantor for the fiscal year ended on said date, with the opinion
thereon of Deloitte & Touche, and the unaudited consolidated and consolidating
balance sheets of the Parent Guarantor as at March 31, 1997, June 30, 1997, July
31, 1997, and August 31, 1997, and the related consolidated and consolidating
statements of income and cash flows of the Parent Guarantor for the fiscal
periods then ended, heretofore furnished to the Lenders, are complete and
correct and fairly present the consolidated
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and consolidating financial condition of the Parent Guarantor and the Borrowers
as at said dates and the consolidated and consolidating results of their
operations for the fiscal year and fiscal periods ended on said dates (subject,
in the case of the unaudited financial statements, to normal year-end audit
adjustments), all in accordance with GAAP and practices applied on a consistent
basis. On said dates none of the Parent Guarantor, the Borrowers or their
respective Restricted Subsidiaries had any material obligations or liabilities,
direct or contingent (including, without limitation, any liabilities for
Environmental Costs), liabilities for taxes, forward or long-term commitments or
unrealized or anticipated losses from any commitments, except as referred to or
reflected or provided for in said balance sheets as at said dates, and except
for liabilities set forth on the Disclosure Schedule. Since December 31, 1996
(a) there has been no material adverse change in the consolidated financial
condition, operations, business or prospects taken as a whole of the Parent
Guarantor, the Borrowers and their respective consolidated Restricted
Subsidiaries from that set forth in said financial statements as at said date
and (b) there has been no development or event which has had or could reasonably
be expected to have a Material Adverse Effect. As of the Effective Date, after
giving effect to the transactions contemplated hereby, the Parent Guarantor and
each Borrower is Solvent.
4.6 Taxes.
Each Obligor has filed all United States Federal income tax returns
and all other material tax returns which are required to be filed by it and have
paid all taxes due pursuant to such returns or pursuant to any assessment made
against it or any of its assets and all other taxes, fees and other charges
imposed on it by any Governmental Authority, except such taxes, if any, as are
being Properly Contested. The charges, accruals and reserves on the books of
each Obligor in respect of taxes and other governmental charges are, in the
opinion of the Parent Guarantor and the Borrowers, adequate. No tax Liens other
than Permitted Liens have been filed and no claims are being asserted with
respect to any such taxes, fees or other charges. No Obligor is undergoing any
tax audits, other than as specified in the Disclosure Schedule.
4.7 Title to Properties.
Each Obligor owns and has good and marketable title or leasehold
rights to all of its assets, free and clear of any Liens other than Permitted
Liens, and enjoys peaceful and undisturbed possession under all leases necessary
in any material respects for the operation of its assets. No mortgage or
financing statement or other evidence or notice of a security interest covering
all or any part of the assets of any Obligor is on file in any public office,
except such as have been filed in connection with Permitted Liens.
4.8 Proceedings.
Except as set forth in the Disclosure Schedule, there is no action,
suit, proceeding or claim, at law or in equity, by or before any arbitrator,
Governmental Authority or other body (including, without limitation, any
Environmental Proceeding), now pending or, to the knowledge of the Parent
Guarantor or any Borrower, threatened against or affecting any Obligor or any
Obligor's properties, rights or assets, which relates to the transactions
contemplated hereby or by the other Loan Documents or which, if adversely
determined, could have a Material Adverse Effect.
4.9 Labor Disputes; Collective Bargaining Agreements.
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Except as set forth in the Disclosure Schedule, as of the date
hereof (a) there are no collective bargaining agreements or other labor
contracts covering any Obligor; (b) no such collective bargaining agreement or
other labor contract will expire during the term of this Agreement; (c) no union
or other labor organization is seeking to organize, or to be recognized as
bargaining representative for, a bargaining unit of employees of any Obligor;
(d) there is no pending or threatened strike, work stoppage, material unfair
labor practice claim or charge, arbitration or other material labor dispute
against or affecting any Obligor or any Obligor's employees; and (e) there are
no actions, suits, charges, demands, claims, counterclaims or proceedings
pending or, to the knowledge of the Guarantor or any Borrower, threatened
against any Obligor, by or on behalf of, or with, its employees, other than
employee grievances arising in the ordinary course of business which are not, in
the aggregate, material.
4.10 Material Agreements and Licenses.
To the best of their knowledge, the Obligors have all necessary
licenses, permits and approvals (including, without limitation, all necessary
licenses, permits and authorizations relating to Environmental Laws) to own and
operate their respective properties and assets and to carry on their business as
currently conducted, except where the failure to have such license, permit or
authorization would not have a Material Adverse Effect.
4.11 Intangible Assets.
The Obligors possess all necessary patents, know-how, trademarks,
service marks, trade names, and copyrights, and rights with respect to each of
the foregoing, necessary to carry on their business as currently conducted and
the possession and use thereof in its business does not, to the best of the
Guarantor's and the Borrowers' knowledge, conflict with the patents, know-how,
trademarks, service marks, trade names, and copyrights, and rights with respect
to the foregoing, of any other Person, except where such conflict would not have
a Material Adverse Effect.
4.12 Condition of Assets.
All of the assets and properties of the Obligors which are
reasonably necessary for the operation of their respective businesses are in
good working condition, ordinary wear and tear excepted, and are able to serve
the function for which they are currently being used or for which they are
intended.
4.13 No Defaults, Compliance With Laws.
No Obligor is in default under any Contractual Obligation, which
default would have a Material Adverse Effect. Each Obligor has complied and is
in compliance in all respects with all Requirements of Law including, without
limitation, all applicable Environmental Laws and securities laws,
non-compliance with which would have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
4.14 Indebtedness.
No Obligor has any Indebtedness, except (i) Indebtedness set forth
in the Disclosure Schedule and (ii) Indebtedness set forth in the financial
statements referred to in Section 4.5.
4.15 Not an Investment Company or Regulated Company.
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(a) Neither the Obligors nor their respective Affiliates are subject
to regulation under the Investment Company Act of 1940, as amended, or any
statute or regulation which regulates the incurrence by the Borrowers or such
Affiliate of indebtedness for borrowed money.
(b) Neither the Obligors nor their respective Affiliates are subject
to regulation under the Public Utility Holding Company Act of 1935, as amended,
or under the applicable law of any state relating to public utilities and/or
public service corporations.
4.16 Use of Loan Proceeds and Letters of Credit.
(a) The Borrowers shall use the proceeds of the Loans solely to
repay all outstanding indebtedness under the Existing Credit Agreements and to
finance their working capital needs. The Borrowers shall use the Letters of
Credit solely to replace any letters of credit issued under the Existing Credit
Agreements that are outstanding on the Effective Date and to pay for Inventory
purchased by them in the ordinary course of their business. In no event shall
the proceeds of any Loan or any Letter of Credit be used for the purpose of
financing, directly or indirectly, the cost of any Corporate Acquisition,
without the prior written consent of all the Lenders.
(b) No part of the proceeds of the Loans or the Letters of Credit
will be used for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" (as such term is defined in Regulation
U of the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect), or for the payment in full or in part of, or to
provide credit support for, Indebtedness which was or is to be incurred for such
purpose, or to extend credit or support credit extended to others for such
purpose. No Borrower is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying "margin stock".
4.17 Ranking of Loans.
The Obligations rank and will rank at least pari passu in priority
of payment with all other Indebtedness of the Borrowers.
4.18 Burdensome Provisions.
No Obligor is a party to or bound by any Requirement of Law or
Contractual Obligation, compliance with which could have a Material Adverse
Effect.
4.19 ERISA.
During the five-year period ending on the Effective Date (or, with
respect to (vi) or (viii) below, as of the date such representation is made or
deemed made), except as set forth in the Disclosure Schedule or as reflected in
the financial statements referred to in Section 4.5, none of the following
events or conditions has occurred which, either individually or in the
aggregate, has resulted or could reasonably be expected to result in a liability
to the Borrowers which could have a Material Adverse Effect: (i) a Reportable
Event; (ii) an "accumulated funding deficiency" (within the meaning of Section
412 of the Code or Section 302 of ERISA); (iii) any material noncompliance with
the applicable provisions of ERISA or the Code; (iv) a termination of a Single
Employer Plan (other than a standard termination pursuant to
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Section 4041(b) of ERISA); (v) a Lien in favor of the PBGC or a Plan; (vi)
Underfunding with respect to any Single Employer Plan; (vii) a complete or
partial withdrawal from any Multiemployer Plan by the Borrowers or any Commonly
Controlled Entity; (viii) any liability of the Borrowers or any Commonly
Controlled Entity under ERISA if the Borrowers or any such Commonly Controlled
Entity were to withdraw completely from all Multiemployer Plans as of the annual
valuation date most closely preceding the date on which this representation is
made or deemed made; (ix) the Reorganization or insolvency (within the meaning
of Section 4245 of ERISA) of any Multiemployer Plan; (x) the excess of the
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the aggregate liability of the Borrowers or any Commonly Controlled Entity
for post-retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as defined in Section
3(1) of ERISA) over the assets under all such Plans; and (xi) an event or
condition with respect to which the Borrowers or any Commonly Controlled Entity
could incur any liability in respect of a Former Plan.
4.20 Environmental Matters.
Except as set forth in the Disclosure Schedule:
(a) (i) The facilities and properties owned, leased or operated by
any Obligor (the "Properties") and all operations at the Properties are in
compliance with all applicable Environmental Laws, (ii) there is no violation of
any Environmental Law with respect to the Properties or the business operated by
any Obligor (the "Business"), and (iii) there are no conditions relating to the
Business or Properties that could reasonably be expected to give rise to
liability under any applicable Environmental Law, except for any failure so to
comply or violation or condition, or any aggregation thereof, that could not
reasonably be expected to result in the payment of a Material Environmental
Amount.
(b) To the best of their knowledge after diligent inquiry, the
Properties do not contain, and have not previously contained, any Hazardous
Substances at, on or under the Properties in amounts or concentrations that
constitute or constituted a violation of, or could reasonably give rise to
liability under, Environmental Laws except insofar as the presence of any
Hazardous Substances is not reasonably likely to result in the payment of a
Material Environmental Amount.
(c) No Obligor has received any written or verbal notice of, or
inquiry from any Governmental Authority, of any violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business (including, without limitation, any notice that any of the
Properties has been listed on the national priorities list or any similar state
list), and neither the Parent Guarantor nor any Borrower has knowledge or reason
to believe that any such notice will be received or is being threatened, except
insofar as such notice or threatened notice, or any aggregation thereof, does
not involve a matter or matters that is or are reasonably likely to result in
the payment of a Material Environmental Amount.
(d) Hazardous Substances have not been transported or disposed of
from the Properties, or generated, treated, stored or disposed of by or on
behalf of any Obligor at, on or under any of the Properties or any other
location in violation of, or in a manner that would be reasonably likely to give
rise to liability under, any applicable Environmental Law, except insofar as any
such violation or liability referred to in this paragraph, or any aggregation
thereof, is not reasonably likely to result in the payment of a Material
Environmental Amount.
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(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Parent Guarantor or any Borrower,
threatened, under any Environmental Law to which any Obligor is or will be named
as a party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to any
Obligor, the Properties or the Business, except insofar as such proceeding,
action, decree, order or other requirement, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(f) There has been no release or, to the best knowledge of the
Parent Guarantor and the Borrowers after diligent inquiry, threat of release of
Hazardous Substances at or from the Properties, or arising from or related to
the operations (including, without limitation, disposal) of any Obligor in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that would be reasonably likely to
give rise to liability under Environmental Laws, except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, is not reasonably likely to result in the payment of a Material
Environmental Amount.
(g) No Obligor has knowingly assumed any liability of any Person
under any Environmental Law.
(h) Each Obligor is implementing an environmental program reasonably
designed to (i) ensure that such Obligor, its operations (including, without
limitation, disposal of materials), and any properties owned or leased by such
Obligor, remain in compliance with applicable Environmental Laws and (ii)
minimize prudently any liabilities or potential liabilities that such Obligor,
its operations (including, without limitation, disposal of materials), and any
properties owned or leased by such Obligor, may have under applicable
Environmental Laws, except where the failure to do so could not reasonably be
expected to result in the payment of a Material Environmental Amount.
4.21 Correct Information.
The information, schedules, exhibits and reports furnished by the
Parent Guarantor or any Borrower to the Administrative Agent in connection with
the negotiation and preparation of this Agreement and the other Loan Documents
did not contain any omissions or misstatements of fact which would make the
statements contained therein misleading or incomplete in any material respect
when furnished to the Administrative Agent. Neither the Parent Guarantor nor any
Borrower knows of any fact that has not been disclosed in writing to the Lenders
and which materially and adversely affects, or which could reasonably be
expected in the future to materially and adversely affect, any Obligor or the
ability of any Obligor to perform its obligations hereunder and under any other
Loan Documents.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions Precedent to Initial Credit Event.
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The obligation of each Lender to make its initial Loan hereunder,
and the obligation of the Issuing Bank to issue the initial Letter of Credit
hereunder, are subject to the following conditions precedent:
(a) Receipt of Documents. The Administrative Agent shall have
received each of the following documents (dated or certified as of the Closing
Date unless otherwise provided herein, in form and substance satisfactory to the
Administrative Agent, and in number sufficient for distribution to all the
Lenders):
(i) Credit Agreement. Counterparts of this Agreement, duly
executed by each party hereto;
(ii) Notes. A Note in favor of each Lender, appropriately
completed and duly executed by each Borrower;
(iii) Security Agreement. A security agreement covering all
of the personal property and assets of the Borrowers substantially
in the form of Exhibit C, duly executed by the Parent Guarantor and
each Borrower (the "Security Agreement");
(iv) Pledge. A pledge agreement substantially in the form of
Exhibit E (the "Pledge Agreement"), pursuant to which the Parent
Guarantor shall pledge all of the Capital Stock of the Borrowers
owned by it and all cash, securities and other property held from
time to time in the Investment Account, and each Borrower shall
pledge all of the Capital Stock of its Subsidiaries owned by it,
duly executed by the Parent Guarantor and each Borrower, together
with (1) all certificates representing Capital Stock of the
Borrowers and any other Restricted Subsidiaries of the Parent
Guarantor pledged to the Administrative Agent pursuant to the Pledge
Agreement, accompanied by undated stock powers executed in blank and
(2) executed proxies in the form attached to the Pledge Agreement as
an exhibit, relating to such Capital Stock.
(v) Subsidiary Guarantee. A guarantee substantially in the
form of Exhibit F, duly executed by each Restricted Subsidiary (the
"Subsidiary Guarantee");
(vi) Perfection and Priority of Liens. (1) UCC-1 financing
statements duly executed by each Borrower and properly completed for
filing in all public offices specified by the Administrative Agent,
(2) letters in form and substance satisfactory to the Administrative
Agent, duly executed by each public warehouse in which each Borrower
maintains Inventory, and (3) evidence that no financing statements
are currently on record in any public office specified by the
Administrative Agent naming any Obligor as debtor, other than
financing statements filed in connection with Permitted Liens and
financing statements with respect to which the Administrative Agent
shall have received UCC-3 termination statements duly executed by
the secured party named therein, (4) evidence satisfactory to the
Administrative Agent that the Collateral which constitutes
intellectual property is owned by the Borrowers and is not subject
to any liens, licenses or interests in favor of any Person other
than the Administrative Agent, and (5) evidence satisfactory to the
Administrative Agent that its liens on the Collateral which
constitutes intellectual property have been registered with the U.S.
Patent and Trademark Office or the U.S. Copyright Office, as
appropriate;
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(vii) Insurance. Certificates of insurance satisfactory in
form and substance to the Administrative Agent with respect to the
insurance required by the provisions of Section 6.6, which shall
include loss payable clauses naming the Administrative Agent as
loss-payee or additional insured, as appropriate, together with
copies of the insurance policies listed in such certificates.
(viii) Corporate Authority, Actions and Incumbency.
Originals or copies of such documents as the Administrative Agent
may require (all of which shall be certified by such corporate
officers or governmental officials as the Administrative Agent may
require) relating to the existence and corporate authority of each
Obligor, the taking of all necessary corporate action to authorize
the execution, delivery and performance by each Obligor of the Loan
Documents to which it is a party, and the incumbency and
authenticity of the signature of each officer who executes a Loan
Document on behalf of any Obligor;
(ix) Compliance Certificate. A certificate dated the Closing
Date, duly executed by Responsible Officers of the Borrowers, to the
effect that on and as of such date (1) the Borrowers have complied
and are then in compliance with all the terms, covenants and
conditions of this Agreement, (2) there exists no Default or Event
of Default under this Agreement, and (3) the representations and
warranties contained in Article 4 are true with the same effect as
though such representations and warranties had been made on such
date, which certificate shall set forth in detail reasonably
satisfactory to the Administrative Agent the calculations upon which
the Borrowers base their determination that they are in compliance
with the Financial Covenants on the Effective Date;
(x) Opinion of Counsel. The favorable legal opinion of Snow
Becker Krause P.C., special counsel to the Obligors, as to such
matters as the Administrative Agent shall reasonably require;
(xi) Financial Statements. Copies, certified to the
Administrative Agent's satisfaction, of the financial statements
specified in Section 4.5;
(xii) Solvency Certificate. A solvency certificate
satisfactory in form and substance to the Administrative Agent, duly
executed by Responsible Officers of the Borrowers and the Parent
Guarantor;
(xiii) Federal Reserve Form U-1. If the Administrative Agent
so requires, a completed Federal Reserve Form U-1 duly executed by
the Borrowers; and
(xiv) Additional Documents. Such other statements,
certificates, documents or information as the Administrative Agent or any Lender
may reasonably specify.
(b) Termination of Existing Credit Agreements. The Administrative
Agent shall have received evidence satisfactory to it that the Existing Credit
Agreements have been terminated and all indebtedness of the Obligors thereunder
has been paid in full or will be paid in full concurrently with the making of
the initial Loans hereunder.
(c) Payment of Closing Fees. Each Lender shall have received payment
in full of the Closing Fees owing to it.
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(d) Field Examination. The Administrative Agent shall have received
a written report prepared by the Administrative Agent's auditors, based upon a
filed examination conducted by them within 30 days prior to the Closing Date and
shall be satisfied with the findings of such report.
(e) Availability. The Lenders shall be satisfied that the Aggregate
Available Commitments exceed $300,000.
(f) Subordination of Convertible Debt. The Lenders shall be
satisfied that the Convertible Debentures and the Convertible Notes are
subordinated to the Obligations on terms and conditions acceptable to the
Lenders.
5.2 Conditions Precedent to Each Credit Event.
The obligation of each Lender to make any Loan hereunder (including
its initial Loan, but excluding any Base Rate Loan required to be made by it
pursuant to paragraph (g) of Section 2.10), and the obligation of the Issuing
Bank to issue or renew any Letter of Credit hereunder (including the initial
Letter of Credit), are subject to the following conditions precedent (it being
agreed that any certificates or other documents required hereunder shall be
dated or certified as of the Borrowing Date for such Loan or Issuance Date for
such Letter of Credit unless otherwise provided herein, and shall be in form and
substance satisfactory to the Administrative Agent and in number sufficient for
distribution to the Issuing Bank and all the Lenders):
(a) Representations and Warranties. Each of the representations and
warranties set forth in Article 4 shall be true and correct in all material
respects on and as of such date as if made on and as of such date (except to the
extent that such representations and warranties expressly relate to an earlier
date) and, if the Administrative Agent so requests, the Administrative Agent
shall have received a certificate duly executed by Responsible Officers of all
the Borrowers to such effect.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date both before and after giving effect to the Loans
requested to be made and the Letters of Credit requested to be issued on such
date and, if the Administrative Agent so requests, the Administrative Agent
shall have received a certificate duly executed by Responsible Officers of all
the Borrowers to such effect.
(c) No Material Adverse Change. No material adverse change shall
have occurred in the consolidated financial condition, operations, business or
prospects taken as a whole of the Parent Guarantor, the Borrowers and their
respective consolidated Restricted Subsidiaries from that set forth in the
financial statements referred to in Section 4.5.
(d) Request of Borrowing or Issuance. The Administrative Agent shall
have received an appropriate Notice of Borrowing or LC Application, as the case
may be, with respect to the Loans to be made or Letters of Credit to be issued
on such date.
(e) Borrowing Base Certificate. The Administrative Agent shall have
received the most recent Borrowing Base Certificate required to be delivered by
the Borrowers pursuant to Section 6.3(e), which certificate shall indicate that
the requested Loan or Letter of Credit does not exceed the Aggregate Available
Commitments on such date.
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(f) Fees. If the relevant credit event consists of a request for
issuance or renewal of a Letter of Credit, the Administrative Agent shall have
received payment in full of the Letter of Credit Fee payable pursuant to Section
2.12(b) in connection with such issuance or renewal.
(g) Additional Matters. The Administrative Agent shall have received
such additional instruments, certificates or other documents, and such
additional information, as the Administrative Agent may reasonably require.
Each borrowing of Loans and each issuance of a Letter of Credit
hereunder shall constitute a representation and warranty by the Parent Guarantor
and the Borrowers that as of the date of such borrowing or issuance the
conditions contained in this Section 5.2 have been satisfied with respect to
such borrowing or issuance.
ARTICLE 6
COVENANTS
The Borrowers and the Parent Guarantor hereby covenant and agree
that so long as any Commitment remains in effect or any Letter of Credit remains
outstanding and until the payment in full of the Obligations and the complete
performance of all of the Borrowers' and the Parent Guarantor's other
obligations hereunder and under the other Loan Documents, unless the
Administrative Agent and the Majority Lenders shall otherwise consent in
writing:
6.1 Corporate Existence, Properties.
Each Obligor shall do or cause to be done all things necessary to:
(a) preserve and keep in full force and effect its legal existence;
(b) remain or become a corporation qualified to engage in business
in good standing in all jurisdictions in which the character of its
properties or the transaction of its business make such
qualification necessary, except where failure to so qualify would
not have a Material Adverse Effect;
(c) maintain, preserve and protect all permits, rights and
privileges necessary for the proper conduct of its business and all
franchises, licenses, patents, trade names, trademarks and
copyrights owned by or licensed to it that are necessary or
desirable in the normal conduct of its business;
(d) ensure that all property used or useful in the conduct of its
business is maintained and kept in good repair, working order and
condition, and from time to time take all reasonable action to make,
or cause to be made, all needful and proper repairs, renewals,
replacements, betterments and improvements thereto so that, in the
reasonable judgment of such Obligor, the business carried on in
connection therewith may be properly and advantageously conducted at
all times.
6.2 Payment of Indebtedness, Taxes.
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Each Obligor shall pay all of its Indebtedness and obligations
promptly and in accordance with normal terms and trade practices and shall
promptly pay and discharge or cause to be paid or discharged all taxes,
assessments or other governmental charges or levies imposed upon it or upon its
income and profits or upon its property, real, personal or mixed, or upon any
part thereof, before the date on which penalties attach thereto, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might become a lien or charge upon such properties or any part thereof;
provided, however, that no Obligor shall be required to pay and discharge any
such debt, obligation, tax, assessment, charge, levy or claim so long as it is
Properly Contested. For purposes of this Agreement, any debt or obligation of,
any tax, assessment, charge, levy or claim against, and any litigation or other
legal proceeding involving, any Person shall be deemed to be "Properly
Contested" only if (a) it shall be contested diligently and in good faith by
appropriate proceedings, (b) such Person shall have assigned on its books
adequate reserves with respect to any such debt, obligation, tax, assessment,
charge, levy or claim so contested, and (c) no material portion of such Person's
assets shall be subject to encumbrance, loss or forfeiture by reason of such
contest.
6.3 Financial Statements, Reports, etc.
Each Borrower shall furnish to each Lender (in reasonable detail
satisfactory to the Lenders):
(a) as soon as available but in any event no later than 90 days
after the close of each fiscal year, the consolidated and consolidating balance
sheets of the Parent Guarantor, the Borrowers and any other consolidated
Subsidiaries of the Parent Guarantor as of the close of such fiscal year and the
related consolidated and consolidating profit and loss statements and statements
of cash flows for such fiscal year, such financial statements to be audited by,
and accompanied by a report of, a firm of independent certified public
accountants of recognized national standing acceptable to the Administrative
Agent (the "Accountants") to the effect that such financial statements have been
prepared in conformity with GAAP, which audit and accompanying report shall not
contain any qualification or exception, together with a certificate of the
Accountants (1) stating that, in connection with their audit of the Parent
Guarantor, the Borrowers and such other consolidated Subsidiaries they have
reviewed the provisions of this Agreement and that nothing has come to their
attention in the course of such audit to lead them to believe that any Event of
Default hereunder exists or, if such is not the case, specifying such Event of
Default and the nature thereof (it being understood that the examination of such
accountants cannot be relied upon to give them knowledge of any Event of Default
except as it relates to accounting or auditing matters) and (2) setting forth in
detail reasonably satisfactory to the Administrative Agent the calculations made
to determine compliance with the Financial Covenants and the information
required to make such calculations;
(b) as soon as available but in any event no later than 45 days
after the close of each of the first three fiscal quarters of each fiscal year,
the consolidated and consolidating balance sheets of the Parent Guarantor, the
Borrowers and any other consolidated Subsidiaries of the Parent Guarantor as of
the close of such fiscal quarter and the related consolidated and consolidating
profit and loss statements and statements of cash flows for such fiscal quarter
and for the period from the beginning of the then current fiscal year to the end
of such fiscal quarter, such financial statements to be accompanied by a
certificate of Responsible Officers of the Parent Guarantor and the Borrowers,
stating that said financial statements fairly present the consolidated financial
condition and results of operations, as the case may be, of the Parent
Guarantor, the Borrowers and such other consolidated Subsidiaries in accordance
with GAAP as at the end of, and for, such fiscal quarter (except for the absence
of footnotes and subject to normal year-end audit adjustments);
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(c) as soon as available but in any event no later than 30 days
after the close of each month (other than the last month of any fiscal quarter)
the consolidated and consolidating balance sheets of the Parent Guarantor, the
Borrowers and any other consolidated Subsidiaries of the Parent Guarantor as of
the close of such month and the related consolidated and consolidating profit
and loss statements and statements of cash flows for such month and for the
period from the beginning of the then current fiscal year to the end of such
month, such financial statements to be accompanied by a certificate of
Responsible Officers of the Parent Guarantor and the Borrowers, stating that
said financial statements fairly present the consolidated financial condition
and results of operations, as the case may be, of the Parent Guarantor, the
Borrowers and such consolidated Subsidiaries in accordance with GAAP as at the
end of, and for, such month (except for the absence of footnotes and subject to
normal year-end audit adjustments);
(d) together with each set of financial statements delivered to the
Lenders pursuant to paragraph (a), (b) or (c) above, a certificate of a
Responsible Officer of the Parent Guarantor and each Borrower to the effect that
to the best of his knowledge, after due inquiry, no Default or Event of Default
has occurred and is continuing (or, if any Default or Event of Default has
occurred and is continuing, describing the same in detail reasonably
satisfactory to the Administrative Agent and describing the actions, if any,
that the Borrowers have taken or propose to take with respect thereto), which
certificate shall set forth in detail reasonably satisfactory to the
Administrative Agent the calculations made to determine compliance with the
Financial Covenants and the information required to make such calculations;
(e) concurrently with each request for a Loan or Letter of Credit,
but in any event at least once a week whether or not a request for a Loan or
Letter of Credit is made, a borrowing base certificate substantially in the form
of Exhibit H duly certified by a Responsible Officer of each Borrower (a
"Borrowing Base Certificate"), setting forth the information requested therein
(i) in the case of a Borrowing Base Certificate delivered in connection with a
request for a Loan or Letter of Credit, as of the day of such request, and (ii)
in the case of a Borrowing Base Certificate that is not being delivered in
connection with a request for a Loan or Letter of Credit, as of the last day of
the immediately preceding week;
(f) as soon as available and in any event within 60 days prior to
the beginning of each fiscal year, annual projections prepared on a consolidated
basis for the Parent Guarantor and the Borrowers by a Responsible Officer of the
Parent Guarantor, covering such fiscal year and certified by such officer to
have been prepared in good faith and based upon reasonable assumptions;
(g) as soon as available and in any event within two Business Days
after the filing thereof, copies of any reports, statements or other documents
filed by the Parent Guarantor with the Securities and Exchange Commission
(including, without limitation, all reports filed by the Parent Guarantor on
Forms 10-K, 10-Q and 8-K) ;
(h) as soon as available and in any event within two Business Days
after the mailing thereof to shareholders, copies of any written communications
sent by the Parent Guarantor to its shareholders generally;
(i) as soon as available and in any event within two Business Days
after receipt thereof from the broker-dealer that maintains such account, copies
of all monthly statements relating to the Investment Account;
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(j) from time to time such other information regarding the business,
affairs or financial condition of any Obligor (including, without limitation,
any reports or other information required to be filed under ERISA) as the
Administrative Agent, the Issuing Bank or any Lender may reasonably request.
6.4 Notice of Adverse Events and Significant Changes.
The Borrowers shall furnish to the Administrative Agent, the Issuing
Bank and each Lender prompt written notice of:
(a) the occurrence of any event which constitutes a Default or Event
of Default hereunder,
(b) the commencement of any action or proceeding involving or
affecting the Parent Guarantor, any Borrower or any Restricted Subsidiary or any
properties or assets of the Parent Guarantor or any Borrower or Restricted
Subsidiary an adverse determination of which could reasonably be expected to
have a Material Adverse Effect,
(c) any default or event of default under any material Contractual
Obligation of the Parent Guarantor, any Borrower or any Restricted Subsidiary,
(d) any litigation, investigation or proceeding (including without
limitation any investigation under any Environmental Laws or securities laws),
which may be commenced at any time against the Parent Guarantor, any Borrower or
any Restricted Subsidiary by any Governmental Authority or any other Person,
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect,
(e) the occurrence of any of the following events: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Single Employer Plan which could reasonably be expected to have a Material
Adverse Effect, (ii) a failure on the part of the Parent Guarantor, any Borrower
or any Commonly Controlled Entity to make any required contribution to a Single
Employer or Multiemployer Plan (other than a failure to make a contribution
which (1) together with all other contributions that are then past due does not
exceed $100,000 in the aggregate, (2) does not constitute or result in a
violation of any provision of ERISA or the Code or any regulation adopted
thereunder, (3) does not cause an Underfunding of such Plan and (4) does not
result in the imposition of any fees or penalties against any Borrower or any
Commonly Controlled Entity, other than the requirement to pay interest accrued
on such contribution to the relevant Plan), (iii) the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or insolvency (within the meaning of Section 4245 of ERISA) of,
any Multiemployer Plan; (iv) Underfunding with respect to any Single Employer
Plan which could result in a material liability to any Borrower; (v) the
institution of proceedings or the taking of any other action by the PBGC, the
Parent Guarantor, any Borrower, any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or insolvency (within the meaning of Section 4245 of ERISA) of,
any Single Employer or Multiemployer Plan; or (vi) the occurrence or expected
occurrence of any event or condition under which the Parent Guarantor, any
Borrower or any Commonly Controlled Entity has incurred or could incur any
liability in respect of a Former Plan which could reasonably be expected to have
a Material Adverse Effect,
(f) any material adverse change in the business, operations,
property, condition (financial or otherwise) or prospects of the Parent
Guarantor, the Borrowers and their Restricted Subsidiaries taken as a whole,
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(g) (i) any release or discharge by the Parent Guarantor, any
Borrower or any Subsidiary of any Hazardous Substances required to be reported
under Environmental Laws to any Governmental Authority; (ii) any condition,
circumstance, occurrence or event that could result in material Environmental
Costs or could result in the imposition of any lien or other restriction on the
title, ownership or transferability of any Property; and (iii) any proposed
action to be taken by the Parent Guarantor, any Borrower or any Subsidiary that
could subject the Parent Guarantor or any Borrower or Restricted Subsidiary to
any material additional or different requirements or liabilities under
Environmental Laws,
(h) the execution by the Parent Guarantor, any Borrower or any
Restricted Subsidiary of any new collective bargaining agreement or other labor
contract, the recognition of any union or other labor organization as bargaining
representative for a bargaining unit of employees of the Parent Guarantor, any
Borrower or any Restricted Subsidiary, any pending or threatened strike, work
stoppage, material unfair labor practice claim or charge, arbitration or other
material labor dispute against or affecting the Parent Guarantor, any Borrower
or any Restricted Subsidiary, and any actions, suits, charges, demands, claims,
counterclaims or proceedings pending or, to the knowledge of the Parent
Guarantor or any Borrower, threatened against the Parent Guarantor, any Borrower
or any Restricted Subsidiary, by or on behalf of, or with, its employees, other
than employee grievances arising in the ordinary course of business which are
not, in the aggregate, material,
(i) any change in the fiscal year or any fiscal quarter,
(j) any change in any Borrower's accounting policies, practices or
procedures in effect on the date hereof, and
6.5 Books and Records; Inspection.
The Parent Guarantor and each Borrower shall maintain, and shall
cause each Restricted Subsidiary to maintain, proper books and records with
respect to the operation of its business in accordance with GAAP consistently
applied; the Parent Guarantor and each Borrower shall permit, and shall cause
each Restricted Subsidiary to permit, authorized representatives of the
Administrative Agent to visit and inspect from time to time upon reasonable
notice during business hours (or at any time after the occurrence and during the
continuance of an Event of Default hereunder) any of the offices, inventory
locations and other facilities of the Parent Guarantor, any Borrower or any
Restricted Subsidiary, to examine the books and records of the Parent Guarantor,
any Borrower or any Restricted Subsidiary and make copies or extracts therefrom,
to examine the Inventory of the Parent Guarantor, any Borrower or any Restricted
Subsidiary, to conduct field examinations with respect to the assets of the
Parent Guarantor, any Borrower or any Restricted Subsidiary, to verify the
eligibility of the Inventory and Receivables of any Borrower for inclusion in
the Borrowing Base, and to discuss the affairs, inventory and accounts of the
Parent Guarantor, any Borrower or any Restricted Subsidiary with its officers
and accountants.
6.6 Insurance.
The Parent Guarantor and each Borrower shall, and shall cause each
Restricted Subsidiary to, (i) keep its assets that are of an insurable character
insured by financially sound and reputable insurers against loss or damage by
fire, explosion and other hazards insured against by extended coverage in
amounts sufficient to prevent it from becoming a co-insurer (other than
maintaining reasonable deductibles) and in any event not less than 80% of the
full insurable value (replacement value if available) of the property insured,
to the extent and in the manner customary for companies in similar business
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similarly situated, (ii) maintain with financially sound and reputable insurers,
insurance against hazards, risks and liability to persons and property to the
extent and in the manner customary for companies in similar business similarly
situated, (iii) file with the Administrative Agent upon its request a detailed
list of the insurance then in effect and stating the names of the insurance
companies, the amounts of insurance, dates of expiration thereof and the
properties and risks covered thereby, together with evidence that all premiums
with respect thereto have been paid, (iv) deliver to the Administrative Agent
such endorsements naming the Administrative Agent as loss-payee and/or the
Administrative Agent and the Creditors as additional insureds as the
Administrative Agent or any Lender may request from time to time and providing
for at least thirty days' prior written notice of cancellation to the
Administrative Agent, and (v) maintain the Key Man Policy in full force and
effect with an insurance company rated A- or better by Best's Insurance Guide
and Key Ratings, and furnish to the Administrative Agent no later than one month
prior to each scheduled annual expiration date thereof evidence of the payment
of all premiums payable thereon for the succeeding year.
6.7 Compliance with Laws.
The Parent Guarantor and each Borrower shall, and shall cause each
Subsidiary to, observe and comply in all material respects with all Requirements
of Law which now or at any time hereafter may be applicable to the Parent
Guarantor, such Borrower or such Subsidiary (including all applicable provisions
of ERISA and the Code).
6.8 Environmental Laws.
The Parent Guarantor and each Borrower shall, and shall cause each
Subsidiary to, (a) comply with, and use all reasonable efforts to ensure
compliance by all tenants and subtenants of the Properties, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain and use
all reasonable efforts to ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, except in
each case to the extent that the failure to do so could not reasonably be
expected to result in the payment of a Material Environmental Amount, (b)
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other similar actions required of it under Environmental
Laws and promptly comply with all orders and directives of all Governmental
Authorities regarding Environmental Laws, except to the extent that the same are
being contested in good faith by appropriate proceedings, and except in each
case to the extent that the failure to do so could not reasonably be expected to
result in the payment of a Material Environmental Amount.
6.9 Use of Proceeds.
The Borrowers shall use the Letters of Credit and the proceeds of
the Loans solely in accordance with the representations and warranties set forth
in Section 4.16.
6.10 Indebtedness.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Indebtedness at any time, except:
(a) Indebtedness owing to the Lenders and the Issuing Bank hereunder
and under the other Loan Documents;
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(b) taxes, assessments and governmental charges that are not yet due
and payable;
(c) Indebtedness secured by purchase money liens permitted under
Section 6.11(f) and obligations under Capital Leases, so long as the
total amount of such Indebtedness and obligations does not exceed
$300,000 in the aggregate for the Parent Guarantor, the Borrowers
and the Restricted Subsidiaries;
(d) Subordinated Indebtedness;
(e) Indebtedness specified in the financial statements referred to
in Section 4.5 or in the Disclosure Schedule;
(f) Unsubordinated Convertible Debt not exceeding $550,000 in
aggregate principal amount;
(g) Indebtedness which does not exceed $150,000 in aggregate
principal amount at any one time outstanding, resulting from margin
loans made by Gilford or its clearing agent; and
(h) obligations under hedging contracts or interest rate swap, cap
or collar agreements or similar arrangements entered into for
hedging purposes with any Lender or any other financial institution
that is satisfactory to the Majority Lenders.
6.11 Liens.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien of any kind upon, or any security interest in, any of its property or
assets, whether now owned or hereafter acquired, except:
(a) Liens in favor of the Administrative Agent securing the
Obligations;
(b) liens for taxes not delinquent or being contested in good faith
and by appropriate proceedings;
(c) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment
insurance;
(d) deposits or pledges to secure bids, tenders, contracts (other
than contracts for borrowed money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising
in the ordinary course of business;
(e) mechanics', workers', carriers', warehousemen's, materialmen's
or other like liens arising in the ordinary course of business with
respect to obligations which are not due, which are bonded or
discharged within 30 days of the date of filing or which are being
contested in good faith;
(f) purchase money liens on fixed assets of any Borrower or
Restricted Subsidiary, securing Indebtedness permitted under Section
6.10(c), which liens secure the purchase price of such fixed assets
and apply only to the fixed assets so purchased, provided that the
principal amount of the indebtedness secured by any such lien shall
at no time exceed an amount equal to the
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lesser of the cost of the fixed assets so purchased and the fair
market value of such fixed assets (as determined in good faith by
the board of directors of any Borrower or Restricted Subsidiary) at
the time of such acquisition, and that any such Lien shall be
created within 12 months after, in the case of property, its
acquisition, and in the case of improvements, their completion;
(g) liens arising out of Capital Leases permitted under Section
6.10(c), so long as such liens attach only to the fixed assets
subject to such Capital Leases;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial and do not interfere with the
ordinary conduct of the business of the Parent Guarantor, the
Borrowers and the Restricted Subsidiaries;
(i) the Liens set forth in the Disclosure Schedule, provided that no
such Lien is extended to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is
not increased; and
(j) liens on securities in the Investment Account in favor of
Gilford, securing Indebtedness permitted under Section 6.10(g).
6.12 Contingent Liabilities.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable upon any obligation of any Person,
except (a) by the endorsement of instruments for deposit or collection or
similar transactions in the ordinary course of business, (b) guarantees in favor
of the Administrative Agent, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents, (c) the guarantees disclosed in the financial
statements referred to in Section 4.5, and (d) the guarantees listed in the
Disclosure Schedule.
6.13 Mergers and Consolidations; Corporate Acquisitions.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Subsidiary (irrespective of whether such Subsidiary is a Restricted
Subsidiary) to, enter into any merger or consolidation, or make any Corporate
Acquisition; provided, however, that (a) the Parent Guarantor and the Borrowers
may merge or consolidate with each other or with their respective Restricted
Subsidiaries (provided that a Borrower is the surviving entity of any such
merger or consolidation) and (b) Restricted Subsidiaries of the Parent Guarantor
other than the Borrowers may merge or consolidate with each other. The Lenders
understand that the Parent Guarantor and the Borrowers are evaluating a number
of Corporate Acquisitions and may request the Lenders' consent to one or more
Corporate Acquisitions during the term of this Agreement. The Obligors
understand that any such Corporate Acquisition shall be subject to the prior
written consent of all the Lenders, which consent may be given or withheld by
each Lender in its sole and absolute discretion and, if given, may be subject to
additional conditions imposed by such Lender. Nothing herein contained shall be
deemed to constitute a consent by any Lender to any Corporate Acquisition.
6.14 Acquisition and Disposition of Assets.
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The Parent Guarantor and the Borrowers shall not, and shall not
permit any Subsidiary to, purchase, lease or otherwise acquire any capital
assets, or sell, lease, license or otherwise dispose of any of any of their
respective assets, except (a) sales of Inventory in the ordinary course of
business, (b) dispositions of obsolete equipment, (c) replacements of equipment
in the ordinary course of business and not in connection with any liquidation or
sale or other disposition of a business unit, provided that the new equipment
serves substantially the same function as the equipment being replaced and (d)
acquisitions of assets which constitute Capital Expenditures permitted under
Section 6.22.
6.15 Investments.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, make any Investment; provided, however,
that:
(a) the Obligors may purchase obligations issued or guaranteed by
the United States of America or any agency thereof or short term repurchase
agreements with respect thereto, in each case maturing within 12 months after
the date of acquisition thereof;
(b) the Obligors may purchase short-term certificates of deposit
issued by, and deposits in, any Lender or any other commercial bank having a
combined capital and surplus of not less than $500,000,000 or the equivalent
thereof in another currency, in each case maturing within 12 months after the
date of acquisition thereof;
(c) the Obligors may purchase short-term commercial paper maturing
within 12 months after the date of acquisition thereof, which has been given the
highest rating by Standard & Poor's Ratings Group, Moody's Investors Service,
Inc., or another nationally recognized credit rating agency of similar standing;
(d) the Obligors may purchase shares of money market mutual funds
having net assets of not less than $1,000,000,000, which invest solely in
securities referred to in clauses (a), (b) or (c) above;
(e) the Parent Guarantor may continue to hold the Initial Pledged
Securities (as such term is defined in the Pledge Agreement) in the securities
account maintained by it with Gilford, Account No. HNU-951791-60 and may trade
such securities from time to time and invest the proceeds thereof in other
marketable securities; provided, however, that the Parent Guarantor shall in no
event (x) make any additional Investments in the Investment Account (other than
reinvestments of proceeds of securities held in the Investment Account and
traded from time to time) or (y) establish or maintain any other securities
account with Gilford or any other entity;
(f) loans and advances to their respective employees for travel,
entertainment and relocation expenses in the ordinary course of business in an
aggregate amount not to exceed $10,000 at any one time outstanding;
(g) existing Investments in Restricted Subsidiaries listed on the
Disclosure Schedule; and
(h) the Parent Guarantor may use up to $5,000,000 in aggregate net
proceeds of New Equity Issuances to make Investments in Unrestricted
Subsidiaries, provided that such Unrestricted Subsidiaries use such Investments
solely to repay an equivalent amount of Indebtedness.
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6.16 Change in Nature of Business.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, engage at any time in any business or
business activity other than the business currently conducted by it and business
activities reasonably incidental thereto.
6.17 Transactions with Affiliates.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, (a) make any
Investment in any Affiliate that is not an Obligor except as permitted under
Section 6.15(h), (b) transfer, sell, lease, assign or otherwise dispose of any
assets to any Affiliate that is not an Obligor, (c) merge into or consolidate
with or purchase or acquire assets from any Affiliate that is not an Obligor, or
(d) enter into any other transaction directly or indirectly with or for the
benefit of any Affiliate that is not an Obligor (including, without limitation,
any Guarantee Obligation or assumption of obligations thereof); provided,
however, that: (x) any Affiliate who is a natural person may serve as an
employee, officer or director of the Parent Guarantor, a Borrower or a
Restricted Subsidiary and receive reasonable compensation for his or her
services in such capacity and (y) the Parent Guarantor, the Borrowers and the
Restricted Subsidiaries may enter into any transaction with Affiliates that are
not Obligors providing for the leasing of property, the rendering or receipt of
services or the purchase or sale of inventory or other assets in the ordinary
course of business on terms that are no less favorable to the Parent Guarantor
or the relevant Borrower or Restricted Subsidiary than those which might be
obtained at the time from Persons that are not Affiliates.
6.18 Restricted Payments.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, make any Restricted Payment, or set apart
any sum for the purpose of making any Restricted Payment; provided, however,
that (a) wholly-owned Restricted Subsidiaries of the Borrowers and direct
wholly-owned Restricted Subsidiaries of the Parent Guarantor other than the
Borrowers may declare and pay dividends and other distributions on their shares
of Capital Stock to the Borrowers or the Parent Guarantor, as the case may be,
(b) so long as no Default or Event of Default has occurred and is continuing,
the Borrowers may declare and pay dividends or other distributions on their
shares of Capital Stock to the Parent Guarantor, and (c) the Parent Guarantor
and the Borrowers and other Restricted Subsidiaries may make payments of
principal and interest on Subordinated Indebtedness permitted to be made under
the subordination provisions relating to such Subordinated Indebtedness. The
provisions of this Section 6.18 shall be in addition to, and not in lieu of, any
restriction contained in the instrument evidencing, or the instrument of
subordination with respect to, any Subordinated Indebtedness.
6.19 Subsidiaries.
(a) Neither the Parent Guarantor nor any Borrower shall create or
acquire any direct or indirect Subsidiary, unless the Parent Guarantor or such
Borrower has (i) given the Administrative Agent and the Lenders not less than 30
days' prior written notice of its intention to create or acquire such Subsidiary
and (ii) provided to the Administrative Agent and each Lender such information
about such Subsidiary, its financial condition and its contemplated operations
as the Administrative Agent or such Lender may reasonably require.
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(b) The Parent Guarantor or the relevant Borrower shall cause each
Restricted Subsidiary created or acquired by it from time to time after the
Closing Date to execute and deliver to the Administrative Agent promptly and in
any event within 2 Business Days after it becomes a Restricted Subsidiary (i)
supplements to the Subsidiary Guarantee and the Security Agreement substantially
in the form annexed thereto and (ii) such other certificates, opinions,
documents and instruments (including UCC financing statements) as may be
reasonably requested by the Administrative Agent. The Parent Guarantor or the
relevant Borrower pledge all of the shares of Capital Stock of such Restricted
Subsidiary to the Administrative Agent for the benefit of the Lenders and the
Issuing Bank within such 2 Business Day period and, in connection with such
pledge, shall execute and deliver to the Administrative Agent within such period
such pledge agreements, stock powers and irrevocable proxies as the
Administrative Agent may reasonably require.
6.20 Leases.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, enter into any operating lease as lessee or
guarantee the obligations of any lessee under an operating lease; provided,
however, that so long as no Default or Event of Default has occurred and is
continuing and entering into such leases would not cause a Default or Event of
Default to occur, the Parent Guarantor, the Borrowers and the Restricted
Subsidiaries may enter into operating leases (including real estate leases)
which provide for total scheduled payments (including base rent, supplemental
rent and other amounts, however characterized) not exceeding $500,000 in the
aggregate for all such leases in any fiscal year.
6.21 Financial Covenants.
(a) The Parent Guarantor and the Borrowers shall not permit:
(i) the Consolidated Tangible Net Worth as at the end of any
fiscal quarter to be less than the Minimum Capital
Requirement;
(ii) the Consolidated Leverage Ratio as at the end of any fiscal
quarter to be more than 2.5 to 1;
(iii) the Consolidated Interest Coverage Ratio to be (i) less
than 0.9 to 1 for any Calculation Period ending on or
before September 30, 1997, (ii) less than 1.00 to 1 for any
Calculation Period ending after September 30, 1997 but
before October 1, 1998, (iii) less than 1.25 to 1 for any
Calculation Period ending after September 30, 1998 but
before October 1, 1999, or (iv) less than 1.50 to 1 for any
Calculation Period ending on or after October 1, 1999; or
(iv) the Consolidated Fixed Charge Coverage Ratio to be (i) less
than 0.9 to 1 for any Calculation Period ending on or before
June 30, 1998 or (ii) less than 1 to 1 for any Calculation
Period ending after June 30, 1998;
(b) As used in this Agreement, the following terms have the
following meanings:
"CALCULATION PERIOD": (x) in determining compliance with Financial
Covenants for any period ending prior to December 31, 1997, the period of three
consecutive fiscal quarters ended on September
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30, 1997, taken as a single fiscal period and (y) in determining compliance with
Financial Covenants for any period ending on or after December 31, 1997, each
period consisting of four consecutive fiscal quarters (irrespective of whether
they are part of the same fiscal year), taken as a single fiscal period.
"CONSOLIDATED EBITDA": with respect to any period, the Consolidated
Net Income for such period, plus Consolidated Interest Expense, provisions for
income taxes, depreciation and amortization (to the extent that such items were
included in the calculation of Consolidated Net Income for such period).
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": with respect to any
period, the ratio of (i) Consolidated EBITDA for such period, minus the
aggregate amount of Capital Expenditures incurred by the Parent Guarantor or any
Restricted Subsidiary (including the Borrowers but excluding any Unrestricted
Subsidiaries) during such period, and minus the aggregate amount of income taxes
actually paid during such period (to the extent such item was included in the
calculation of Consolidated EBITDA for such period), to (ii) the aggregate
amount of principal payable during such period (including principal payments due
in respect of the Loans and the Letters of Credit) in respect of the
Indebtedness of the Parent Guarantor or any Restricted Subsidiary (including the
Borrowers but excluding any Unrestricted Subsidiary), whether or not such
principal payments are actually made, plus Consolidated Interest Expense for
such period.
"CONSOLIDATED INTEREST COVERAGE RATIO": with respect to any period,
the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE": with respect to any period, the
aggregate amount of interest payable by the Parent Guarantor, the Borrowers and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP, during such period in respect of their respective Indebtedness
(including interest payable hereunder and imputed interest under Capital
Leases), whether or not actually paid.
"CONSOLIDATED LEVERAGE RATIO": with respect to any date, the ratio
of (a) total Indebtedness (other than Subordinated Debt) of the Parent Guarantor
and its consolidated Restricted Subsidiaries (including the Borrowers but
excluding any Unrestricted Subsidiaries) as at such date to (b) the sum of (i)
Consolidated Tangible Net Worth as at such date and (ii) consolidated
Subordinated Debt of the Parent Guarantor and its consolidated Restricted
Subsidiaries (including the Borrowers but excluding any Unrestricted
Subsidiaries) as at such date.
"CONSOLIDATED NET INCOME": with respect to any period, the net
income of the Parent Guarantor and its consolidated Restricted Subsidiaries
(including the Borrowers but excluding any Unrestricted Subsidiaries) for such
period, after provision for taxes and tax credits, determined on a consolidated
basis in accordance with GAAP. In no event shall the net income of any
Unrestricted Subsidiary be taken into account in calculating Consolidated Net
Income hereunder.
"CONSOLIDATED TANGIBLE NET WORTH": with respect to any date, (a) the
total of the amounts that would be shown on the consolidated balance sheet of
the Parent Guarantor and its Restricted Subsidiaries (including the Borrowers
but excluding any Unrestricted Subsidiaries) as at such date in accordance with
GAAP as the par or stated value of all outstanding shares of Capital Stock,
paid-in capital or capital surplus, and retained earnings (excluding, however,
the value of any treasury stock and any redeemable preferred stock or similar
capital stock), less (b) the sum of (x) any accumulated deficit that would be
shown on such balance sheet as at such date in accordance with GAAP, (y) the
total amount that would be shown on such balance sheet as at such date in
accordance with GAAP as goodwill, trademarks, trade
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names, patents, copyrights or other intangible assets, (z) the total amount that
would be shown on such balance sheet as at such date in accordance with GAAP as
Indebtedness from Affiliates. In no event shall the assets or capital of any
Unrestricted Subsidiary be taken into account in calculating Consolidated
Tangible Net Worth hereunder.
"MINIMUM CAPITAL REQUIREMENT": with respect to any date as of which
compliance with the financial covenant set forth in Section 6.21(a)(i) is to be
determined, (a) $6,000,000, plus (b) the Consolidated Net Income, if any, for
each fiscal quarter ending on or after the Closing Date and on or before such
determination date, minus (c) the aggregate amount of compensation paid by the
Parent Guarantor or any Restricted Subsidiary to Mr. Joseph Ende or members of
his immediate family (or any trust for their benefit) after the Closing Date but
on or before such determination date (to the extent such payment was permitted
under Section 6.23(a) and was not taken into account in determining Consolidated
Net Income). For purposes of calculating the Minimum Capital Requirement (but
not the actual Consolidated Tangible Net Worth), Consolidated Net Income for any
fiscal quarter during which the Parent Guarantor and its consolidated Restricted
Subsidiaries had a net loss (on a consolidated basis) shall be deemed to be zero
(0).
6.22 Capital Expenditures.
The Parent Guarantor and the Borrowers shall not, and shall not
permit any Restricted Subsidiary to, make any Capital Expenditures; provided,
however, that if immediately prior and after giving effect thereto no Default or
Event of Default shall exist, the Borrowers may make Capital Expenditures not
exceeding $300,000 in the aggregate in any fiscal year.
6.23 Compensation and Management Fees.
(a) The Parent Guarantor and the Borrowers shall not pay, or permit
any Restricted Subsidiary to pay, wages, salaries, bonuses, commissions, fees or
other compensation, however characterized, or provide benefits or perquisites
(other than health, insurance and other benefits that are provided to employees
generally) to Mr. Joseph Ende or any members of his immediate family (or any
trust for their benefit) in any fiscal year in excess of the sum of (i) $156,000
plus (ii) 20% of the Consolidated Net Income (exclusive of extraordinary income)
for such fiscal year.
(b) The Parent Guarantor and the Borrowers shall not pay, or permit
any Restricted Subsidiary to pay, any fees or other compensation to any Person
in respect of services rendered by such Person in connection with the management
or supervision of the management of any Obligor, except salaries, bonuses and
other compensation to employees of the Obligors in respect of such employment
(subject to the limitations set forth in paragraph (a) above).
6.24 Change in Fiscal Year or Fiscal Quarters.
The Parent Guarantor and the Borrowers shall not change their fiscal
year or the date on which any fiscal quarter ends.
6.25 Maintenance of Account.
(a) To facilitate the administration of this Agreement, the Parent
Guarantor, each Borrower and each Restricted Subsidiary shall establish a
non-interest bearing deposit account with NBC on or before
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the Closing Date and shall use and maintain such account as its principal
operating account so long as any Commitment is in effect or any Letter of Credit
is outstanding and until the payment in full of the Obligations.
(b) Neither the Parent Guarantor nor any Borrower shall, and they
shall not permit any Restricted Subsidiary to, maintain balances in excess of
$50,000 in the aggregate for all the Obligors with Ineligible Financial
Institutions.
6.26 Key-Man Policy.
The Parent Guarantor and the Borrowers shall deliver to the
Administrative Agent no later than January 12, 1998, an Assignment of Life
Insurance Policy as Collateral (the "Assignment of Key Man Policy"), duly
executed by the Obligor that owns such policy and countersigned by an authorized
officer of the issuer of such policy, pursuant to which the owner of such policy
shall assign to the Administrative Agent for the benefit of the Creditors, as
security for the Obligations, a policy of life insurance (the "Key Man Policy")
issued by an insurance company acceptable to the Administrative Agent on the
life of Mr. Joseph Ende in the amount of $3,000,000, together with a copy of
such policy.
ARTICLE 7
EVENTS OF DEFAULT
7.1 Events of Default.
If one or more of the following events (each, an "Event of Default")
shall occur:
(a) The Borrowers shall default in (i) the punctual payment when due
(whether at stated maturity or otherwise) of any principal of any Loan or the
punctual reimbursement when due (whether at the due date thereof or otherwise)
of any LC Disbursement or (ii) the punctual payment when due of any interest on
any Loan or LC Disbursement, any Fees or any other amounts payable by them
hereunder, under any Note or under any other Loan Document and, in the case of a
default in the payment of any amount specified in this clause (ii), such default
shall continue unremedied for more than three (3) Business Days after the due
date thereof; or
(b) Any Obligor shall default in the due observance or performance
of any term, covenant or agreement contained in Section 6.4(a) or Sections 6.10
through 6.26 (inclusive); or
(c) Any Obligor shall default in the due observance or performance
of any other term, covenant or agreement contained in this Agreement or any
other Loan Document on its part to be observed or performed and such default
shall continue unremedied for a period of 30 days after written notice thereof,
specifying such default and requiring it to be remedied, shall have been given
to the Parent Guarantor or any Borrower by the Administrative Agent; or
(d) Any representation or warranty made by any Obligor herein or in
any other Loan Document, or any statement or representation made in any
certificate, report or opinion delivered by any Obligor or any officer of an
Obligor pursuant to this Agreement or any other Loan Document shall prove to
have been incorrect or misleading in any material respect when made; or
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(e) The Obligors shall fail to make any payment when due (after
giving effect to any applicable grace periods) on any Material Indebtedness; or
any Material Indebtedness shall be accelerated or shall be required to be paid
prior to the stated maturity thereof or prior to any regularly scheduled dates
of payment, or shall be required to be purchased by any Obligor prior to its
stated maturity or regularly scheduled date of payment; or any Obligor shall
default in the performance of any term contained in, or any event or condition
shall exist under, any agreement or instrument pursuant to which it has
outstanding any Indebtedness if the effect of such default, event or condition
is to cause, or permit holder(s) of such Indebtedness to cause (i) any Material
Indebtedness to become due and payable prior to its stated maturity or regularly
scheduled dates of payment or (ii) any Obligor to be required to purchase or
otherwise acquire any Material Indebtedness. For purposes of this paragraph, the
term "MATERIAL INDEBTEDNESS" shall mean outstanding Indebtedness of one or more
Obligors aggregating at least $100,000; or
(f) Any Obligor shall be insolvent or shall generally cease paying,
or be unable to pay, its debts as they become due or shall make any admission in
writing to the foregoing effect; or a substantial part of the operations or
business of any Obligor shall be suspended and such suspension shall, in the
opinion of the Majority Lenders, have a material adverse effect on the condition
(financial or otherwise) or operations of the Parent Guarantor and the Borrowers
taken as a whole or on the ability of the Borrowers to repay the Obligations; or
any Obligor shall make an assignment for the benefit of creditors, or shall
commence (as debtor) a case under the Bankruptcy Code, or shall commence any
proceeding with respect to itself, or a substantial portion of its properties or
assets, under any other insolvency, bankruptcy, arrangement, reorganization,
liquidation, dissolution or similar law of the United States or any other
jurisdiction, or shall apply for a trustee, receiver or custodian (however
named) for all or a substantial portion of its properties or assets for the
purpose of general administration of such properties or assets for the benefit
of creditors or for any other purpose or shall take any action to authorize any
of the foregoing actions; or a court or competent jurisdiction in the premises
shall enter an order for relief against any Obligor as a debtor in a case or
proceeding under the Bankruptcy Code or any similar law of the United States or
any other jurisdiction; or any case or proceeding under the Bankruptcy Code or
any other insolvency, bankruptcy, reorganization, arrangement, liquidation,
dissolution or similar law of the United States or any other jurisdiction shall
be commenced against any Obligor and such case or proceeding shall remain
undismissed, undischarged or unbonded for 60 days or any Obligor shall consent
to or admit in writing the material allegations against it in any such case or
proceeding; or any trustee, receiver or similar officer, however named, shall be
appointed for all or a substantial part of the property of any Obligor and such
Obligor shall consent thereto or such trusteeship or receivership shall continue
for a period of 60 days; or
(g) One or more judgment or judgments for the payment of money the
uninsured portion of which exceeds in the aggregate $50,000 shall be rendered
against one or more Obligors, and shall not be stayed, released, discharged or
fully bonded within 60 days after the issuance thereof; or
(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 412 of the Code
or Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Obligor or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is reasonably likely to result in the termination of such Plan for
purposes of Title IV of ERISA (other than a standard termination pursuant to
Section 4041(b) of ERISA), (iv) any Single Employer Plan
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shall terminate for purposes of Title IV of ERISA, (v) any Obligor or any
Commonly Controlled Entity shall, or is reasonably likely to, incur any
liability in connection with a withdrawal from, or the insolvency (within the
meaning of Section 4245 of ERISA) or Reorganization of, a Multiemployer Plan,
(vi) the occurrence or expected occurrence of any event or condition which
results or is reasonably likely to result in such Obligor's or any Commonly
Controlled Entity's becoming responsible for any liability in respect of a
Former Plan, or (vii) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vii) above, such
event or condition, together with all other such events or conditions, if any,
could result in liability which could have a Material Adverse Effect; or
(i) The Parent Guarantor shall cease to own beneficially, directly
or indirectly, with full control thereof and free and clear of any Liens, 100%
of the shares of voting Capital Stock of any Borrower; or
(j) Mr. Joseph Ende shall die or shall cease for any reason to be
the chief executive officer of the Parent Guarantor or to perform the duties and
functions of chief executive officer of the Parent Guarantor; or
(k) Any Obligor shall assert, or institute any proceedings seeking
to establish, that any provision of any Loan Document is invalid, not binding or
unenforceable against it; or
(l) any Security Document shall cease to be in full force and effect
or shall cease to be effective to grant to the Administrative Agent for the
benefit of the Issuing Bank and the Lenders a perfected security interest in the
collateral described therein, with the priority purported to be created thereby;
then, upon the happening of any of the foregoing Events of Default or at any
time thereafter so long as any such Event of Default shall be continuing, the
Administrative Agent may, with the consent of the Majority Lenders, and shall,
if so instructed by the Majority Lenders, take any one or more of the following
actions: (1) terminate the Commitments, whereupon the Commitments shall
immediately terminate and/or (2) declare the outstanding principal amount of the
Loans and all interest accrued thereon, the reimbursement of the LC
Disbursements and all interest accrued thereon, and all fees and other amounts
payable hereunder or under any other Loan Document to be immediately due and
payable, whereupon said principal, interest, fees and other amounts shall become
immediately due and payable and/or (3) require that the Borrowers Cash
Collateralize all Letters of Credit then outstanding, whereupon cash collateral
in an amount equal to the aggregate stated amount of all Letters of Credit then
outstanding shall become immediately due and payable; provided, however, that
upon the happening of any event specified in clause (f) above the Commitments
shall immediately terminate and the Loans, the LC Disbursements, all accrued
interest thereon and all fees and other amounts payable hereunder or under any
other Loan Document, shall be immediately due and payable, and the Borrowers
shall immediately Cash Collateralize all Letters of Credit then outstanding, all
without declaration or other notice to the Borrowers.
7.2 Waivers.
The Borrowers hereby waive, to the extent permitted by applicable
law, (a) all presentments, demands for performance, notices of nonperformance
(except to the extent required by the provisions of this Agreement or of any
other Loan Document), protests, notices of protest, notices of intent to
accelerate and notices of dishonor in connection with the Notes and the Loans
and (b) any requirement of diligence
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or promptness on the part of the Administrative Agent in the enforcement of its,
the Issuing Bank's or the Lenders' rights under the provisions of this
Agreement, the Notes or any other Loan Document.
ARTICLE 8
THE ADMINISTRATIVE AGENT,
THE DOCUMENTARY COLLECTION AGENT
AND THE ISSUING BANK
8.1 Appointment of Administrative Agent.
Each Creditor hereby irrevocably designates and appoints NBC as the
Administrative Agent of such Creditor under this Agreement and the other Loan
Documents, and each Creditor irrevocably authorizes NBC, as the Administrative
Agent for such Creditor, to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Creditor, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
8.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or
attorneys-in-fact, and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
8.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except, in the case
of any Person, for its own gross negligence or willful misconduct and, in the
case of the Administrative Agent, for the gross negligence or willful misconduct
of its officers, directors or employees) or (ii) responsible in any manner to
any of the Creditors for any recitals, statements, representations or warranties
made by the Parent Guarantor, any Borrower, any other Guarantor, any of their
respective Subsidiaries or any officer of any of the foregoing contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Obligor to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Creditor to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrowers, any
of their respective Subsidiaries or any Guarantor.
8.4 Reliance by Administrative Agent.
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The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrowers or the Parent Guarantor), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified as between itself and the Creditors or any of them in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all present and future
Creditors.
8.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Creditor or the
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Creditors.
8.6 Non-Reliance on Administrative Agent and Other Creditors.
Each Creditor expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys,
attorneys-in-fact or Affiliates has made any representations or warranties to
it, including any representations or warranties regarding any Obligor, and that
no act by the Administrative Agent hereinafter taken, including any review of
the affairs of any Obligor, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Creditor. Each Creditor represents
to the Administrative Agent and the other Creditors that it has, independently
and without reliance upon the Administrative Agent or any other Creditor, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Obligors and made its
own decision to enter into this Agreement and make Loans and issue or
participate in Letters of Credit hereunder. Each Creditor also represents that
it will, independently and without reliance upon the Administrative Agent or any
other Creditor, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Obligors. Except for notices, reports and other
documents expressly required
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to be furnished to the Creditors by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Creditor with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Obligor which may come into the possession of the
Administrative Agent or any of its officers, directors, employees,
Administrative Agents, attorneys-in-fact or Affiliates.
8.7 Indemnification of Administrative Agent, Documentary Collection
Agent and Issuing Bank.
The Lenders agree to indemnify the Administrative Agent, the
Documentary Collection Agent and the Issuing Bank (each, a "Designee"), in their
respective capacities as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers under Section 9.2 of this
Agreement or under any other Loan Document to do so), ratably according to their
respective Percentages in effect on the date on which indemnification is sought
under this Section 8.7, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment in full of the Obligations) be
imposed on, incurred by or asserted against such Designee in any way relating to
or arising out of this Agreement, any other Loan Document or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Designee
under or in connection with any of the foregoing; provided, however, that (a) no
Lender shall be liable for the payment to any Designee of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Designee's gross negligence
or willful misconduct and (b) no Lender shall be liable for any payment to the
Documentary Collection Agent of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from (i) the extension by the Documentary Collection
Agent of credit to any Borrower other than as a Lender under this Agreement or
(ii) any payment made by the Documentary Collection Agent against drafts and
related shipping documents that have not been approved by the relevant Borrower.
The agreements in this Section 8.7 shall survive the payment of the Obligations
and the termination of the Commitments and the Letters of Credit.
8.8 Agents in Their Individual Capacity.
The Administrative Agent, the other branches of NBC, the Documentary
Collection Agent, and their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrowers as
though the Administrative Agent and the Documentary Collection Agent were not
the Administrative Agent and Documentary Collection Agent hereunder and under
the other Loan Documents. With respect to its Loans and LC Exposure hereunder
and any Notes issued to it, NBC shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lenders" and
"Creditors" shall include NBC and any other branches of NBC who may from time to
time be Lenders or Issuing Banks hereunder, in their individual capacity.
8.9 Successor Administrative Agent; Resignation of Documentary
Collection Agent.
(a) The Administrative Agent may resign as Administrative Agent upon
30 days' notice to the Lenders. If the Administrative Agent resigns as
Administrative Agent under this Agreement and the other Loan Documents, then the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Majority
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Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent that shall be a bank which has an office in New York and
has a combined capital and surplus of at least $500,000,000, whereupon such
successor Administrative Agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor Administrative Agent effective upon such appointment and approval, and
the retiring Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such retiring Administrative Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this Article 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
(b) The Documentary Collection Agent may resign as Documentary
Collection Agent at any time upon 10 days' notice to the Borrowers and the
Lenders, irrespective of whether a successor has been appointed.
ARTICLE 9
MISCELLANEOUS
9.1 Notices.
All notices, requests, demands, instructions, directions and other
communications provided for hereunder shall be in writing (which term shall
include telecopied communications) and shall be mailed (by registered or
certified mail, postage prepaid), telecopied or delivered to the applicable
party at the address or telecopier number specified for such party on Schedule I
or, as to any party, to such other address or telecopier number as such party
shall specify by a notice in writing to the other parties hereto delivered in
accordance with the provisions of this Section 9.1. Each notice, request,
demand, instruction, direction or other communication provided for hereunder
shall be deemed delivered (a) if by mail, five Business Days after being
deposited in the mails, addressed to the applicable party at its address set
forth above, (b) if by hand, when delivered to the applicable party at such
address, and (c) if by telecopy, when sent to the applicable party at such
telecopier number.
9.2 Expenses, Indemnity.
(a) The Borrowers hereby jointly and severally agree to pay,
promptly upon demand of the Administrative Agent, whether or not the
transactions contemplated hereby are consummated, the following fees,
disbursements, costs, expenses, taxes and charges: (i) the reasonable fees and
disbursements of counsel for the Administrative Agent in connection with the
preparation of this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby, (ii) the reasonable fees and disbursements of
counsel for the Administrative Agent in connection with any amendment,
supplement or modification of this Agreement or any other Loan Document, and any
consent or waiver hereunder or thereunder (or any such instrument which is
proposed but not executed and delivered); (iii) all reasonable costs and
expenses incurred by the Administrative Agent in connection with due diligence
or the syndication of the credit facilities contemplated hereby; (iv) all
reasonable expenses incurred by the Administrative Agent in connection with the
performance of any inspections, field examinations or audits performed by the
Administrative Agent or any of its Administrative Agents or representatives with
respect to the Parent Guarantor, any Borrower or any other Obligor, its books
and records, or any of its assets
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(including the inspections, examinations and audits referred to in Section 6.5)
and the preparation of reports with respect thereto; provided, however, that so
long as no Event of Default shall have occurred and be continuing, the Borrowers
shall not be obligated to pay hereunder audit fees in excess of $450 per day,
per auditor or in excess of $8,000 per year (plus expenses, in each case); and
(v) all recording and release taxes, all transfer taxes, all documentary, stamp,
intangible and similar taxes, all filing and recording fees and taxes, and any
other excise or property taxes, charges, or similar taxes imposed by the United
States of America, the jurisdiction in which any Lender's applicable lending
office is located or any political subdivision of any of the foregoing, at any
time payable in respect of this Agreement or any other Loan Document, the
incurrence of obligations hereunder and under the other Loan Documents, any
payment made hereunder or under any other Loan Document, or any documentary
collection services conducted pursuant hereto (collectively, the "Other Taxes").
The Borrowers further hereby jointly and severally agree to pay, promptly upon
demand by the Administrative Agent, the Documentary Collection Agent, the
Issuing Bank or any Lender, all expenses incurred by the Administrative Agent,
the Documentary Collection Agent, the Issuing Bank or any Lender in connection
with the enforcement or preservation of any of their respective rights and
remedies against any Obligor hereunder or under any other Loan Document,
including all costs of collection, all reasonable fees and disbursements of
outside counsel, all reasonable allocated costs of in-house counsel, and all
out-of-pocket expenses of the Administrative Agent, the Documentary Collection
Agent, the Issuing Bank and each Lender.
(b) The Borrowers hereby jointly and severally agree to indemnify
the Administrative Agent, the Documentary Collection Agent, the Issuing Bank,
each Lender, each Person, if any, controlling the Administrative Agent, the
Documentary Collection Agent, the Issuing Bank or any Lender, and each of their
respective directors, officers, employees, attorneys and agents (each of the
foregoing herein called an "Indemnitee") against, and to hold each Indemnitee
harmless from (i) any losses, liabilities, damages, claims, costs and expenses
(collectively, "Losses") suffered or incurred by such Indemnitee arising out of,
resulting from or in any manner connected with, the execution, delivery and
performance of this Agreement or any other Loan Document, the making or
maintenance of any Loans, the issuance or maintenance of or participation in any
Letter of Credit, the collection of Inventory pursuant to Section 2.11 or any
transaction related to or consummated in connection with this Agreement, the
Loans, the Letters of Credit or the collection of Inventory, including any
Losses suffered or incurred by such Indemnitee arising out of or related to the
violation of, noncompliance with or liability under, any Environmental Laws, any
securities laws or any orders, requirements or demands of Governmental
Authorities related thereto, or in investigating, preparing for, defending
against, or providing evidence, producing documents or taking any other action
in respect of any commenced or threatened litigation, administrative proceeding
or investigation, under any Environmental Laws, any securities laws or any other
statute of any jurisdiction, or any regulation, or at common law or otherwise,
other than Losses arising out of or relating to the gross negligence or willful
misconduct of such Indemnitee; (ii) any and all Losses (including, without
limitation, all reasonable fees and disbursements of counsel with whom any
Indemnitee may consult in connection therewith and all expenses of litigation or
preparation therefor) that any Indemnitee may incur or which may be asserted
against any Indemnitee in connection with any litigation or investigation
involving or relating to the Parent Guarantor, any Borrower, any of their
respective Subsidiaries, any of their respective officers, directors, employees
or agents, or any of their respective assets, other than Losses arising out of
the gross negligence or willful misconduct of such Indemnitee; and (iii) the
full amount of any Other Taxes paid by the Administrative Agent, the Documentary
Collection Agent, the Issuing Bank or any Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Other Taxes were correctly or legally asserted, which relate
to this Agreement or any other Loan Document, the credit facilities provided
hereunder or the documentary collection services referred to in Section 2.11.
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(c) The covenants contained in clauses (a) and (b) of this Section
9.2 shall be in addition to any other obligations or liabilities of the
Borrowers to the Administrative Agent, the Documentary Collection Agent, the
Issuing Bank and the Lenders hereunder, under any other Loan Document, or at
common law or otherwise and shall survive the termination of the Commitments,
the expiration of the Letters of Credit and the repayment of the Obligations.
9.3 Amendments and Waivers.
Neither this Agreement nor any other Loan Document, nor any terms
hereof or thereof may be amended, supplemented or modified except in accordance
with the provisions of this Section 9.3. The Majority Lenders may or, with the
written consent of the Majority Lenders, the Administrative Agent may, from time
to time, (x) enter with the Obligors or any of them into written amendments,
supplements or modifications hereto or to any other Loan Document or (y) waive
at any Obligor's request, on such terms and conditions as the Majority Lenders
or the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or any other Loan Document or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (a) (i)
reduce the outstanding principal amount or extend the scheduled date of maturity
of any Loan or of any scheduled installment or mandatory prepayment thereof,
(ii) reduce the stated rate of interest or fees payable hereunder or extend the
scheduled date of any payment thereof, (iii) increase the amount or extend the
expiration date of any Commitment of any Lender, (iv) change the percentage
specified in the definition of Majority Lenders or amend, modify or waive any
provision of Section 6.13, this Section 9.3 or Section 9.6(b) or (c), (v)
consent to the assignment or transfer by any Obligor of any of its rights and
obligations under this Agreement or any other Loan Document, to the release or
termination of any Guarantee or to the release of all or substantially all of
the Collateral, in each case without the prior written consent of all the
Lenders, (b) amend, modify or waive any provision of Section 2.10 or otherwise
affect the rights or duties of the Issuing Bank without the prior written
consent of the Issuing Bank, (c) amend, modify or waive any provision of Article
8 or otherwise affect the rights or duties of the Administrative Agent without
the prior written consent of the Administrative Agent or (d) amend, modify or
waive any provision of Section 2.11 or otherwise affect the rights or duties of
the Documentary Collection Agent without the prior written consent of the
Documentary Collection Agent. Any waiver and any amendment, supplement or
modification pursuant to this Section 9.3 shall apply to the Issuing Bank and
each of the Lenders and shall be binding upon the Obligors, the Issuing Bank,
the Lenders and the Administrative Agent and all future Lenders. Any waiver
granted hereunder shall be effective only in the specific instance and for the
specific purpose for which given.
9.4 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
the Administrative Agent, the Issuing Bank or any Lender, any right, remedy,
power or privilege hereunder or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.5 Survival of Representations and Warranties.
All representations and warranties made herein or in any other Loan
Document (or in any amendment, modification or supplement hereto or thereto) and
in any certificate delivered pursuant hereto
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or thereto shall survive the execution and delivery of this Agreement and the
other Loan Documents and the making of the Loans and issuance of the Letters of
Credit hereunder.
9.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Parent Guarantor, the Lenders, the Issuing Bank, the
Administrative Agent, all future Lenders and their respective successors and
permitted assigns, except that neither the Parent Guarantor nor any Borrower may
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Issuing Bank and each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time, (i) sell to any of its Affiliates, to any other Lender, or to any
Affiliate of another Lender or (ii) with the prior written consent of all the
other Lenders, sell to any other bank or financial institution (each, a
"Participant"), participating interests in the Loans owing to, and the LC
Exposure of, such Lender, the Notes held by such Lender or any other interest of
such Lender hereunder and under the other Loan Documents; provided that no such
participating interests shall be in an aggregate principal amount of less than
$1,000,000. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any Loans made by it, any Notes issued to it, and any participations
in Letters of Credit sold to it, hereunder for all purposes of this Agreement
and the other Loan Documents, and the Borrowers, the Issuing Bank, the other
Lenders and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. Any agreement pursuant to which any
Lender shall sell any such participating interest shall provide that such Lender
shall retain the sole right and responsibility to exercise such Lender's rights
and enforce the Borrower's obligations hereunder, including the right to consent
to any amendment, supplement, modification or waiver of any provision of this
Agreement or any other Loan Document, provided that such participation agreement
may provide that without the consent of the Participant such Lender will not
agree to any amendment or modification which requires the consent of all the
Lenders under Section 9.3. The Borrowers and the Parent Guarantor agree that
each Lender shall be entitled to the benefits of Sections 3.3, 3.4 and 3.5
without regard to whether it has granted any participating interests, and that
all amounts payable to a Lender under Sections 3.3 and 3.4 shall be determined
as if such Lender had not granted any such participating interests. The
Borrowers and the Parent Guarantor agree that each Participant shall have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that such Participant shall only be entitled to
such right of setoff if it shall have agreed in the agreement pursuant to which
it shall have acquired its participating interest to share with the Lenders the
proceeds thereof as provided in Section 9.7.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time, (i) assign to any of its Affiliates, to any other Lender or to any
Affiliate of another Lender or (ii) with the prior written consent of all the
other Lenders, assign to any other bank or financial institution (each, an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents, including its Loans, its LC Exposure and its
Commitments pursuant to an Assignment and Acceptance, substantially in the form
of Exhibit J, executed by such Assignee, such assigning Lender, the
Administrative Agent and the Issuing Bank and
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delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that each such transfer to an Assignee shall be in an
aggregate principal amount of $1,000,000 or any larger amount that is a whole
multiple of $1,000,000 (or, if less, the full amount of such assigning Lender's
Loans). Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Loans as set forth therein, and (y) the assigning Lender
thereunder shall be released from its obligations under this Agreement to the
extent that such obligations shall have been expressly assumed by the Assignee
pursuant to such Assignment and Acceptance (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall cease
to be a party hereto; provided, however, that, notwithstanding such assignment,
the provisions of Sections 3.3, 3.4, 3.5 and 9.2 shall continue to inure to the
benefit of such Lender as to any payments made to, any costs or reductions
affecting, and any actions taken or omitted to be taken by, such Lender prior to
the effective date of such assignment). Notwithstanding the foregoing, no
Assignee which as of the date of any assignment to it pursuant to this Section
9.6(c) would be entitled to receive any greater payment under Section 3.3 or 3.4
than the assigning Lender would have been entitled to receive as of such date
under such Sections with respect to the rights assigned, shall be entitled to
receive such greater payments unless the Borrowers have consented in writing to
the assignment.
(d) The Administrative Agent shall maintain at its address referred
to on Schedule I a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitments of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Obligors, the Administrative Agent, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loans recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers, the
Issuing Bank or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, an Assignee, the Issuing Bank and the Administrative Agent,
together with payment by the assigning Lender to the Administrative Agent of a
registration and processing fee of $2,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto (which date shall be no earlier than 5 Business Days
after the Administrative Agent's receipt of such Assignment and Acceptance)
record the information contained therein in the Register and give prompt notice
of such acceptance and recordation to the Lenders, the Issuing Bank and the
Borrowers. On or prior to such effective date, the assigning Lender shall
surrender any outstanding Notes held by it, and each Borrower, at its own
expense, shall execute and deliver to the Administrative Agent, if so requested
by the Assignee, one or more new Notes, to the order of such Assignee in an
aggregate amount equal to the portion of the assigning Lender's Loans that are
being acquired by such Assignee and, if the assigning Lender has retained a
portion of its Loans hereunder and requests such Notes, one or more new Notes,
to the order of the assigning Lender in an amount equal to the amount of the
Loans retained by it. Such new Notes shall be dated the effective date of such
assignment and shall otherwise be in the form of the Notes replaced thereby. The
Notes surrendered by the assigning Lender shall be returned by the
Administrative Agent to the Borrowers marked "canceled".
(f) Notwithstanding anything to the contrary set forth in this
Section 9.6, no Lender may assign or sell a participating interest in any of its
Loans, any of its Notes or any of its obligations under
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this Agreement or any other Loan Document to any Obligor or any Affiliate of an
Obligor without the prior written consent of all the Lenders.
(g) The Borrowers and the Parent Guarantor authorize each Lender to
disclose to any Participant or Assignee (each, a "Transferee") and any
prospective Transferee, any and all financial information in such Lender's
possession concerning any Obligor which has been delivered to such Lender by or
on behalf of such Obligor pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of such Obligor in connection with such Lender's
credit evaluation of such Obligor prior to becoming a party to this Agreement.
(h) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 9.6, any Lender may assign or
pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular relating thereto.
9.7 Adjustments; Set-off.
(a) If any Lender (a "Benefitted Lender") shall at any time receive
any payment of all or part of any of its Loans, its LC Exposure or interest on
any of the foregoing (whether voluntarily or involuntarily, through the exercise
of the right of set-off or banker's lien, pursuant to any events or proceedings
of the nature referred to in Section 7.1(f), or otherwise), in a greater
proportion than any such payment to any other Lender, if any, in respect of such
other Lender's Loans, its LC Exposure or interest on any of the foregoing, such
Benefitted Lender shall purchase for cash from each other Lender a participating
interest in such portion of each such other Lender's Loans, LC Exposure and
interest thereon, as shall be necessary to cause such Benefitted Lender to share
the excess payment ratably with each of the Lenders; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Issuing Bank and
the Lenders provided by law, the Issuing Bank and each Lender shall have the
right, without prior notice to the Parent Guarantor or any Borrower, any such
notice being expressly waived by the Parent Guarantor and each Borrower, to the
extent permitted by applicable law, upon the occurrence of an Event of Default
to set off and appropriate and apply against any amount then due and payable by
the Parent Guarantor or any Borrower to the Issuing Bank or such Lender
hereunder or under any other Loan Document, any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Issuing Bank or such Lender or any branch or agency thereof to or
for the credit or the account of the Parent Guarantor or any Borrower.
9.8 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
9.9 JUDICIAL PROCEEDINGS.
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(A) THE PARENT GUARANTOR AND EACH BORROWER HEREBY EXPRESSLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ALL FEDERAL AND STATE COURTS SITTING IN THE
CITY OF NEW YORK, STATE OF NEW YORK IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY INSTRUMENT
OR DOCUMENT RELATING HERETO OR THERETO, AND, IN CONNECTION WITH ANY SUCH ACTION,
SUIT OR PROCEEDING, AGREES THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER
APPLICATION TO ANY OF SAID COURTS OR A JUDGE THEREOF MAY BE SERVED UPON THE
PARENT GUARANTOR OR SUCH BORROWER WITHIN OR WITHOUT SUCH COURT'S JURISDICTION BY
REGISTERED OR CERTIFIED MAIL, AT THE ADDRESS OF THE PARENT GUARANTOR OR SUCH
BORROWER SPECIFIED ON SCHEDULE I (OR AT SUCH OTHER ADDRESS AS THE PARENT
GUARANTOR OR SUCH BORROWER SHALL SPECIFY BY A PRIOR NOTICE IN WRITING DELIVERED
TO THE ADMINISTRATIVE AGENT IN ACCORDANCE WITH SECTION 9.1), PROVIDED THAT A
REASONABLE TIME FOR APPEARANCE IS ALLOWED.
(B) THE PARENT GUARANTOR AND EACH BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BROUGHT IN ANY FEDERAL OR STATE COURT SITTING IN THE CITY OF
NEW YORK, STATE OF NEW YORK AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
(C) NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR ANY LENDER MAY SUE THE PARENT GUARANTOR OR ANY BORROWER IN ANY
JURISDICTION WHERE THE PARENT GUARANTOR OR SUCH BORROWER, OR ANY ASSETS OF THE
PARENT GUARANTOR OR SUCH BORROWER, MAY BE FOUND AND MAY SERVE LEGAL PROCESS UPON
THE PARENT GUARANTOR OR ANY BORROWER IN ANY OTHER MANNER PERMITTED BY LAW.
9.10 WAIVER OF JURY TRIAL.
THE PARENT GUARANTOR, EACH BORROWER, THE ISSUING BANK, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND AGREE THAT ANY SUCH DISPUTE SHALL BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
9.11 Further Assurances.
At any time and from time to time, upon the request of the
Administrative Agent, the Parent Guarantor and the Borrowers shall execute,
deliver and acknowledge, or cause to be executed, delivered and acknowledged,
such further documents and instruments, and shall take or refrain from taking
such other action, as the Administrative Agent may reasonably request in order
to fully effect the purposes of this Agreement, the other Loan Documents and any
other agreements, instruments and documents delivered pursuant hereto or in
connection with the Loans or the Letters of Credit.
9.12 Integration Clause.
This Agreement and the other Loan Documents embody the entire
agreement and understanding among the Parent Guarantor, the Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders and supersede all prior
agreements and understandings, whether written or oral, between the parties
hereto relating to the subject matter of this Agreement.
9.13 Severability.
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If any part of this Agreement is contrary to, prohibited by, or
deemed invalid under, any applicable law of any jurisdiction, such provision
shall, as to such jurisdiction, be inapplicable and deemed omitted to the extent
so contrary, prohibited or invalid, without invalidating the remainder hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
9.14 Counterparts.
This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute one and the same agreement. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
9.15 Acknowledgments.
The Parent Guarantor and each Borrower hereby acknowledges that:
(a) it has been represented and advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor the Issuing Bank nor any
Lender has any fiduciary relationship with or duty to the Parent Guarantor or
any Borrower arising out of or in connection with this Agreement or any other
Loan Document, and the relationship between Administrative Agent, the Issuing
Bank and the Lenders, on one hand, and the Parent Guarantor and the Borrowers,
on the other hand, in connection herewith or therewith is solely that of
creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders, the Issuing Bank or the Administrative Agent or among the
Parent Guarantor and/or any Borrower on the one hand and any of the Lenders, the
Issuing Bank or the Administrative Agent on the other.
9.16 Joint and Several Obligations.
(a) All obligations of the Borrowers hereunder, under the Note and
under the other Loan Documents shall be joint and several, each Borrower being
fully liable for all obligations of all of the Borrowers hereunder and
thereunder.
(b) Each of ABS and Quality hereby appoints Sanyo as its
Administrative Agent for the purpose of executing and delivering Notices of
Borrowing, Notices of Conversion or Continuation, Letter of Credit Applications
or any other notice hereunder or under any other Loan Document. Such appointment
may not be revoked, and the Administrative Agent and the Creditors may rely, on
and take actions hereunder based upon, the continued effectiveness of such
appointment, until the Obligations have been indefeasibly paid in full in cash,
the Commitments have been terminated and all Letters of Credit have expired. Any
Notice of Borrowing, Notice of Conversion or Continuation, LC Application or
other notice or request relating to the extension of Loans or the issuance of
Letters of Credit hereunder that has been executed by one or more Borrowers or
by Sanyo (whether or not such notice states that is being delivered by Sanyo in
its capacity as Borrowers' Administrative Agent) shall be deemed delivered by
all of the Borrowers jointly and severally, and all Loans and Letters of Credit
requested therein shall be deemed to have been requested by all of the Borrowers
jointly and severally.
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(c) Each Borrower acknowledges that the handling of the credit
facility contemplated hereby on a joint borrowing basis as set forth in this
Agreement is solely an accommodation to the Borrowers and is done at their
request and agrees that neither the Administrative Agent nor any Creditor shall
have any responsibility to inquire into the use, apportionment, allocation or
disposition of any Loan or Letter of Credit or the proceeds thereof. The
Borrowers expect to derive substantial benefit, directly and indirectly, from
the credit facility contemplated hereby and the credit extended by the Issuing
Bank and the Lenders to the Borrowers thereunder.
(d) Each Borrower (a "Contributing Borrower") agrees (subject to
paragraph (e) below) that, in the event a payment shall be made by any other
Borrower (the "Claiming Borrower") in respect of the Obligations, or assets of
any other Borrower shall be sold pursuant to any Security Document to satisfy a
claim of any Creditor, the Contributing Borrower shall indemnify the Claiming
Borrower in an amount equal to the amount of such payment, or the greater of the
book value or the fair market value of such assets, as the case may be, in each
case multiplied by a fraction of which the numerator shall be the net worth of
the Contributing Borrower on the date hereof and the denominator shall be the
aggregate net worth of all the Borrowers on the date hereof.
(e) Notwithstanding any provision of this Agreement to the contrary,
all rights of the Borrowers under this Section 9.16 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall
be fully subordinated to and shall not be paid until the indefeasible payment in
full in cash of the Obligations. No failure on the part of any Borrower to make
the payments required by this Section 9.16 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any other Borrower with respect to the Obligations, and each
Borrower shall remain liable for the full amount of all the Obligations.
(f) Anything contained herein to the contrary notwithstanding the
obligations of each Borrower hereunder shall be limited to a maximum aggregate
amount equal to the greatest amount that would not render such Borrower's
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "FRAUDULENT TRANSFER
LAWS"), in each case after giving effect to all other liabilities of such
Borrower, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such Borrower
in respect of (a) intercompany Indebtedness to the Parent Guarantor or any of
the Parent Guarantor's Subsidiaries, including the other Borrowers and (b)
liabilities of such Borrower that are subordinated in right of payment to the
Obligations) and after giving effect as assets to the value (as determined under
the applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of such
Borrower pursuant to applicable law, the provisions of this Agreement, or any
other agreement providing for an equitable allocation among such Borrower and
the other Borrowers or any other Affiliates of such Borrower.
(g) The joint and several obligations of the Borrowers described in
this Subsection shall remain in full force and effect without regard to and
shall not be released, affected or impaired by: (i) any amendment, assignment,
transfer, modification of or addition or supplement to the Obligations, this
Agreement or any other Loan Document; (ii) any extension, indulgence, increase
in the Obligations or other action or inaction in respect of any of the Loan
Documents or otherwise with respect to the Obligations, or any acceptance of
security for, or guaranties of, any of the Obligations or loan documents, or any
surrender, release, exchange, impairment or alteration of any such security or
guaranties including without limitation the failing to perfect a security
interest in any such security; (iii) any default by any
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Borrower under, or any lack of due execution, invalidity or unenforceability of,
or any irregularity or other defect in, any of the Loan Documents; (iv) any
waiver by the Administrative Agent or any Creditor or any other Person of any
required performance or otherwise of any condition precedent or waiver of any
requirement imposed by any of the Loan Documents, any guaranties or otherwise
with respect to the Obligations; (v) any exercise or non-exercise of any right,
remedy, power or privilege in respect of this Agreement or any of the other Loan
Documents; (vi) any sale, lease, transfer or other disposition of the assets of
any Borrower or any consolidation or merger of any Borrower with or into any
other person, corporation, or entity, or any transfer or other disposition by
any Borrower or any other holder of any shares of capital stock of any Borrower,
(vii) any bankruptcy, insolvency, reorganization or similar proceedings
involving or affecting any Borrower, (viii) the release or discharge of any
Borrower from the performance or observance of any agreement, covenant, term or
condition under any of the Obligations or contained in any of the Loan Documents
by operation of law; or (ix) any other cause whether similar or dissimilar to
the foregoing which, in the absence of this provision, would release, affect or
impair the obligations, covenants, agreements and duties of any Borrower
hereunder, including without limitation any act or omission by the
Administrative Agent or any Creditor or any other any Person which increases the
scope of such Borrower's risk; and in each case described in this paragraph
whether or not any Borrower shall have notice or knowledge of any of the
foregoing, each of which is specifically waived by each Borrower. Each Borrower
warrants to the Administrative Agent and the Creditors that it has adequate
means to obtain from each other Borrower on a continuing basis information
concerning the financial condition and other matters with respect to each other
Borrower and that it is not relying on the Administrative Agent or any Creditor
to provide such information either now or in the future.
ARTICLE 10
PARENT GUARANTEE
10.1 Guarantee.
The Parent Guarantor hereby irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, the due and
punctual payment and performance in full of the Obligations. The Parent
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent by it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation.
10.2 Agreement to Pay; Subordination.
In furtherance of the foregoing and not in limitation of any other
right that the Administrative Agent or any other Creditor has at law or in
equity against the Parent Guarantor by virtue hereof, upon the failure of any
Borrower to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, the Parent
Guarantor hereby promises to and will forthwith pay to the Administrative Agent
in cash the amount of such unpaid Obligations. Upon payment by the Parent
Guarantor of any sums to the Administrative Agent as provided above, all rights
of the Parent Guarantor against any Borrower arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, with
respect to any indebtedness of the Borrowers now or hereafter held by the Parent
Guarantor, after the occurrence and during the continuance of an Event of
Default, no payment (whether of principal or interest, and whether before, after
or in connection with any dissolution, winding up, liquidation or reorganization
or receivership proceeding or upon an assignment for the benefit of creditors or
any other marshalling of the
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assets and liabilities of the Borrowers) may be made, directly or indirectly, on
such indebtedness until all the Obligations have been indefeasibly paid in full
in cash. If any amount shall erroneously be paid to the Parent Guarantor on
account of (i) such subrogation, contribution, reimbursement, indemnity or
similar right or (ii) any such indebtedness of the Borrowers, such amount shall
be held in trust for the benefit of the Creditors and shall forthwith be paid to
the Administrative Agent to be credited against the payment of the Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement.
10.3 Guarantee of Payment.
The Parent Guarantor hereby agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Administrative Agent or any other Creditor
to any Borrower, any other guarantor of the Obligations, any of the security
held for payment of the Obligations or any balance of any deposit account or
credit on the books of the Administrative Agent or any other Creditor in favor
of the Borrowers or any other person.
10.4 No Discharge or Diminishment of Guarantee.
The obligations of the Parent Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than the indefeasible payment in full in cash of the Obligations),
including any claim of waiver, release, surrender, alteration or compromise of
any of the Obligations, and to the fullest extent permitted by law, shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of the Parent Guarantor hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or any
other Creditor to assert any claim or demand or to enforce any remedy under this
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
the Parent Guarantor or that would otherwise operate as a discharge of a
guarantor as a matter of law or equity (other than the full, final and
indefeasible payment in full in cash of all the Obligations).
10.5 Defenses of Borrowers Waived.
To the fullest extent permitted by applicable law, the Parent
Guarantor waives any defense based on or arising out of any defense of the
Borrowers or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation for any cause of the liability of the Borrowers,
other than the final and indefeasible payment in full in cash of the
Obligations. The Administrative Agent and the other Creditors may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrowers or any other guarantor or exercise any other
right or remedy available to them against the Borrowers or any other guarantor,
without affecting or impairing in any way the liability of the Parent Guarantor
hereunder except to the extent the Obligations have been fully, finally and
indefeasibly paid in cash. Pursuant to applicable law, the Parent Guarantor
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of the Parent Guarantor
against the Borrowers or any other guarantor, as the case may be, or any
security.
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SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers, as of the day and year first
above written.
Borrowers:
SANYO AUTOMOTIVE PARTS, LTD.
By:_______________________________
Name: Marc J. Ruskin
Title:
ABS BRAKES, INC.
By:_______________________________
Name: Marc J. Ruskin
Title:
QUALITY FIRST BRAKE, INC.
By:_______________________________
Name: Marc J. Ruskin
Title:
Parent Guarantor:
BRAKE HEADQUARTERS U.S.A., INC.
By:_______________________________
Name: Marc J. Ruskin
Title:
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Creditors:
NATIONAL BANK OF CANADA,
NEW YORK BRANCH, as
Administrative Agent, as
Issuing Bank and as a
Lender
By:_______________________________
Name: Teresa Carrasco
Title: Vice President
By:_______________________________
Name: Jerry Salese
Title: Vice President
BANK LEUMI TRUST COMPANY OF NEW YORK,
as Documentary Collection Agent and as
a Lender
By:_______________________________
Name: Rissa Gosset
Title:
By:_______________________________
Name:
Title:
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EXHIBIT 2.2
OMITTED SCHEDULES AND EXHIBITS
Set forth below is a list of omitted Schedules and Exhibits to the
Credit Agreement, filed as Exhibit 2.1 to the Current Report on Form 8-K. Copies
of any of the Omitted Schedules and Exhibits will be provided to the SEC upon
request.
Schedule No. Description
Schedule I Schedule of Commitments and Percentages
Schedule II Schedule of Offices and Addresses for Notices
Schedule III Disclosure Schedule
Exhibit No. Description
Exhibit A Form of Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion or Continuation
Exhibit C Form of Extension Request
Exhibit D Form of Security Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Subsidiary Guarantee
Exhibit G Form of Opinion of Counsel
Exhibit H Form of Borrowing Base Certificate
Exhibit I Form of Assignment and Acceptance Agreement
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