Financing Agreement - The CIT Group/Business Credit Inc. and eMerge Interactive Inc.
FINANCING AGREEMENT
THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME, as Lenders
THE CIT GROUP/BUSINESS CREDIT, INC., as Agent
AND
EMERGE INTERACTIVE, INC., as Borrower
DATED: AUGUST 24, 2001
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS......................................................... - 1 -
SECTION 2. CONDITIONS PRECEDENT............................................... - 20 -
2.1. Conditions Precedent to Initial Loan......................... - 20 -
2.2. Conditions to All Extensions of Credit....................... - 21 -
SECTION 3. CREDIT FACILITIES.................................................. - 22 -
3.1. Revolving Loan Commitment.................................... - 22 -
3.2. [Reserved]................................................... - 23 -
3.3. Letter of Credit Facility.................................... - 23 -
SECTION 4. INTEREST, FEES AND CHARGES...................................... - 28 -
4.1. Interest .................................................... - 28 -
4.2. Fees ........................................................ - 31 -
4.3. Computation of Interest and Fees............................. - 32 -
4.4. Reimbursement of Expenses.................................... - 32 -
4.5. Bank Charges................................................. - 33 -
4.6. Illegality................................................... - 33 -
4.7. Increased Costs.............................................. - 33 -
4.8. Capital Adequacy............................................. - 35 -
4.9. Funding Losses............................................... - 35 -
SECTION 5. LOAN ADMINISTRATION................................................ - 36 -
5.1. Manner of Borrowing Revolving Loans.......................... - 36 -
5.2. Special Provisions Governing LIBOR Loans..................... - 41 -
5.3. Repayment of Revolving Loans................................. - 41 -
5.4. Payment of Other Obligations................................. - 42 -
5.5. Application of Payments and Collections...................... - 42 -
5.6. All Loans to Constitute One Obligation....................... - 43 -
5.7. Marshalling; Payments Set Aside.............................. - 43 -
5.8. Agent's Allocation of Payments and Collections............... - 43 -
5.9. Loan Accounts; The Register; Account Stated.................. - 44 -
5.10. Gross Up for Taxes........................................... - 45 -
5.11. Withholding Tax Exemption.................................... - 45 -
SECTION 6. TERM AND COMMITMENT TERMINATION.................................... - 45 -
6.1. Original Term of Commitments................................. - 45 -
6.2. Termination.................................................. - 46 -
SECTION 7. COLLATERAL SECURITY................................................ - 47 -
7.1. Grant of Security Interest in Collateral..................... - 47 -
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7.2. Lien on Deposit Accounts..................................... - 48 -
7.3. Other Collateral............................................. - 48 -
7.4. Lien Perfection; Further Assurances.......................... - 48 -
SECTION 8. COLLATERAL ADMINISTRATION.......................................... - 49 -
8.1. General...................................................... - 49 -
8.2. Administration of Accounts................................... - 50 -
8.3. Payment of Charges........................................... - 51 -
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS.......................... - 51 -
9.1. General Representations and Warranties....................... - 51 -
9.2. Affirmative Covenants........................................ - 53 -
9.3. Delivery of Financial Statements; Etc........................ - 54 -
9.4. Negative Covenants........................................... - 55 -
SECTION 10. FINANCIAL COVENANTS............................................... - 56 -
SECTION 11. EVENTS OF DEFAULT; REMEDIES....................................... - 57 -
11.1. Events of Default............................................ - 57 -
11.2. Acceleration of Obligations; Termination of Commitments..... - 59 -
11.3. Other Remedies.............................................. - 59 -
SECTION 12. AGENT............................................................. - 60 -
12.1. Appointment; Authority and Duties of Agent................... - 60 -
12.2. Agreements Regarding Collateral.............................. - 62 -
12.3. Reliance of Agent............................................ - 63 -
12.4. Action Upon Default.......................................... - 63 -
12.5. Ratable Sharing.............................................. - 64 -
12.6. Indemnification of Agent..................................... - 64 -
12.7. Limitation on Responsibilities of Agent...................... - 65 -
12.8. Successor Agent and Co-Agents................................ - 66 -
12.9. Consents; Amendments and Waivers; Out-of-Formula Loans....... - 67 -
12.10. Due Diligence and Non-Reliance............................... - 69 -
12.11. Representations and Warranties of Lenders.................... - 70 -
12.12. The Required Lenders......................................... - 70 -
12.13. Several Obligations.......................................... - 70 -
12.14. Agent in its Individual Capacity............................. - 70 -
12.15. No Third Party Beneficiaries................................. - 71 -
12.16. Notice of Transfer........................................... - 71 -
12.17. Replacement of Certain Lenders............................... - 71 -
12.18. Remittance of Payments and Collections....................... - 72 -
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SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.............. - 72 -
13.1. Successors and Assigns....................................... - 72 -
13.2. Participations............................................... - 73 -
13.3. Assignments.................................................. - 74 -
13.4. Tax Treatment................................................ - 75 -
SECTION 14. MISCELLANEOUS..................................................... - 75 -
14.1. Power of Attorney............................................ - 75 -
14.2. General Indemnity............................................ - 76 -
14.3. Survival of All Indemnities.................................. - 77 -
14.4. Modification of Agreement.................................... - 77 -
14.5. Severability................................................. - 77 -
14.6. Cumulative Effect; Conflict of Terms......................... - 77 -
14.7. Execution in Counterparts.................................... - 77 -
14.8. Agent's or Required Lenders' Consent......................... - 77 -
14.9. Notices...................................................... - 77 -
14.10. Performance of Borrower's Obligations........................ - 78 -
14.11. Credit Inquiries............................................. - 78 -
14.12. Time of Essence.............................................. - 78 -
14.13. Entire Agreement; Appendix A; Exhibits and Schedules......... - 78 -
14.14. Interpretation............................................... - 79 -
14.15. Obligations Several.......................................... - 79 -
14.16. Governing Law; Consent to Forum.............................. - 79 -
14.17. Waivers by Borrower.......................................... - 80 -
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FINANCING AGREEMENT
THIS FINANCING AGREEMENT is made on August 24, 2001, by and among EMERGE
INTERACTIVE, INC., a Delaware corporation with a principal place of business at
10315 102nd Terrace, Sebastian, Florida 32958 ("Borrower"); the various
financial institutions listed on the signature pages hereof and their respective
successors and permitted assigns which become "Lenders" as provided herein; and
THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation, with an office
located at 1200 Ashwood Parkway, Suite 150, Atlanta, Georgia 30338, in its
capacity as collateral and administrative agent for the Lenders pursuant to
SECTION 12 hereof (together with its successors in such capacity, "Agent").
SECTION 1. DEFINITIONS
Account Debtor shall mean any Person who is or may become obligated under
or on account of an Account.
Account Formula Amount shall mean, on any date of determination thereof, an
amount equal to 80% of the net amount of Eligible Accounts outstanding at such
date. For purposes hereof, the net amount of Eligible Accounts at any time shall
be the face amount of such Eligible Accounts, less any and all returns, rebates,
discounts (which may, at Agent's option, be calculated on shortest terms),
credits, allowances, and sales or excise taxes of any nature at any time issued,
owing, claimed by an obligor on an Account, granted, outstanding or payable in
connection with such Accounts at such time.
Accounts shall have the meaning given to "account" in the UCC.
Accounts Collateral shall mean all Accounts of Borrower and all right,
title and interest of Borrower in or to any returned Goods the sale or other
disposition of which gave rise to an Account, together with all rights, titles,
securities and guarantees with respect to any Account, including any rights to
stoppage in transit, replevin, reclamation and resales, and all related security
or Liens, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter created, arising or acquired.
Adjusted LIBOR Rate means, with respect to each Interest Period for a LIBOR
Loan, an interest rate per annum (rounded upwards, to the next 1/8th of 1%)
equal to the quotient of (a) the LIBOR Rate in effect for such Interest Period
divided by (b) a percentage (expressed as a decimal) equal to 100% minus
Statutory Reserves.
Administrative Management Fee shall mean the fee which shall be paid to
Agent in accordance with SECTION 4.2.3 hereof to offset the expenses and costs
incurred by Agent in connection with record keeping, analysis and evaluations of
the Collateral.
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Affiliate shall mean a Person (other than a Subsidiary): (i) which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, another Person; (ii) which beneficially owns or
holds 10% or more of any class of the Equity Interests of a Person; or (iii) 10%
or more of the Equity Interests with power to vote of which is beneficially
owned or held by another Person or a Subsidiary of another Person. For purposes
hereof, "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of any Equity Interest, by contract or otherwise.
Agent Indemnitees shall mean Agent in its capacity as agent hereunder and
under the other Loan Documents and all of Agent's present and future officers,
directors, agents and attorneys.
Agreement shall mean this Financing Agreement, as amended from time to time
by the parties hereto.
Anniversary Date shall mean the date occurring twelve (12) months from the
Closing Date and the same date in every year thereafter.
Applicable Law shall mean all laws, rules and regulations applicable to the
person, conduct, transaction, covenant or Loan Documents in question, including
all applicable common law and equitable principles; all provisions of all
applicable state and federal constitutions, statutes, rules, regulations and
orders of governmental bodies; and orders, judgments and decrees of all courts
and arbitrators.
Assignment and Acceptance shall mean an assignment and acceptance entered
into by a Lender and an Eligible Assignee and accepted by Agent, in the form of
EXHIBIT F.
Availability Reserve shall mean on any date of determination thereof, an
amount equal to the sum of (i) any amounts which Borrower is obligated to pay
pursuant to the provisions of any of the Loan Documents that Agent elects to pay
for the account of Borrower in accordance with authority contained in any of the
Loan Documents; (ii) the LC Outstandings at any such date; and (iii) for so long
as an Event of Default exists, such additional reserves as Agent in its sole and
absolute discretion may elect to impose from time to time, without waiving any
such Event of Default or Agent's entitlement to accelerate the maturity of the
Obligations as a consequence thereof.
Average Monthly Loan Balance shall mean, for any month, the amount obtained
by adding the unpaid balance of the sum of the Revolving Loans outstanding and
the LC Outstandings at the end of each day for the month in question and by
dividing such sum by the number of days in such month.
Average Trailing Cash Receipts shall mean, on any date of determination,
the sum of Borrower's cash collections from Accounts for the 30 day period
preceding any such determination date.
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Bank means The Chase Manhattan Bank, a New York banking corporation, and
its successors and assigns.
Board of Governors shall mean the Board of Governors of the Federal Reserve
Board.
Borrowing shall mean a borrowing consisting of Loans of one Type made on
the same day by Lenders (or by Agent in the case of a Borrowing funded by
Settlement Loans) or a conversion of a Loan or Loans of one Type from Lenders on
the same day.
Borrowing Base shall mean as at any date of determination thereof, an
amount equal to the lesser of:
(a) $30,000,000, less the LC Outstandings at such date;
or
(b) an amount equal to:
(i) the lesser of (A) the Accounts Formula Amount at such
date, or (B) from and after October 31, 2001, the amount of
the Average Trailing Cash Receipts at such date;
minus
(ii) the Availability Reserve.
Borrowing Base Certificate shall mean a Borrowing Base Certificate in
substantially the form set forth in EXHIBIT C attached hereto.
Business Day shall mean a day on which Agent is open for business in New
York, New York, and which is not a Saturday, Sunday or other day on which
commercial banks or lending institutions in New York, New York are authorized or
required by law to close.
Capital Expenditures for any period shall mean expenditures made or
liabilities incurred for the acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful life of
more than one year, including the total principal portion of Capitalized Lease
Obligations, determined in accordance with GAAP.
Capitalized Lease Obligation shall mean any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
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Capital Lease shall mean any lease of property (whether real, personal or
mixed) which, in conformity with GAAP, is accounted for as a capital lease or a
Capital Expenditure on the balance sheet of Borrower.
Cash Collateral shall mean cash or cash equivalents comprised of marketable
direct obligations issued or unconditionally guaranteed by the United States
government and backed by the full faith and credit of the United States
government having maturities of not more than 12 months from the date of
acquisition or domestic certificates of deposit and time deposits having
maturities of not more than 12 months from the date of acquisition, and any
interest earned thereon, that is (i) deposited with Agent or its bailee in
accordance with this Agreement as security for any of the Obligations to the
extent provided in this Agreement or (ii) is deposited with a financial
institution permitted under applicable PASA rules and regulations to secure
Borrower's obligations to the issuer of the PASA Bonds.
Cash Collateral Account shall mean a demand deposit, money market or other
account established by Agent for the ratable benefit of Lenders at such
financial institution as Agent may select in its discretion, which account shall
be in Agent's name and subject to Agent's Lien under this Agreement.
Chase Bank Rate Loan means a Loan, or portion thereof, during any period in
which it bears interest at a rate based upon the applicable Chase Bank Rate.
Chase Bank Rate shall mean the rate of interest per annum announced by The
Chase Manhattan Bank from time to time as its prime rate in effect at its
principal office in the City of New York. The prime rate is not intended to be
the lowest rate of interest charged by The Chase Manhattan Bank to its
borrowers.
Chattel Paper shall have the meaning ascribed to the term "chattel paper"
in the UCC.
CIT shall mean The CIT Group/Business Credit, Inc, a New York corporation.
CIT Indemnitees shall mean Agent and all of its present and future
officers, directors and agents.
Closing Date shall mean the date that of this Agreement has been duly
executed by the parties hereto and delivered to Agent.
Collateral shall mean all of the property and interests in property
described in SECTION 7 of this Agreement, and all other property and interests
in property that now or hereafter secure the payment and performance of any of
the Obligations.
Commitment shall mean at any date for any Lender, the aggregate amount of
such Lender's Revolving Loan Commitment on such date, and "Commitments" means
the aggregate amount of all
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Revolving Loan Commitments.
Commitment Termination Date shall mean the date that is the soonest to
occur of (i) the last day of the Original Term or of any applicable Renewal
Term; (ii) the date on which either Borrower or Agent elects to terminate the
Commitments pursuant to SECTION 6.2 of this Agreement; or (iii) the date on
which the Commitments are automatically terminated pursuant to SECTION 11.2 of
this Agreement.
Consolidated Balance Sheet shall mean a consolidated balance sheet of
Borrower eliminating all inter-company transactions and prepared in accordance
with GAAP.
Commercial Tort Claim shall have the meaning ascribed to "commercial tort
claim" in the UCC.
Current Assets shall mean, at any date, the amount at which all of the
current assets of a Person would be properly classified as current assets shown
on a balance sheet at such date in accordance with GAAP except that amounts due
from Affiliates and investments in Affiliates shall be excluded therefrom.
Current Liabilities shall mean, at any date, the amount at which all of the
current liabilities of a Person would be properly classified as current
liabilities shown on a balance sheet at such date in accordance with GAAP.
Default shall mean any event specified in Section 11 hereof, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, event or act, has been satisfied.
Default Rate shall mean, at any date of determination, the rate of interest
per annum equal to the lesser of (a) the Maximum Rate or (b) the Chase Bank Rate
plus 4%.
Deposit Accounts shall mean all of Borrower's demand, time, savings,
passbook, money market or other depository accounts, and all certificates of
deposit, maintained by Borrower with any bank, savings and loan association,
credit union or other depository institution.
Distribution shall mean and include: (i) the payment of any dividends or
other distributions on capital stock of Borrower (except distributions in such
interests) and (ii) the redemption or acquisition by Borrower of its capital
stock (or any warrant or option for the purchase of any such capital stock)
unless made contemporaneously from the net proceeds of the sale of its capital
stock.
Documents shall mean all present and future documents as defined in the UCC
and any and all warehouse receipts, bills of lading, shipping documents, chattel
paper, instruments and similar documents, all whether negotiable or not and all
goods and Inventory relating thereto and all cash and non-cash proceeds of the
foregoing.
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Dollars and the sign "$" shall refer to currency of the United States of
America.
Dominion Account shall mean a special account of Agent established by
Borrower pursuant to this Agreement at a bank selected by Borrower, but
acceptable to Agent in its reasonable discretion, and over which Agent shall
have sole and exclusive access and control for withdrawal purposes.
EBITDA shall mean for any fiscal quarter of Borrower, without duplication,
the sum of the following for such period determined on a Consolidated basis: (i)
Net Income, plus (ii) depreciation, plus (iii) amortization, plus (iv) all
interest expense, plus (v) income tax expense, plus (vi) other non-cash charges
deducted in calculating Net Income (excluding extraordinary gains and losses).
Eligible Account shall mean an Account arising in the ordinary course of
Borrower's business from the sale of goods which has been invoiced by Borrower,
is payable in Dollars and which Agent, in its customary credit judgment, deems
to be an Eligible Account. Without limiting the generality of the foregoing, no
Account shall be an Eligible Account if: (i) it arises out of a sale made by
Borrower to a Subsidiary or an Affiliate of Borrower or to a Person controlled
by an Affiliate of Borrower; (ii) the Account, it is unpaid for more than 21
days after the original invoice date; (iii) 50% or more of the Accounts from the
Account Debtor are not deemed Eligible Accounts hereunder; (iv) the total unpaid
Eligible Accounts of any Account Debtor exceed 20% of the net amount of all
Eligible Accounts or exceeds a credit limit established by Agent for such
Account Debtor, in each case, to the extent of such excess; (v) any covenant,
representation or warranty contained in this Agreement with respect to such
Account has been breached; (vi) the Account Debtor is also Borrower's creditor
or supplier, or the Account Debtor has disputed liability with respect to such
Account, or the Account Debtor has made any claim with respect to any other
Account due from such Account Debtor to Borrower, or the Account otherwise is or
may become subject to any right of setoff, counterclaim, reserve or chargeback,
provided that, the Accounts of such Account Debtor shall be ineligible only to
the extent of such offset, counterclaim, disputed amount, reserve or chargeback;
(vii) an Insolvency Proceeding has been commenced by or against the Account
Debtor or the Account Debtor has failed, suspended business or ceased to be
solvent; (viii) it arises from a sale to an Account Debtor with its principal
office, assets or place of business outside the United States; (ix) it arises
from a sale to the Account Debtor on a bill-and-hold, guaranteed sale,
sale-or-return, sale-on-approval, consignment or any other repurchase or return
basis; (x) the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless Borrower assigns its right to payment
of such Account to Agent, in a manner satisfactory to Agent, so as to comply
with the Assignment of Claims Act of 1940 (31 U.S.C. '3727 and 41 U.S.C. '15),
or is a state, county or municipality, or a political subdivision or agency
thereof and Applicable Law disallows or restricts an assignment of Accounts on
which it is the Account Debtor; (xi) the Account Debtor is located in a state
imposing conditions on the right of a creditor to collect accounts receivable
unless Borrower has either qualified to transact business in such state as a
foreign entity or filed a Notice of Business Activities Report or other required
report with the appropriate officials in those states for the then current year;
(xii) the Account is subject to an encumbrance other than a Permitted Lien;
(xiii) the goods giving rise to such Account have not been delivered to and
accepted by the Account Debtor or the services giving rise to such Account
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have not been performed by Borrower and accepted by the Account Debtor or the
Account otherwise does not represent a final sale; (xiv) the Account is
evidenced by chattel paper or an instrument of any kind, or has been reduced to
judgment; (xv) Borrower has made any agreement with the Account Debtor for any
deduction therefrom, except for discounts or allowances which are made in the
ordinary course of business for prompt payment and which discounts or allowances
are reflected in the calculation of the face value of each invoice related to
such Account; (xvi) the Account arises out of a contract or order which, by its
terms, purports to forbid, restrict or make void or unenforceable the assignment
by Borrower to Agent of such Account; (xvii) Borrower has made an agreement with
the Account Debtor to extend the time of payment thereof; (xviii) Borrower's
performance giving rise to the Account has been guaranteed by a surety or such
performance has been otherwise bonded or secured in whole or in part; or (xix)
the Account arises from the sale of Farm Products with respect to which (1)
Borrower has received a notification of a Lien therein from a secured creditor
of the vendor of such goods or (2) notification of a Lien therein has been filed
in any applicable central filing offices contemplated under the Food Security
Act, and any such secured creditor has not been timely paid pursuant to any such
notification.
Eligible Assignee shall mean a Lender or a U.S. based Affiliate of a
Lender; a commercial bank organized under the laws of the United States or any
state and having total assets in excess of $15 billion; or any other Person
(except Borrower or a Guarantor, or an Affiliate of either) approved by Agent.
Equipment shall mean all machinery, apparatus, equipment, fittings,
furniture, fixtures, and other tangible personal Property (other than Inventory)
of every kind and description used in Borrower's business operations or owned by
Borrower or in which Borrower has an interest, whether now owned or hereafter
acquired by Borrower and wherever located, and all parts, accessories and
special tools and all increases and accessions thereto and substitutions and
replacements therefor.
Equity Interest shall mean the interest of (i) a shareholder in a
corporation, (ii) a partner (whether general or limited) in a partnership
(whether general, limited or limited liability), (iii) a member in a limited
liability company, or (iv) any other Person having any other form of equity
security or ownership interest.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder
from time to time.
Event(s) of Default shall have the meaning provided for in SECTION 11 of
this Agreement.
Excess Availability shall mean at any date, the excess, if any, of the
Borrowing Base on such date less the outstanding principal amount of the
Revolving Loans and the LC Outstandings on such date, plus (ii) the amount of
all requested Revolving Loans and Letters of Credit on such date, plus (iii) the
aggregate amount of all past due accounts payable, rental obligations or other
liabilities of Borrower.
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Executive Officers shall mean the Chairman, President, Chief Financial
Officer, any Vice President, Treasurer and Secretary.
Extraordinary Expenses shall mean all costs, expenses, fees or advances
that Agent or any Lender may suffer or incur, whether prior to or after the
occurrence of an Event of Default, on account of or in connection with (i) the
audit, inspection, repossession, storage, repair, appraisal, insuring,
completion of the manufacture of, preparing for sale, advertising for sale,
selling, collecting or otherwise preserving or realizing upon any Collateral;
(ii) the defense of Agent's Lien upon any Collateral or the priority thereof or
any adverse claim with respect to the Loans, the Loan Documents or the
Collateral asserted by any Obligor, any receiver or trustee for any Obligor or
any creditor or representative of creditors of any Obligor; (iii) the settlement
or satisfaction of any Liens upon any Collateral (whether or not such Liens are
Permitted Liens); (iv) the collection or enforcement of any of the Obligations;
(v) the negotiation, documentation, and closing of any restructuring or
forbearance agreement with respect to the Loan Documents or Obligations; (vi)
amounts advanced by Agent pursuant to SECTION 8.1.3 of this Agreement; (vii) the
enforcement of any of the provisions of any of the Loan Documents; or (viii) any
payment under indemnity or other payment agreement provided by Agent to Bank or
any other financial institution in connection with any Dominion Account or any
lockbox arrangement. Such costs, expenses and advances may include transfer
fees, taxes, storage fees, insurance costs, permit fees, utility reservation and
standby fees, legal fees, appraisal fees, brokers' fees and commissions,
auctioneers' fees and commissions, accountants' fees, environmental study fees,
wages and salaries paid to employees of Borrower or independent contractors in
liquidating any Collateral, travel expenses, all other fees and expenses payable
or reimbursable by Borrower or any other Obligor under any of the Loan
Documents, and all other fees and expenses associated with the enforcement of
rights or remedies under any of the Loan Documents, but excluding compensation
paid to employees (including inside legal counsel who are employees) of Agent.
Farm Products shall have the meaning given to "farm products" in the UCC.
Federal Funds Rate shall mean for any period, a fluctuating interest rate
per annum equal for each date during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) in
Atlanta, Georgia by the Federal Reserve Bank of Atlanta, or if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from 3 federal funds brokers
of recognized standing selected by Agent.
Food Security Act shall mean the Food Security Act of 1985 (7 U.S.C.A.ss.
1631 et seq.) and all rules and regulations promulgated thereunder, as at any
time hereafter amended or modified.
GAAP shall mean generally accepted accounting principles in the United
States of America as in effect from time to time consistently applied.
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General Intangibles shall mean all general intangibles of Borrower, whether
now owned or hereafter created or acquired by Borrower, including all choses in
action, causes of action, company or other business records, deposit accounts,
inventions, blueprints, designs, patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, service marks, goodwill,
brand names, copyrights, registrations, licenses, franchises, customer lists,
tax refund claims, computer programs, operational manuals, all entitlements,
rights to payment and payments, in whatever form received (including, without
limitation, under any Margin Account or under any program of the United States
Department of Agriculture), all Payment Intangibles, including all claims under
guaranties, security interests or other security held by or granted to Borrower
to secure payment of any of the Accounts by an Account Debtor, all rights to
indemnification and all other intangible property of every kind and nature
(other than Accounts).
Goods shall have the meaning given to "goods" in the UCC.
Guarantor shall mean any Person who may at any time hereafter guaranty all
or any part of the Obligations.
Guaranty Agreement shall mean any guaranty agreement executed by a
Guarantor in favor of Agent for the ratable benefit of Lenders and any other
guaranty of the Obligations at any time or times delivered to Agent.
Indebtedness shall mean, without duplication, all liabilities, contingent
or otherwise, which are any of the following: (a) obligations in respect of
money (borrowed or otherwise due or owing to third parties) or for the deferred
purchase price of property, services or assets, other than Inventory, and (b)
lease obligations which, in accordance with GAAP, have been, or which should be
capitalized.
Indemnified Amount shall mean in the case of Agent Indemnitees, the amount
of any loss, cost, expenses or damages suffered or incurred by Agent Indemnitees
and against which Lenders or any Obligor have agreed to indemnify Agent
Indemnitees pursuant to the terms of this Agreement or any of the other Loan
Documents; in the case of Lender Indemnitees, the amount of any loss, cost,
expenses or damages suffered or incurred by Lender Indemnitees and against which
Lender or any Obligor have agreed to indemnify Lender Indemnitees pursuant to
the terms of this Agreement or any of the other Loan Documents; and, in the case
of Agent Indemnitees, the amount of any loss, cost, expenses or damages suffered
or incurred by Agent Indemnitees and against which Lenders or any Obligor have
agreed to indemnify Agent Indemnitees pursuant to the terms of this Agreement or
any of the other Loan Documents.
Indemnitees shall mean the Agent Indemnitees, the Lender Indemnitees and
the CIT Indemnitees.
Insolvency Proceeding shall mean any action, case or proceeding commenced
by or against Borrower, or any agreement of Borrower, for (a) the entry of an
order for relief under any chapter of
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the U. S. Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign), (b) the appointment of a receiver, trustee,
liquidator or other custodian for such Person or any part of its Property, (c)
an assignment or trust mortgage for the benefit of creditors of such Person, (d)
the calling of a meeting of the creditors of Borrower for the purpose of
compromising the debts of Borrower, or (e) the liquidation, dissolution or
winding up of the affairs of such Person.
Instrument shall have the meaning ascribed to the term "instrument" in the
UCC.
Interest Period shall have the meaning ascribed to such term in SECTION
4.1.2 of this Agreement.
Inventory shall mean all of Borrower's present and hereafter acquired
inventory as defined in the UCC and any and all merchandise and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods wherever located, and materials used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production from raw
materials through work-in-process to finished goods and all proceeds thereof of
whatever sort.
Investment Property shall mean all Securities (whether certificated or
uncertificated), security entitlements, securities, accounts, commodity
contracts and commodity accounts.
Investor Participants shall mean Biegert, Inc., Safeguard 2001 Capital
L.P., and ICG Holdings, Inc. and their respective heirs, successors and assigns.
Landlord Agreement shall mean a written agreement between Agent and
landlords or mortgagees in respect of such leased business locations of Borrower
that Agent may deem necessary or appropriate to assure access to Collateral
located thereon and the priority of Agent's lien in such Collateral.
LC Application shall mean an application to Bank, in the form approved by
Bank and duly executed by Borrower and CIT as co-applicants, for the issuance of
a Letter of Credit.
LC Conditions shall mean the following conditions, the satisfaction of each
of which is required before CIT shall be obligated to execute any LC Application
in connection with a request to Bank for the issuance of a Letter of Credit: (i)
no Default or Event of Default exists; (ii) after giving effect to the issuance
of the requested Letter of Credit and each Letter of Credit to be issued and for
which an LC Application has been signed by CIT, the LC Outstandings comprised of
standby Letters of Credit do not exceed $500,000, the LC Outstandings comprised
of documentary Letters of Credit do not exceed $500,000, no Out-of-Formula
Condition would exist, and, if no Revolving Loans are outstanding, the LC
Outstandings do not exceed the Borrowing Base; (iii) the expiry date of the
Letter of Credit does not extend beyond the earlier to occur of 365 days from
the date of issuance or 30 days prior to the Commitment Termination Date or 30
days prior to the last day of any renewal period thereafter; and (iv) the
currency in which payment is to be made under the Letter of Credit is Dollars.
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LC Documents shall mean any and all agreements, instruments and documents
(other than an LC Application or an LC Guaranty) required by Bank to be executed
by Borrower or any other Person and delivered to Bank for the issuance of a
Letter of Credit.
LC Guaranty shall mean the guaranty delivered by CIT to Bank of Borrower's
reimbursement obligation under Bank's reimbursement agreement, application for
Letter of Credit or other like document.
LC Guaranty Fee shall mean the fees payable by Borrower under SECTION 4.2.4
for: (i) issuing a LC Guaranty and/or (ii) otherwise aiding Borrower in
obtaining Letters of Credit pursuant to SECTION 3.3 hereof.
LC Outstandings shall mean, on any date of determination thereof, an amount
(in Dollars) equal to the sum of (i) all amounts then due and payable by
Borrower on such date by reason of any payment made on or before such date by
CIT under any LC Guaranty, plus (ii) the aggregate undrawn amount of all Letters
of Credit then outstanding or to be issued by Bank under an LC Application
theretofore submitted to Bank.
LC Request shall mean a written request from Borrower to Agent for CIT to
join with Borrower in the execution of an LC Application for the issuance of a
Letter of Credit, which request shall specify the identity and address of the
intended beneficiary of the requested Letter of Credit, the purpose for issuance
of the requested Letter of Credit, the proposed amount, issuance date and expiry
date of the requested Letter of Credit, the conditions to payment under the
requested Letter of Credit, and whether the requested Letter of Credit may be
drawn upon in a single or multiple draws.
LC Support shall mean a guaranty or other support agreement from CIT in
favor of Bank pursuant to which CIT shall guarantee or otherwise assure the
payment or performance by the parties (other than CIT, if a party) to an LC
Application of such parties' obligations with respect to such Letter of Credit,
including the obligation of such parties to reimburse Bank for any payment made
by Bank under such Letter of Credit.
Lender Indemnitee shall mean a Lender in its capacity as a lender under
this Agreement and its present and future officers, directors, agents and
attorneys.
Lenders shall mean Agent (whether in its capacity as a provider of Loans
under SECTION 3.1 of this Agreement, as the provider of Settlement Loans under
SECTION 5.1.3 of this Agreement, or as the procurer of Letters of Credit under
SECTION 3.3 of this Agreement) and any other Person who may from time to time
become a "Lender" under this Agreement, and their respective successors and
permitted assigns.
Letter of Credit shall mean a standby or documentary letter of credit
issued with the assistance of Agent by Bank for or on behalf of Borrower
pursuant to SECTION 3.3 hereof.
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Letter-of-Credit Right shall have the meaning given to "letter-of-credit
right" in the UCC.
LIBOR Lending Office shall mean with respect to a Lender, the office
designated as a LIBOR Lending Office for such Lender on the signature page
hereof (or on any Assignment and Acceptance, in the case of an assignee) and
such other office of such Lender or any of its Affiliates that is hereafter
designated by written notice to Agent.
LIBOR Loan means a Loan, or portion thereof, during any period in which it
bears interest at a rate based upon the applicable Adjusted LIBOR Rate.
LIBOR Rate means, with respect to each day of an Interest Period, the rate
per annum equal to the rate for deposits in Dollars approximately equal in
principal amount to or comparable to the amount of the LIBOR Loan to which such
Interest Period relates and for a term comparable to such Interest Period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, 3 Business Days
prior to the commencement of such LIBOR Loan. If at least two rates appear on
such Telerate Page for such Interest Period, the "LIBOR Rate" shall be the
arithmetic mean of such rates. If the "LIBOR Rate" cannot be determined in
accordance with the immediately preceding sentences with respect to any Interest
Period, the "LIBOR Rate" with respect to each day during such Interest Period
shall be the rate per annum equal to the rate (rounded upward to the nearest
1/100th of 1%) at which Bank is offered Dollar deposits at or about 10:00 a.m.,
New York time, 3 Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations are then being conducted by Bank the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Loan to be outstanding during such
Interest Period. Each determination by Agent of any LIBOR Rate shall, in the
absence of any manifest error, be conclusive.
Lien shall mean any interest in property securing an obligation owed to, or
a claim by, a Person other than the owner of the property, whether such interest
is based on common law, statute or contract. For the purpose of this Agreement,
Borrower shall be deemed to be the owner of any property which it has acquired
or holds subject to a conditional sale agreement or other arrangement pursuant
to which title to the property has been retained by or vested in some other
person for security purposes.
Line of Credit Fee shall have the meaning ascribed to such term in SECTION
4.2.2 of this Agreement.
Loan Account shall have the meaning set forth in SECTION 5.8.1 of this
Agreement.
Loan Documents shall mean this Agreement, the Notes, any Guaranty
Agreement, the Mortgages, the Participation Agreements, the Participant Letters
of Credit, each Margin Account Assignment, the Patent Assignment, the Trademark
Security Agreement and any other documents and the ancillary loan and security
agreements executed from time to time in connection with this
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Agreement, as the same may be renewed, amended, extended, increased or
supplemented from time to time.
Loan Year shall mean a period commencing each calendar year on the same
month and day as the date of the Agreement and ending on the same month and day
in the immediately succeeding calendar year, with the first such period (i.e.
the first Loan Year) to commence on the date of this Agreement.
Loans shall mean all loan, advances and the financial accommodations of any
kind made by Agent or any Lender to Borrower pursuant to this Agreement,
including the Revolving Loans.
Margin Accounts shall mean all existing or hereafter acquired or
accumulated futures contracts or funds and other property related to such
futures contracts, which Borrower or its authorized attorney-in-fact may
acquire, accumulate, withdraw, pay out, and held with any broker, including any
balance credited to an Margin Account upon its closing.
Margin Account Assignment shall mean an Assignment of Hedging and Futures
Contracts, among Agent, Borrower and Borrower's respective brokers holding
futures contracts, forwards sales contracts, trading accounts and all goods to
be delivered or received thereunder and all funds or monies paid or payable to
Borrower in respect of such contracts or accounts.
Margin Stock shall have the meaning ascribed to such term in Regulation U
and Regulation G of the Board of Governors.
Material Adverse Effect - the effect of any event or condition which, alone
or when taken together with other events or conditions occurring or existing
concurrently therewith, (a) has a material adverse effect upon the business,
operations, properties, condition (financial or otherwise) or business prospects
of Borrower; (b) has or may be reasonably expected to have any material adverse
effect upon the value of the whole or any material part of the Collateral, the
Liens of Agent with respect to the Collateral or any material part thereof or
the priority of such Liens; (c) materially impairs the ability of Borrower or
Borrower to perform its obligations under this Agreement or any of the other
Loan Documents, including repayment of the Obligations when due; or (d)
materially impairs the ability of Agent to enforce or collect the Obligations or
realize upon any of the Collateral in accordance with the Loan Documents and
Applicable Law.
Maximum Rate shall mean the maximum non-usurious rate of interest permitted
by Applicable Law that at any time, or from time to time, may be contracted for,
taken, reserved, charged or received on the debt in question or, to the extent
that at any time Applicable Law may thereafter permit a higher maximum
non-usurious rate of interest, then such higher rate. Notwithstanding any other
provision hereof, the Maximum Rate shall be calculated on a daily basis
(computed on the actual number of days elapsed over a year of 360 days).
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Money Borrowed shall mean (i) debt arising from the lending of money by any
other person to Borrower; (ii) debt, whether or not in any such case arising
from the lending of money by another person to Borrower, (A) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (B) which constitutes obligations evidence by bonds, debentures, note or
similar instruments, or (C) upon which interest charges are customarily paid
(other than accounts payable) or that was issued or assumed as full or partial
payment for property; (iii) debt constituting Capitalized Lease Obligations;
(iv) reimbursement obligations with respect to letters of credit or guaranties
of letters of credit and (v) debt of Borrower under any guaranty of obligations
that would constitute debt for Money Borrowed under clauses (i) through (iii)
hereof by Borrower.
Mortgage shall mean each mortgage, deed of trust or deed to secure debt to
be executed by Borrower on or after the Closing Date in favor of Agent and by
which Borrower shall grant and convey to Agent, for its benefit as Agent and for
the Pro Rata benefit of Lenders, Liens upon the real property of Borrower
located in Brown County, Texas, Falls County, Texas, Mason County, Texas, San
Saba County, Texas, Cherokee County, South Carolina, and Fayette County,
Kentucky as security for the payment of the Obligations.
Net Income (Loss) shall mean for any applicable period, the aggregate net
income (or loss) of Borrower from continuing operations (excluding any income
(or loss) included therein resulting from extraordinary items) determined in
accordance with GAAP.
Notes shall mean the Revolving Credit Notes, as hereafter amended,
modified or restated.
Notice of Borrowing shall have the meaning set forth in SECTION 5.1.1(I) of
this Agreement.
Notice of Conversion/Continuation shall have the meaning set forth in
SECTION 4.1.3(II) of this Agreement.
Obligations shall mean, in each case, whether now in existence or hereafter
arising, (i) the principal of, and interest and premium, if any, on, the Loans;
(ii) all LC Outstandings and all other obligations of any Obligor to Agent or
Agent arising in connection with the issuance of any Letter of Credit; (iii) all
Indebtedness and other obligations of Borrower to Agent or any Lender under any
cash management, hedging or similar agreements, including any premature
termination or breakage costs; (iv) all other Indebtedness, covenants and duties
now or at any time or times hereafter owing by Borrower to Agent or any Lender
arising under or pursuant to this Agreement or any of the other Loan Documents,
whether evidenced by any note or other writing, whether arising from any
extension of credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or several,
including all interest, charges, expenses, fees or other sums (including
Extraordinary Expenses) chargeable to any or all Obligors hereunder or under any
of the other Loan Documents; and (v) in the case of Agent and its Affiliates,
any Indebtedness, obligations, covenants and duties arising in connection with
any banking or related transactions, services or functions provided to any
Obligor in connection with any conduct of such Obligor's business (excluding
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extensions of credit giving rise to any Indebtedness for Money Borrowed not
related to this Agreement or any other Loan Documents).
Obligor shall mean Borrower and any other Person that is at any time liable
for the payment of the whole or any part of the Obligations or that has granted
in favor of Agent a Lien upon any of any of such Person's assets to secure
payment of any of the Obligations.
Operating Leases shall mean all leases of property (whether real, personal
or mixed) other than Capital Leases.
Original Term shall have the meaning ascribed to such term in SECTION 6.1
hereof.
Other Collateral shall mean all now owned and hereafter acquired deposit
accounts maintained with any bank or financial institutions representing the
direct or indirect proceeds of Collateral; all cash and other monies and
property in the possession or control of Agent; all books, records, ledger
cards, disks and related data processing software at any time evidencing or
containing information relating to any of the Collateral described herein or
otherwise necessary or helpful in the collection thereof or realization thereon,
and all cash and non-cash proceeds of the foregoing.
Out-of-Formula Condition shall have the meaning set forth in SECTION 3.1 of
this Agreement.
Out-of-Formula Loan shall mean a Revolving Loan made when an Out-of-Formula
Condition exists or the amount of any Revolving Loan which when funded results
in an Out-of-Formula Condition.
Participant shall have the meaning set forth in SECTION 13.2.1 of this
Agreement.
Participant Letters of Credit shall have the mean letters of credit issued
by banks or other financial institutions acceptable to Agent issued for the
account of the Investor Participants in an aggregate face amount of $9,000,000
showing Agent as the beneficiary thereof.
Participating Lender shall have the meaning set forth in SECTION 3.3.2(I).
Participation Agreements shall mean each Agreement Regarding Purchase of
Junior participations, executed on or about the Closing Date by each of the
Investor Participants and Agent and Lender, pursuant to which the Investor
Participants have agreed to purchase junior participations in each Lender's Pro
Rata share of the Obligations for an aggregate purchase price of not less than
$9,000,000, which purchase obligations are secured by the Participant Letters of
Credit.
PASA shall mean the Packers and Stockyard Act (7 U.S.C.ss.ss. 181 et seq.)
as amended from time to time and all rules and regulations promulgated from time
to time thereunder.
PASA Trust Fund Agreement shall mean (i) the Trust Fund Agreement FL-205 in
the amount of
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$1,265,000 in satisfaction of Borrower's obligations as a "dealer" under PASA
and (ii) the Trust Fund Agreement FL-204 in the amount of $240,000 in
satisfaction of Borrower's obligations as a "market agency" under PASA, in both
of which Borrower is the principal, Michael E. Neukamm, Esq. is the Trustee, and
National City Bank, Louisville, Kentucky is the depository for the collateral
pledged therein.
Patent Assignment shall mean each Patent Collateral Assignment and Security
Agreement to be executed by Borrower in favor of Agent on or before the Closing
Date and by which Borrower shall assign to Agent, for its benefit as Agent and
for the Pro Rata benefit of Lenders, as security for the Obligations, all of
Borrower's right, title and interest in and to the patents described therein.
Payment Account shall mean an account maintained by Agent (currently at
Bank in New York, New York) to which all monies from time to time deposited to a
Dominion Account shall be transferred and all other payments shall be sent in
immediately available federal funds.
Payment Intangibles shall have the meaning given to "payment intangibles"
in the UCC.
Payment Items shall mean all checks, drafts, or other items of payment
payable to Borrower, including proceeds of any of the Collateral.
Pending Revolving Loans shall mean at any date, the aggregate principal
amount of all Revolving Loans which have been requested in any Notice of
Borrowing received by Agent but which have not theretofore been advanced by
Agent or Lenders.
Permitted Indebtedness shall mean: (a) current Indebtedness maturing in
less than one year and incurred in the ordinary course of business for raw
materials, supplies, equipment, services, taxes or labor; (b) the Indebtedness
secured by the Purchase Money Liens; (c) Subordinated Debt; (d) deferred taxes
and other expenses incurred in the ordinary course of business; (e) other
Indebtedness existing on the date of execution of this Agreement and listed in
the most recent financial statement delivered to Agent or otherwise disclosed to
Agent in writing prior to the Closing Date; (f) Indebtedness for Capital Leases
and Capital Expenditures permitted pursuant to SECTION 9.4.11 hereof; (g) the
replacement, refinancing or renewal of any of the above so long as the principal
amount of such Indebtedness is not increased; and (h) other Indebtedness in an
aggregate amount not exceeding at any time $250,000.
Permitted Liens shall mean: (a) Liens at any time granted in favor of
Agent; (b) Liens for Taxes (excluding any Lien imposed pursuant to any of the
provisions of ERISA) incurred in the ordinary course of Borrower's business and
not yet due or being Properly Contested; (c) Liens arising in the ordinary
course of Borrower's business by operation of law or regulation, but only if
payment in respect of any such Lien is not at the time required or the debt
secured by any such Lien is being Properly Contested and such Liens do not
materially detract from the value of the Property of Borrower or materially
impair the use thereof in the operation of Borrower's business; (d) Purchase
Money Liens securing purchase money indebtedness incurred consistently with the
terms of this
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Agreement; (e) Liens securing debt of a Subsidiary of Borrower to Borrower or to
another such Subsidiary; (f) Liens arising by virtue of the rendition, entry or
issuance against Borrower or any of its Subsidiaries, or any Property of
Borrower or any of its Subsidiaries, of any judgment, writ, order, or decree for
so long as each such Lien is in existence for less than 30 consecutive days
after it first arises or is being Properly Contested and is at all times junior
in priority to the Liens in favor of Agent; and (g) such other Liens as appear
on SCHEDULE 9.4.5 hereto; and (h) such other Liens as Agent may hereafter
approve in writing.
Person shall mean an individual, partnership, corporation, limited
liability company, limited liability partnership, joint stock company, land
trust, business trust, unincorporated organization or other form of business
entity, or a government or agency or political subdivision thereof.
Properly Contested shall mean in the case of any Indebtedness (including
Taxes) of Borrower that is not paid as and when due or payable by reason of
Borrower's bona fide dispute concerning its liability to pay same or concerning
the amount thereof, (i) such Indebtedness and any Liens securing same are being
properly contested in good faith by appropriate proceedings promptly instituted
and diligently conducted; (ii) Borrower has established appropriate reserves as
shall be required in conformity with GAAP; (iii) the non-payment of such
Indebtedness during the period being contested by Borrower will not have a
Material Adverse Effect and does not and will not result in a forfeiture of,
foreclosure upon or loss of any assets of Borrower; (iv) no Lien is imposed upon
any of Borrower's assets with respect to such Indebtedness unless such Lien is
at all times junior and subordinate in priority to the Liens in favor of Agent
(except only with respect to property taxes that have priority as a matter of
applicable state law) and enforcement of such Lien is stayed during the period
prior to the final resolution or disposition of such dispute; (v) if the
Indebtedness results from the entry, rendition or issuance against Borrower or
any of its assets of a judgment, writ, order or decree, such judgment, writ,
order or decree is stayed pending a timely appeal or other judicial review and
Borrower shall have established adequate reserves in accordance with GAAP for
such judgment, writ, order or decree or the same is either fully insured against
by an insurer that has not denied or reserved rights with respect to coverage or
has been bonded to Agent's satisfaction; and (vi) if such dispute or contest is
abandoned, settled or determined adversely to Borrower, Borrower forthwith pays
such Indebtedness and all penalties and interest in connection therewith.
Pro Rata shall mean a share of or in all Loans, participations in LC
Outstandings (or, in the case of Agent, the portion of the LC Outstandings in
which Agent does not sell a participation interest pursuant to SECTION 3.3.2 of
this Agreement), obligations to indemnify or reimburse Agent as the procurer of
Letters of Credit or Agent, payments, proceeds, collections, Collateral and
Extraordinary Expenses, which share for any Lender on any date shall be a
percentage (expressed as a decimal, rounded to the ninth decimal place) arrived
at by dividing the amount of the Commitment of such Lender on such date by the
aggregate amount of the Commitments of all Lenders on such date.
Purchase Money Liens shall mean Liens on any item of equipment acquired
after the date of this Agreement provided that (a) each such Lien shall attach
only to the property to be acquired, (b) a description of the property so
acquired is furnished to Agent, and (c) the debt incurred in connection
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with such acquisitions shall not exceed in the aggregate the amount permitted by
this Agreement for Capital Expenditures for any fiscal year.
Regulation D shall mean Regulation D of the Board of Governors.
Register shall mean the register maintained by Agent in accordance with
SECTION 5.9.2 of this Agreement.
Renewal Term shall mean any applicable period of the Original Term when
this Agreement shall have been renewed by Agent in its sole discretion.
Required Lenders shall mean at any date of determination thereof, Lenders
having Commitments representing at least 51% of the aggregate Commitments at
such time; provided, however, that if any Lender shall be in breach of any of
its obligations hereunder to Borrower or Agent, including any breach resulting
from its failure to honor its Commitment in accordance with the terms of this
Agreement, then, for so long as such breach continues, the term "Required
Lenders" shall mean Lenders (excluding each Lender that is in breach of its
obligations under this Agreement) having Commitments representing at least 51%
of the aggregate Commitments at such time; provided further, however, that if
the Commitments have been terminated, the term "Required Lenders" shall mean
Lenders (excluding each Lender that is in breach of its obligations hereunder)
holding Loans (including Settlement Loans) representing at least 51% of the
aggregate principal amount of Loans (including Settlement Loans) outstanding at
such time.
Restricted Investment shall mean any acquisition of Property by Borrower in
exchange for cash or other Property, whether in the form of an acquisition of
equity interests or Indebtedness, or the purchase or acquisition by Borrower of
any other Property, or a loan, advance, capital contribution or subscription,
except acquisitions of the following: (i) fixed assets to be used in the
business of Borrower so long as the acquisition costs thereof constitute Capital
Expenditures permitted hereunder; (ii) goods held for sale or lease or to be
used in the manufacture of goods or the provision of services by Borrower in the
ordinary course of business; (iii) current assets (as defined under GAAP)
arising from the sale or lease of goods or the rendition of services in the
ordinary course of business; (iv) investments in Subsidiaries to the extent
existing on the Closing Date; and (v) cash or cash equivalents to the extent
they are not subject to rights of offset in favor of any Person other than
Agent.
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Revolving Loan Commitment shall mean at any date for any Lender, the
obligation of such Lender to make Revolving Loans and to purchase participations
in LC Outstandings pursuant to the terms and conditions of this Agreement, which
shall not exceed the principal amount set forth opposite such Lender's name
under the heading "Revolving Loan Commitment" on the signature pages hereof or
the signature page of the Assignment and Acceptance by which it became a Lender,
as modified from time to time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance; and "Revolving Loan
Commitments" means the aggregate principal amount of the Revolving Loan
Commitments of all Lenders, the maximum amount of which shall be $30,000,000.
Revolving Loan shall mean a Loan made by Lenders as provided in SECTION 3.1
of this Agreement or a Settlement Loan funded solely by CIT.
Revolving Credit Notes shall mean a Revolving Credit Note to be executed by
Borrower in favor of each Lender in the form of EXHIBIT A attached hereto, which
shall be in the face amount of such Lender's Revolving Loan Commitment and which
shall evidence all Revolving Loans made by such Lender to Borrower pursuant to
this Agreement.
S&P shall mean the Standard & Poor's Corporation.
SEC shall mean the Securities and Exchange Commission.
Security shall have the same meaning as in Section 2(1) of the Securities
Act of 1933.
Settlement Date shall have the meaning set forth in SECTION 5.1.3(I) of
this Agreement.
Settlement Loan - shall have the meaning set forth in SECTION 5.1.3(II) of
this Agreement.
Settlement Report shall mean a report delivered by Agent to Lenders
summarizing the amount of the outstanding Revolving Loans as of the Settlement
Date and the calculation of the Borrowing Base as of such Settlement Date.
Solvent shall mean, at any date of determination, as to Borrower, Borrower
(i) owns Property whose fair saleable value is greater than the amount required
to pay all of Borrower's Indebtedness (including contingent debts), (ii) is able
to pay all of its Indebtedness as such Indebtedness matures, (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; and (iv) is not "insolvent" within
the meaning of Section 101(32) of the Bankruptcy Code.
Statutory Reserves shall mean on any date, the percentage (expressed as a
decimal) established by the Board of Governors which is the then stated maximum
rate for all reserves (including any emergency, supplemental or other marginal
reserve requirements) applicable to any member bank of the Federal Reserve
System in respect to Eurocurrency Liabilities
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(or any successor category of liabilities under Regulation D). Such reserve
percentage shall include those imposed pursuant to said Regulation D. The
Statutory Reserve shall be adjusted automatically on and as of the effective
date of any change in such percentage.
Subordinated Debt shall mean the indebtedness owing by Borrower which has
been subordinated to the Obligation pursuant to a written subordination
agreement acceptable to Agent.
Subsidiary shall mean any Person in which more than 50% of its outstanding
Voting Securities or more than 50% of all Equity Interests is owned directly or
indirectly by a Borrower, by one or more other Subsidiaries of Borrower or by
Borrower and one or more other Subsidiaries.
Supporting Obligations shall have the meaning given to "supporting
obligations" in the UCC.
Taxes shall mean any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including income, receipts, excise, property, sales, transfer, license, payroll,
withholding, social security and franchise taxes now or hereafter imposed or
levied by the United States, or any state, local or foreign government or by any
department, agency or other political subdivision or taxing authority thereof or
therein and all interest, penalties, additions to tax and similar liabilities
with respect thereto.
Total Assets shall mean Borrower's total assets determined in accordance
with GAAP, on a basis consistent with the latest audited statements of Borrower.
Trademark Security Agreement shall mean the Trademark Security Agreement to
be executed by Borrower in favor of Agent on or before the Closing Date and by
which Borrower shall assign to Agent, for its benefit as Agent and for the Pro
Rata benefit of Lenders, as security for the Obligations, all of Borrower's
right, title and interest in and to all of its trademarks.
Transferee shall have the meaning set forth in SECTION 13.3.3 of this
Agreement.
Type shall mean any type of a Loan determined with respect to the interest
option applicable thereto, which shall be either a LIBOR Loan or a Chase Bank
Rate Loan.
UCC shall mean the Uniform Commercial Code as in effect from time to time
in the State of Georgia.
Voting Securities shall mean Equity Interests of any class or classes of a
corporation or other entity the holders of which are ordinarily, in the absence
of contingencies, entitled to elect a majority of the corporate directors or
Persons performing similar functions.
Working Capital shall mean at any date, Current Assets minus Current
Liabilities on such date.
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ACCOUNTING TERMS. Unless otherwise specified herein, all terms of an accounting
character used in this Agreement shall be interpreted, all accounting
determinations under this Agreement shall be made, and all financial statements
required to be delivered under this Agreement shall be prepared in accordance
with GAAP, applied on a basis consistent with the most recent audited
Consolidated financial statements of Borrower and its Subsidiaries heretofore
delivered to Agent and Lenders and using the same method for inventory valuation
as used in such audited financial statements, except for any change required by
GAAP.
OTHER TERMS. All other terms contained in this Agreement shall have,
when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." The
section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of this Agreement. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations; to any of the Loan Documents
shall include any and all modifications thereto and any and all restatements,
extensions or renewals thereof; to any Person shall mean and include the
successors and permitted assigns of such Person; to "including" and "include"
shall be understood to mean "including, without limitation" (and, for purposes
of this Agreement and each other Loan Document, the parties agree that the rule
of ejusdem generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters to matters
similar to the matters specifically mentioned); and or to the time of day shall
mean the time of day on the day in question in Atlanta, Georgia, unless
otherwise expressly provided in this Agreement. A Default or an Event of Default
shall be deemed to exist at all times during the period commencing on the date
that such Default or Event of Default occurs to the date on which such Default
or Event of Default is waived in writing by Agent pursuant to this Agreement or,
in the case of a Default, is cured within any period of cure expressly provided
in this Agreement; and an Event of Default shall "continue" or be "continuing"
until such Event of Default has been waived in writing by Agent.
SECTION 2. CONDITIONS PRECEDENT
2.1. CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of
Lenders to make the initial Revolving Loan hereunder is subject to the
satisfaction of each of the following conditions precedent, in each case in form
and substance acceptable to Agent:
2.1.1. Documentation. Agent shall have received, in form and
substance satisfactory to Agent and its counsel, a duly executed counterpart of
this Agreement and all of the other Loan Documents, together with such
additional documents, instruments and certificates as Agent and its counsel
shall reasonably require in connection therewith from time to time.
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2.1.2. Availability. Agent shall have determined that immediately
after Lenders have made the initial Loans contemplated hereby, and paid (or made
provision for payment of) all closing costs incurred in connection with the
transactions contemplated hereby, Excess Availability shall not be less than
$10,000,000.
2.1.3. Evidence of Perfection and Priority of Liens in Collateral.
Agent shall have received copies of all filing receipts or acknowledgments
issued by any governmental authority to evidence any filing or recordation
necessary to perfect the Liens of Agent in the Collateral, including appropriate
filings under the Food Security Act, and evidence in form satisfactory to Agent
that such Liens constitute valid and perfected Liens, and that there are no
other Liens upon any Collateral except for Permitted Liens.
2.1.4. Articles of Incorporation. Agent shall have received a copy of
the Articles or Certificate of Incorporation of Borrower, and all amendments
thereto, certified by the Secretary of State or other appropriate official of
the jurisdiction of Borrower's incorporation.
2.1.5. Certain Good Standing Certificates. Agent shall have received
good standing certificates for Borrower, issued by the Secretary of State of
Delaware, Texas, Kentucky, South Carolina, Florida, Mississippi, Indiana, South
Dakota and each other state where Borrower is qualified to do business as a
foreign corporation .
2.1.6. Opinion Letters. Agent shall have received a favorable,
written opinion of Jenkens & Gilchrist, LLP, counsel to Borrower, as to the
transactions contemplated by this Agreement and the matters set forth in EXHIBIT
E attached hereto.
2.1.7. Insurance. Agent shall have received copies of the casualty
insurance policies of Borrower, together with loss payable endorsements on
Agent's standard form of loss payee endorsement naming Agent as loss payee and
copies of Borrower's liability insurance policies, together with endorsements
naming Agent as a co-insured.
2.1.8. Financial Statements. Agent shall have received interim
financial statements of Borrower for the fiscal period ending on or about July
31, 2001.
2.1.9. Landlord Agreements. Agent shall have received all landlord,
mortgagee waivers or warehouseman agreements with respect to all premises leased
by Borrower and which are disclosed on SCHEDULE 8.1.1 hereto.
2.1.10. Phase I Environmental Audits. Agent shall have received
written Phase I environmental audits of Borrower's business locations in form
and substance satisfactory to Agent.
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2.1.11. PASA Trust Fund Agreements. Agent shall have received evidence
reasonably satisfactory to it that the PASA Trust Fund Agreements currently in
force satisfy Borrower's bonding requirements under PASA.
2.1.12. Pending Litigation. Agent and its counsel shall have obtained
copies of all material filings and summaries of the status of the pending legal
proceedings in Saskatchewan, Canada between Borrower and Central BioTech, Inc.
2.1.13. Disbursement Letter; Borrowing Base Certificate. Agent shall
have received written instructions from Borrower directing application of the
proceeds of the Loans made pursuant to this Agreement, and an initial Borrowing
Base Certificate from Borrower in form satisfactory to Agent.
2.1.14. Cash Budget. Agent shall have received and found acceptable a
12 month cash budget of Borrower based on reasonable operating assumptions and
GAAP.
2.1.15 Payment of Fees. Borrower shall have paid, or made provision
for the payment on the Closing Date of, all fees and expenses to be paid
hereunder to Agent and Lenders on the Closing Date.
2.1.16 Participation Agreements and Participant Letters of Credit.
Agent shall have received from each Investor Participant a duly executed
Participation Agreement providing for the purchase of participations in the
Obligations for an aggregate purchase price of not less than $9,000,000 and, as
to each Investor Participant, a Participant Letter of Credit which (i) shall be
in a face amount of not less than the aggregate maximum purchase price payable
by such Investor Participant under the Participation Agreement to which he or it
is a party and (ii) shall contain draw provisions and an expiry date acceptable
to Agent in its sole discretion.
2.1.17 Forward Purchase Contracts. Agent shall have received a
detailed listing of Borrower's forward sales contracts that do not contain
non-offset provisions.
2.2. CONDITIONS TO ALL EXTENSIONS OF CREDIT. Except to the extent
expressly set forth in this Agreement, the agreement of Lenders to make any
extension of credit requested to be made by them to Borrower on any date
(including without limitation, the initial Revolving Loan) is subject to the
satisfaction of the following conditions precedent:
2.2.1. Accuracy of Representations. Each of the representations and
warranties made by Borrower in or pursuant to this Agreement shall be true and
correct in all material respects on and as of such date as if made on and as of
such date.
2.2.2. No Default. No Default or Event of Default shall have occurred
and be continuing on such date or, after giving effect to the extension of
credit requested to be made on such date, would exist it occur.
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2.2.3. No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of this Agreement or the consummation of the transactions contemplated
hereby.
2.2.4. No Material Adverse Effect. No event shall have occurred and
no condition shall exist which has or may be reasonably likely to have a
Material Adverse Effect.
Each request by Borrower hereunder for a Loan hereunder shall constitute a
representation and warranty by Borrower as of the date of such Loan that each of
the representations, warranties and covenants contained in this Agreement have
been satisfied and are true and correct in all material respects, except as
Borrower and Agent may otherwise agree in writing.
SECTION 3. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders severally agree to the extent and in the manner hereinafter
set forth to make their respective Pro Rata shares of the Commitments available
to Borrower, in an aggregate amount up to $30,000,000, as follows:
3.1. REVOLVING LOAN COMMITMENT.
3.1.1. Revolver Loans. Each Lender agrees, severally to the extent of
its Revolving Loan Commitment and not jointly with the other Lenders, upon the
terms and subject to the conditions set forth herein, to make Revolving Loans to
Borrower on any Business Day during the period from the date hereof through the
Business Day before the last day of the Original Term or any applicable Renewal
Term, not to exceed in aggregate principal amount outstanding at any time such
Lender's Revolving Loan Commitment at such time, which Revolving Loans may be
repaid and reborrowed in accordance with the provisions of this Agreement;
provided, however, that Lenders shall have no obligation to Borrower whatsoever
to make any Revolving Loan on or after the Commitment Termination Date or if at
the time of the proposed funding thereof the aggregate principal amount of all
of the Revolving Loans and Pending Revolving Loans then outstanding exceeds, or
would exceed after the funding of such Revolving Loan, the Borrowing Base. Each
Borrowing of Revolving Loans shall be funded by Lenders on a Pro Rata basis in
accordance with their respective Revolving Loan Commitments (except for Agent
with respect to Settlement Loans). The Revolving Loans shall bear interest as
set forth in SECTION 4.1. hereof. Each Revolving Loan shall, at the option of
Borrower, be made or continued as, or converted into, part of one or more
Borrowings that, unless specifically provided herein, shall consist entirely of
Chase Bank Rate Loans or LIBOR Loans.
3.1.2. Out-of-Formula Loans. If the unpaid balance of Revolving Loans
outstanding at any time should exceed the Borrowing Base at such time (an
"Out-of-Formula Condition"), such Revolving Loans shall nevertheless constitute
Obligations that are secured by the Collateral and entitled to all of the
benefits of the Loan Documents. In the event that Lenders are willing in their
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sole and absolute discretion to make Out-of-Formula Loans, such Out-of-Formula
Loans shall be payable ON DEMAND and shall bear interest as provided in this
Agreement for Revolving Loans generally.
3.1.3. Use of Proceeds. The proceeds of the Revolving Loans shall be
used by Borrower solely for one or more of the following purposes: (i) to pay
the fees and transaction expenses associated with the closing of the
transactions described herein; (ii) to pay any of the Obligations; and (iii) to
make expenditures for other lawful corporate purposes of Borrower to the extent
such expenditures are not prohibited by this Agreement or Applicable Law. In no
event may any Revolving Loan proceeds be used by Borrower to make a contribution
to the equity of any Subsidiary, to purchase or to carry, or to reduce, retire
or refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose that violates the provisions of Regulations G, T, U or X of the
Board of Governors.
3.1.4. Minimum Loan Balance. From and after the date that any
Investor Participant shall have purchased a junior participation in the
Obligations pursuant to the terms of a Participation Agreement, Borrower shall
not be entitled to repay or otherwise reduce the Obligations to an amount less
than the aggregate amount of such junior participations as of any applicable
date.
3.1.5. Revolving Credit Notes. The Revolving Loans made by each
Lender and interest accruing thereon shall be evidenced by the records of Agent
and such Lender and by the Revolving Credit Note payable to such Lender (or the
assignee of such Lender), which shall be executed by Borrower, completed in
conformity with this Agreement and delivered to such Lender on the Closing Date.
All outstanding principal amounts and accrued interest under the Revolving
Credit Note shall be due and payable as set forth in SECTION 5.3 hereof.
3.2. [RESERVED]
3.3. LETTER OF CREDIT FACILITY.
3.3.1. Procurement of Letters of Credit. During the period from the
date hereof to (but excluding) the 30th day prior to the last day of the
Original Term or any applicable Renewal Term, and provided no Default or Event
of Default exists, CIT agrees to establish the LC Facility pursuant to which CIT
shall procure from Bank one or more Letters of Credit on Borrower's request
therefor from time to time, subject to the following terms and conditions:
(i) Borrower acknowledges that Bank's willingness to
issue any Letter of Credit is conditioned upon Bank's receipt of (A)
the LC Support duly executed and delivered to Bank by CIT, (B) an LC
Application with respect to the requested Letter of Credit and (C) such
other instruments and agreements as Bank may customarily require for
the issuance of a letter of credit of equivalent type and amount as the
requested Letter of Credit. CIT shall have no obligation to execute any
LC Support or to join with Borrower in executing an LC Application
unless (x) CIT receives an LC Request from Borrower at least 5 Business
Days
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prior to the date on which Borrower desires to submit such LC
Application to Bank and (y) each of the LC Conditions is satisfied on
the date of CIT's receipt of the LC Request and at the time of the
requested execution of the LC Application. Any Letter of Credit issued
on the Closing Date shall be for an amount in Dollars that is greater
than $250,000. In no event shall CIT or any other Lender have any
liability or obligation to Borrower or any Subsidiary for any failure
or refusal by Bank to issue, for Bank's delay in issuing, or for any
error of Bank in issuing any Letter of Credit.
(ii) Letters of Credit may be requested by Borrower only
if they are to be used (a) to support obligations of Borrower incurred
in the ordinary course of business of Borrower, as presently conducted,
on a standby basis or (b) for such other purposes as Agent and Lenders
may approve from time to time in writing.
(iii) Borrower shall comply with all of the terms and
conditions imposed on Borrower by Bank, whether such terms and
conditions are contained in an LC Application or in any agreement with
respect thereto, and subject to the rights of Bank, CIT shall have the
same rights and remedies that Bank has under any agreements that
Borrower may have with Bank in addition to any rights and remedies
contained in any of the Loan Documents. Borrower agrees to reimburse
Bank for any draw under any Letter of Credit as hereinafter provided,
and to pay Bank the amount of all other liabilities and obligations
payable to Bank under or in connection with any Letter of Credit
immediately when due, irrespective of any claim, setoff, defense or
other right that Borrower may have at any time against Bank or any
other Person. If CIT shall pay any amount under a LC Support with
respect to any Letter of Credit, then Borrower shall pay to CIT, in
Dollars on the first Business Day following the date on which payment
was made by CIT under such LC Support (the "Reimbursement Date"), an
amount equal to the amount paid by CIT under such LC Support together
with interest from and after the Reimbursement Date until payment in
full is made by Borrower at the Default Rate for Revolving Loans
constituting Chase Bank Rate Loans. Until CIT has received payment from
Borrower in accordance with the foregoing provisions of this clause
(iii), CIT, in addition to all of its other rights and remedies under
this Agreement, shall be fully subrogated to (A) the rights and
remedies of Bank as issuer of the Letter of Credit under any agreement
with Borrower relating to the issuance of such Letter of Credit, and
(B) the rights and remedies of each beneficiary under such Letter of
Credit whose claims against Borrower has been discharged with the
proceeds of such Letter of Credit. Whether or not Borrower submits any
Notice of Borrowing to Agent, Borrower shall be deemed to have
requested from Lenders a Borrowing of Chase Bank Rate Loans in an
amount necessary to pay to CIT all amounts due CIT on any Reimbursement
Date and each Lender agrees to fund its Pro Rata share of such
Borrowing whether or not any Default or Event of Default has occurred
or exists, the Commitments have been terminated, the funding of the
Borrowing deemed requested by Borrower would result in, or increase the
amount of, any Out-of-Formula Condition, or any of the conditions set
forth in SECTION 2 hereof are not satisfied.
(iv) Borrower assumes all risks of the acts, omissions or
misuses of any Letter of
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Credit by the beneficiary thereof. The obligation of Borrower to
reimburse CIT for any payment made by CIT under the LC Support shall be
absolute, unconditional and irrevocable and shall be paid without
regard to any lack of validity or enforceability of any Letter of
Credit, the existence of any claim, setoff, defense or other right
which Borrower may have at any time against a beneficiary of any Letter
of Credit, or improper honor by Bank of any draw request under a Letter
of Credit. If presentation of a demand, draft, certificate or other
document does not comply with the terms of a Letter of Credit and
Borrower contends that, as a consequence of such noncompliance it has
no obligation to reimburse Bank for any payment made with respect
thereto, Borrower shall nevertheless be obligated to reimburse CIT for
any payment made under the LC Support with respect to such Letter of
Credit, but without waiving any claim Borrower may have against Bank in
connection therewith. All disputes regarding any Letter of Credit shall
be resolved by Borrower directly with Bank.
(v) No Letter of Credit shall be extended or amended in
any respect that is not solely ministerial, unless all of the LC
Conditions are met as though a new Letter of Credit were being
requested and issued.
(vi) Borrower hereby authorizes and directs Bank to
deliver to CIT all instruments, documents and other writings and
Property received by Bank pursuant to or in connection with any Letter
of Credit and to accept and rely upon CIT's instructions and agreements
with respect to all matters arising in connection with such Letter of
Credit and the related LC Application.
3.3.2. Participations.
(i) Immediately upon the issuance by Bank of any Letter
of Credit, each Lender (other than CIT) shall be deemed to have
irrevocably and unconditionally purchased and received from CIT,
without recourse or warranty, an undivided interest and participation
equal to the Pro Rata share of such Lender (a "Participating Lender")
in all LC Outstandings arising in connection with such Letter of Credit
and any security therefor or guaranty pertaining thereto, but in no
event greater than an amount which, when added to such Lender's Pro
Rata share of all Revolving Loans and LC Outstandings then outstanding,
exceeds such Lender's Revolving Commitment.
(ii) If CIT makes any payment under an LC Support and
Borrower does not repay or cause to be repaid the amount of such
payment on the Reimbursement Date, CIT shall promptly notify Agent,
which shall promptly notify each Participating Lender, of such payment
and each Participating Lender shall promptly (and in any event within 1
Business Day after its receipt of notice from Agent) and
unconditionally pay to Agent, for the account of CIT, in immediately
available funds, the amount of such Participating Lender's Pro Rata
share of such payment, and Agent shall promptly pay such amounts to
CIT. If a Participating Lender does not make its Pro Rata share of the
amount of such payment available to Agent on a timely basis as herein
provided, such Participating Lender
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agrees to pay to Agent for the account of CIT, forthwith ON DEMAND,
such amount together with interest thereon at the Federal Funds Rate
until paid. The failure of any Participating Lender to make available
to Agent for the account of CIT such Participating Lender's Pro Rata
share of the LC Outstandings shall not relieve any other Participating
Lender of its obligation hereunder to make available to Agent its Pro
Rata share of the LC Outstandings, but no Participating Lender shall be
responsible for the failure of any other Participating Lender to make
available to Agent its Pro Rata share of the LC Outstandings on the
date such payment is to be made.
(iii) Whenever CIT receives a payment on account of the LC
Outstandings, including any interest thereon, as to which Agent has
previously received payments from any Lender for the account of CIT,
CIT shall promptly pay to each Participating Lender which has funded
its participating interest therein, in immediately available funds, an
amount equal to such Participating Lender's Pro Rata share thereof.
(iv) The obligation of each Participating Lender to make
payments to Agent for the account of CIT in connection with Agent's
payment under a LC Support shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or
exception whatsoever (other than for CIT's gross negligence or willful
misconduct), and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances and irrespective
of whether or not Borrower may assert or have any claim for any lack of
validity or unenforceability of this Agreement or any of the other Loan
Documents; the existence of any Default or Event of Default; any draft,
certificate or other document presented under a Letter of Credit having
been determined to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect; the existence of any setoff or defense any Obligor may have
with respect to any of the Obligations; or the termination of the
Commitments.
(v) Neither CIT nor any of its officers, directors,
employees or agents shall be liable to any Participating Lender for any
action taken or omitted to be taken under or in connection with any of
the LC Documents except as a result of actual gross negligence or
willful misconduct on the part of CIT. CIT does not assume any
responsibility for any failure or delay in performance or breach by
Borrower or any other Person of any of its obligations under any of the
LC Documents. CIT does not make to Participating Lenders any express or
implied warranty, representation or guaranty with respect to the
Collateral, the LC Documents, or any Obligor. CIT shall not be
responsible to any Participating Lender for any recitals, statements,
information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of or
any of the LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any of the Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal
status of Borrower or any other Obligor or any Account Debtor. In
connection with its administration of and enforcement of rights or
remedies under any of the LC Documents, CIT shall be entitled to
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act, and shall be fully protected in acting upon, any certification,
notice or other communication in whatever form believed by CIT, in good
faith, to be genuine and correct and to have been signed, sent or made
by a proper Person. CIT may consult with and employ legal counsel,
accountants and other experts and to advise it concerning its rights,
powers and privileges under the LC Documents and shall be entitled to
act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts. CIT may employ
agents and attorneys-in-fact in connection with any matter relating to
the LC Documents and shall not be liable for the negligence, default or
misconduct of any such agents or attorneys-in-fact selected by CIT with
reasonable care. CIT shall not have any liability to any Participating
Lender by reason of CIT's refraining to take any action under any of
the LC Documents without having first received written instructions
from the Required Lenders to take such action.
(vi) Upon the request of any Participating Lender, CIT
shall furnish to such Participating Lender copies (to the extent then
available to CIT) of each outstanding Letter of Credit and related LC
Application and all other documentation pertaining to such Letter of
Credit as may be in the possession of CIT and reasonably requested from
time to time by such Participating Lender.
3.3.3. Cash Collateral Account. If any LC Outstandings, whether or
not then due or payable, shall for any reason be outstanding (i) at any time
when an Event of Default has occurred and is continuing, (ii) on any date that
Availability is less than zero, or (iii) on or at any time after the Commitment
Termination Date, then Borrower shall, on Agent's or CIT's request, forthwith
deposit with Agent, in cash, an amount equal to the aggregate amount of LC
Outstandings. If Borrower fails to make such deposit on the first Business Day
following Agent's or CIT's demand therefor, Lenders may (and shall upon
direction of the Required Lenders) advance such amount as Revolving Loans
(whether or not an Out-of-Formula Condition is created thereby). Such cash
(together with any interest accrued thereon) shall be held by Agent in the Cash
Collateral Account and may be invested, in Agent's discretion, in Cash
Equivalents. Borrower hereby pledges to Agent and grants to Agent a security
interest in, for the benefit of CIT in such capacity and for the Pro Rata
benefit of Lenders, all Cash Collateral held in the Cash Collateral Account from
time to time and all proceeds thereof, as security for the payment of all
Obligations, whether or not then due or payable. From time to time after cash is
deposited in the Cash Collateral Account, Agent may apply Cash Collateral then
held in the Cash Collateral Account to the payment of any amounts, in such order
as Agent may elect, as shall be or shall become due and payable by Borrower to
CIT or any Lender with respect to the LC Outstandings that may be then
outstanding. Neither Borrower nor any other Person claiming by, through or under
or on behalf of Borrower shall have any right to withdraw any of the Cash
Collateral held in the Cash Collateral Account, including any accrued interest,
provided that upon termination or expiration of all Letters of Credit and the
payment and satisfaction of all of the LC Outstandings outstanding, any Cash
Collateral remaining in the Cash Collateral Account shall be returned to
Borrower unless an Event of Default then exists (in which event Agent may apply
such Cash Collateral to the payment of any other Obligations outstanding, with
any surplus to be turned over to Borrower).
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3.3.4. Indemnifications.
(i) In addition to any other indemnity which Borrower may
have to Agent or any Lender under any of the other Loan Documents and
without limiting such other indemnification provisions, Borrower hereby
agrees to indemnify and defend each of the Agent Indemnitees and Lender
Indemnitees and to hold each of the Agent Indemnitees and Lender
Indemnitees harmless from and against any and all Claims which any of
the Agent Indemnitees or any of the Lender Indemnitees may (other than
as the actual result of their own gross negligence or willful
misconduct) incur or be subject to as a consequence, directly or
indirectly, of (a) the issuance of, payment or failure to pay or any
performance or failure to perform under any Letter of Credit or LC
Support or (b) any suit, investigation or proceeding as to which Agent
or any Lender is or may become a party to as a consequence, directly or
indirectly, of the issuance of any Letter of Credit or any LC Support
or the payment or failure to pay thereunder.
(ii) Each Participating Lender agrees to indemnify and
defend each of the CIT Indemnitees (to the extent the CIT Indemnitees
are not reimbursed by Borrower or any other Obligor, but without
limiting the indemnification obligations of Borrower under this
Agreement), on a Pro Rata basis, from and against any and all Claims
which may be imposed on, incurred by or asserted against any of the CIT
Indemnitees in any way related to or arising out of CIT's
administration or enforcement of rights or remedies under any of the LC
Documents or any of the transactions contemplated thereby (including
costs and expenses which Borrower is obligated to pay under SECTION
14.2 hereof), provided that no Participating Lender shall be liable to
any of the CIT Indemnitees for any of the foregoing to the extent that
they result solely from the willful misconduct or gross negligence of
such CIT Indemnitees.
SECTION 4. INTEREST, FEES AND CHARGES
4.1. INTEREST.
4.1.1. Rates of Interest. Borrower agrees to pay interest in respect
of all unpaid principal amounts of the Loans from the respective dates such
principal amounts are advanced until paid (whether at stated maturity, on
acceleration or otherwise) at a rate per annum equal to the following applicable
rates:
(i) (a) for Revolving Loans outstanding as Chase Bank
Rate Loans, the Chase Bank Rate in effect from time to time; and (b)
for Revolving Loans outstanding as LIBOR Rate Loans, 3.0% plus the
relevant Adjusted LIBOR Rate for the applicable Interest Period
selected by Borrower in conformity with this Agreement.
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(ii) Upon determining the Adjusted LIBOR Rate for any
Interest Period requested by Borrower, Agent shall promptly notify
Borrower thereof by telephone and, if so requested by Borrower, confirm
the same in writing. Such determination shall, absent manifest error,
be final, conclusive and binding on all parties and for all purposes.
The applicable rate of interest for all Loans (or portions thereof)
bearing interest based upon the Chase Bank Rate shall be increased or
decreased, as the case may be, by an amount equal to any increase or
decrease in the Chase Bank Rate, with such adjustments to be effective
as of the opening of business on the day that any such change in the
Chase Bank Rate becomes effective. Interest on each Loan shall accrue
from and including the date on which such Loan is made, converted to a
Loan of another type or continued as a LIBOR Loan to (but excluding)
the date of any repayment thereof; provided, however, that, if a
Revolving Loan is repaid on the same day made, one day's interest shall
be paid on such Revolving Loan. The Chase Bank Rate on the date hereof
is 6.5% per annum.
4.1.2. Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrower
shall select an interest period (each an "Interest Period") to be applicable to
such LIBOR Loan, which interest period shall commence on the date such LIBOR
Loan is made and shall end on a numerically corresponding day in the first,
second or third month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Loan shall
commence on the date such Loan is made (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Loan shall commence on the date
on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that if any Interest Period
in respect of LIBOR Loans would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) any Interest Period that begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period shall expire on the last Business Day of
such calendar month;
(iv) no Interest Period with respect to any portion of
principal of a Loan shall extend beyond a date on which Borrower is
required to make a scheduled payment of such portion of principal;
(v) no Interest Period shall extend beyond the last day
of the Original Term or of any Renewal Term; and
(vi) there shall be no more than 4 Interest Periods in
effect at any one time.
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4.1.3. Conversions and Continuations.
(i) Borrower may on any Business Day, subject to the
giving of a proper Notice of Conversion/Continuation as hereinafter
described, elect (A) to continue all or any part of a LIBOR Loan by
selecting a new Interest Period therefor, to commence on the last day
of the immediately preceding Interest Period, or (B) to convert all or
any part of a Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loan may be converted into a LIBOR Loan or
continued as a LIBOR Loan after the expiration of the Interest Period
applicable thereto when any Default or Event of Default exists. Any
conversion of a LIBOR Loan into a Chase Bank Rate Loan shall be made on
the last day of the Interest Period for such LIBOR Loan.
(ii) Whenever Borrower desires to convert or continue
Loans under SECTION 4.1.3(I), Borrower shall give Agent written notice
(or telephonic notice promptly confirmed in writing) substantially in
the form of EXHIBIT B , signed by an authorized officer of Borrower, on
the requested conversion date by 11:00 a.m., in the case of a
conversion into Chase Bank Rate Loans, and by 11:00 a.m. at least 2
Business Days before the requested conversion or continuation date, in
the case of a conversion into or continuation of LIBOR Loans. Each such
Notice of Conversion/Continuation shall be irrevocable and shall
specify the aggregate principal amount of the Loans to be converted or
continued, the date of such conversion or continuation (which shall be
a Business Day) and whether the Loans are being converted into or
continued as LIBOR Loans (and, if so, the duration of the Interest
Period to be applicable thereto) or Chase Bank Rate Loans. If, upon the
expiration of any Interest Period in respect of any LIBOR Loans,
Borrower shall have failed to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to
convert such LIBOR Loans to Chase Bank Rate Loans.
4.1.4. Interest Rate Not Ascertainable. If Agent shall determine
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the Adjusted LIBOR
Rate for any Interest Period, by reason of any changes arising after the date of
this Agreement affecting the London interbank market or Agent's, a Lender's or
Bank's position in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrower of such
determination. Until Agent notifies Borrower that the circumstances giving rise
to the suspension described herein no longer exist, the obligation of Lenders to
make LIBOR Loans shall be suspended, and such affected Loans then outstanding
shall, at the end of the then applicable Interest Period or at such earlier time
as may be required by Applicable Law, bear the same interest as Chase Bank Rate
Loans.
4.1.5. Default Rate. Interest shall accrue at the Default Rate (i)
with respect to the principal amount of any portion of the Obligations (and, to
the extent permitted by Applicable Law, all past due interest) that is not paid
on the due date thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise) until paid in full, and (ii) with respect to the
principal amount of all
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of the Obligations (and, to the extent permitted by Applicable Law, all past due
interest) upon the earlier to occur of (x) Borrower's receipt of notice of
Agent's election to charge the Default Rate based upon the existence of any
Event of Default or (y) the commencement by or against Borrower of an Insolvency
Proceeding. Borrower acknowledges that the cost and expense to Agent attendant
upon the occurrence of an Event of Default are difficult to ascertain or
estimate and that the Default Rate is a fair and reasonable estimate to
compensate Agent for such added cost and expense.
4.2. FEES.
4.2.1. Loan Facility Fee. Borrower shall pay to Agent a loan facility
fee of $150,000, which shall be deemed fully earned as of the Closing Date.
4.2.2. Line of Credit Fee. Borrower shall pay to Agent each month, on
the first day of the month, commencing October 1, 2001, a fee equal to .125% per
annum of the amount by which the Average Monthly Loan Balance for the
immediately preceding month is less than the maximum dollar amount of the
Commitments in effect at any date of determination.
4.2.3. Administrative Management Fee. Borrower shall pay to Agent a
Administrative Management Fee in the amount of $50,000 which shall be deemed
fully earned as of the Closing Date and on each Anniversary Date thereafter.
4.2.4. LC Guaranty Fees. In addition to Borrower's obligation to pay
to Bank all fees and normal and customary charges associated with the issuance
and administration of each Letter of Credit, Borrower shall pay to Agent:
(i) for CIT's LC Guaranty of each standby Letter of
Credit, a fee equal to 3% per annum of the aggregate face amount of
such Letter of Credit outstanding from time to time during the term of
this Agreement which shall be due and payable on the first Business Day
of each month, and an additional fee equal to 3% per annum of the face
amount of such Letter of Credit payable upon each renewal thereof and
each extension thereof, all of which fees and charges shall be deemed
fully earned upon issuance, renewal or extension (as the case may be)
of each such Letter of Credit, and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason; and
(ii) for CIT's LC Guaranty of each documentary Letter of
Credit, a fee equal to 3% per annum of the face amount of each such
Letter of Credit, payable upon the issuance of such Letter of Credit
and an additional fee equal to 3% per annum of the face amount of such
Letter of Credit payable upon each renewal thereof, and each extension
thereof, which fees and charges shall be fully earned upon issuance,
renewal or extension (as the case may be) of each such Letter of
Credit, shall be due and payable on the first Business Day of each
month, and shall not be subject to rebate or proration upon the
termination of this Agreement for any reason.
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4.2.5. Audit, Appraisal and Other Fees. Borrower shall reimburse
Agent for all reasonable costs and expenses incurred by Agent in connection with
all audits and appraisals of Borrower's books and records and such other matters
pertaining to Borrower or any Collateral as Agent shall deem appropriate up to
an amount equal to $750 per day per auditor, plus out-of-pocket expenses,
provided that for so long as any Default or Event of Default shall exist, Agent
may retain an independent accounting firm to conduct any such audit or
appraisal, and Borrower shall reimburse Agent for all reasonable costs and
expenses incurred by Agent in connection therewith. Agent may retain from time
to time an accounting or audit firm to conduct a physical count of Borrower's
Inventory no more frequently than once during any fiscal year of Borrower and,
for so long as no Event of Default shall exist, Borrower shall have no
obligation to reimburse Agent for any charges or expenses incurred by Agent in
connection therewith.
4.2.6. LIBOR Election Fee. Borrower shall pay to Agent a fee of $500
on the effective date of Borrower's election to convert any Chase Bank Rate
Loans to a LIBOR Loan, which fee shall defray Agent's costs for processing such
election and shall be deemed fully earned upon any such election.
4.2.7. General Provisions Relating to Fees. All fees shall be fully
earned by Agent when due and payable and, except as otherwise set forth herein
or required by Applicable Law, shall not be subject to refund, rebate or
proration. All fees provided for in SECTION 4.2 hereof are and shall be deemed
to be for compensation for services and are not, and shall not be deemed to be,
interest or any other charge for the use, forbearance or detention of money.
4.3. COMPUTATION OF INTEREST AND FEES. All interest, fees and other
charges hereunder shall be calculated daily and shall be computed on the actual
number of days elapsed over a year of 360 days. For the purpose of computing
interest hereunder, all Payment Items received by Agent shall be deemed applied
by Agent on account of the Obligations (subject to final payment of any payment
items) on the next Business Day after receipt by Agent of such payment in
Agent's Payment Account located in New York, New York, and Agent shall be deemed
to have received such payment on the date specified in SECTION 5.5 hereof.
4.4. REIMBURSEMENT OF EXPENSES. Borrower shall reimburse Agent and,
if an Event of Default then exists, each Lender, for all reasonable legal,
accounting, appraisal and other fees and expenses incurred by Agent or any
Lender in connection with (i) the negotiation and preparation of any of the Loan
Documents, any amendment or modification thereto, any waiver of any Default or
Event of Default thereunder, or any restructuring or forbearance with respect
thereto; (ii) the administration of the Loan Documents and the transactions
contemplated thereby, to the extent that such fees and expenses are expressly
provided for in this Agreement or any of the other Loan Documents; (iii) action
taken to perfect or maintain the perfection or priority of any of Agent's Liens
with respect to any of the Collateral; (iv) any inspection of or audits
conducted with respect to any of Borrower's books and records or any of the
Collateral; (v) any effort to verify, protect, preserve, or restore any of the
Collateral or to collect, sell, liquidate or otherwise dispose of or realize
upon any of the Collateral; (vi) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by
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or against Agent, any Lender, any Obligor or any other Person) in any way
arising out of or relating to any of the Collateral (or the validity, perfection
or priority of any of Agent's Liens thereon), any of the Loan Documents or the
validity, allowance or amount of any of the Obligations; (vii) the protection or
enforcement or any rights or remedies of Agent or any Lender in any Insolvency
Proceeding; and (viii) any other action taken by Agent or any Lender to enforce
any of the rights or remedies of Agent or such Lender against any Obligor or any
Account Debtors to enforce collection of any of the Obligations or payments with
respect to any of the Collateral. All amounts chargeable to Borrower under this
SECTION 4.4 shall constitute Obligations that are secured by all of the
Collateral and shall be payable ON DEMAND to Agent. Borrower shall also
reimburse Agent for reasonable expenses incurred by Agent and its administration
of any of the Collateral to the extent and in the manner provided in SECTION 8
hereof or in any of the other Loan Documents. The foregoing shall not be
construed to limit any other provision of any of the Loan Documents regarding
the reimbursement of costs or expenses by Borrower to Agent or any Lender.
4.5. BANK CHARGES. Borrower shall pay to Agent, ON DEMAND, any and
all fees, costs or expenses which Agent or any Lender pays to a bank or other
similar institution (including any fees paid by Agent or any Lender to any
Participant) arising out of or in connection with (i) the forwarding to Borrower
or any other Person on behalf of Borrower by Agent or any Lender of proceeds of
Loans made by Lenders to Borrower pursuant to this Agreement and (ii) the
depositing for collection by Agent or any Lender of any Payment Item received or
delivered to Agent or any Lender on account of the Obligations. Borrower
acknowledges and agrees that Agent may charge such costs, fees and expenses to
Borrower based upon Agent's good faith estimate of such costs, fees and expenses
as they are incurred by Agent or any Lender.
4.6. ILLEGALITY. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (i) any change in any law or regulation or in
the interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Lender to make or maintain a
LIBOR Loan or to give effect to its obligations as contemplated hereby with
respect to a LIBOR Loan or (ii) at any time such Lender determines that the
making or continuance of any LIBOR Loan has become impracticable as a result of
a contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in such market, then such Lender
shall give after such determination Agent and Borrower notice thereof and may
thereafter (1) declare that LIBOR Loans will not thereafter be made by such
Lender, whereupon any request by a Borrower for a LIBOR Loan shall be deemed a
request for a Base Rate Loan unless such Lender's declaration shall be
subsequently withdrawn (which declaration shall be withdrawn promptly after the
cessation of the circumstances described in clause (i) or (ii) above); and (2)
require that all outstanding LIBOR Loans made by such Lender be converted to
Base Rate Loans, under the circumstances of clause (i) or (ii) of this SECTION
4.6 insofar as such Lender determines the continuance of LIBOR Loans to be
impracticable, in which event all such LIBOR Loans shall be converted
automatically to Base Rate Loans as of the date of Borrower's receipt of the
aforesaid notice from such Lender.
4.7. INCREASED COSTS. If, by reason of (a) the introduction after
the date hereof of or any
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change (including any change by way of imposition or increase of Statutory
Reserves or other reserve requirements) in or in the interpretation of any law
or regulation, or (b) the compliance with any guideline or request from any
central bank or other Governmental Authority or quasi-Governmental Authority
exercising control over banks or financial institutions generally (whether or
not having the force of law):
(i) any Lender shall be subject after the date hereof to
any Taxes, duty or other charge with respect to any LIBOR Loan or its
obligation to make LIBOR Loans, or a change shall result in the basis
of taxation of payment to any Lender of the principal of or interest on
its LIBOR Loans or its obligation to make LIBOR Loans (except for
changes in the rate of Tax on the overall net income of such Lender
imposed by the jurisdiction in which such Lender's principal executive
office is located); or
(ii) any reserve (including any imposed by the Board of
Governors), special deposits or similar requirement against assets of,
deposits with or for the account of, or credit extended by, Lender
shall be imposed or deemed applicable or any other condition affecting
its LIBOR Loans or its obligation to make LIBOR Loans shall be imposed
on such Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Loans), or there shall be a reduction in the amount received or
receivable by such Lender, then such Lender shall, promptly after determining
the existence or amount of any such increased costs for which such Lender seeks
payment hereunder, give Borrower notice thereof and Borrower shall from time to
time, upon written notice from and demand by such Lender (with a copy of such
notice and demand to Agent), pay to Agent for the account of such Lender, within
5 Business Days after the date specified in such notice and demand, an
additional amount sufficient to indemnify such Lender against such increased
costs. A certificate as to the amount of such increased cost, submitted to
Borrower by such Lender, shall be final, conclusive and binding for all
purposes, absent manifest error.
If any Lender shall advise Agent at any time that, because of the
circumstances described hereinabove in this SECTION 4.7 or any other
circumstances arising after the date of this Agreement affecting such Lender or
the London interbank market or such Lender's or Bank's position in such market,
the Adjusted LIBOR Rate, as determined by Agent, will not adequately and fairly
reflect the cost to such Lender of funding LIBOR Loans, then, and in any such
event:
(i) Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and Lenders of such event;
(ii) Borrower's right to request and such Lender's
obligation to make LIBOR Loans shall be immediately suspended and
Borrower's right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each
condition
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giving rise to such suspension no longer exists; and
(iii) such Lender shall make a Base Rate Loan as part of
the requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for
all purposes, be considered part of such Borrowing.
For purposes of this SECTION 4.7, all references to a Lender shall be
deemed to include any bank holding company or bank parent of such Lender.
4.8. CAPITAL ADEQUACY. If any Lender determines that after the date
hereof (a) the adoption of any Applicable Law regarding capital requirements for
banks or bank holding companies or the subsidiaries thereof, (b) any change in
the interpretation or administration of any such Applicable Law by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or (c) compliance by such Lender or
its holding company with any request or directive of any such Governmental
Authority, central bank or comparable agency regarding capital adequacy (whether
or not having the force of law), has the effect of reducing the return on such
Lender's capital to a level below that which such Lender could have achieved
(taking into consideration such Lender's and its holding company's policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) but for such adoption, change or compliance
as a consequence of such Lender's commitment to make the Loans pursuant hereto
by any amount deemed by such Lender to be material:
(i) Agent shall promptly, after its receipt of a
certificate from such Lender setting forth such Lender's determination
of such occurrence, give notice thereof to Borrower and Lenders; and
(ii) Borrower shall pay to Agent, for the account of such
Lender, as an additional fee from time to time, ON DEMAND, such amount
as such Lender certifies to be the amount reasonably calculated to
compensate such Lender for such reduction.
A certificate of such Lender claiming entitlement to compensation as
set forth above will be conclusive in the absence of manifest error. Such
certificate will set forth the nature of the occurrence giving rise to such
compensation, the additional amount or amounts to be paid to such Lender
(including the basis for such Lender's determination of such amount), and the
method by which such amounts were determined. In determining such amount, such
Lender may use any reasonable averaging and attribution method. For purposes of
this SECTION 4.8 all references to a Lender shall be deemed to include any bank
holding company or bank parent of such Lender.
4.9. FUNDING LOSSES. If for any reason (other than due to a default
by a Lender or as a result of a Lender's refusal to honor a LIBOR Loan request
due to circumstances described in SECTION 4.6 OR 4.7 hereof) a Borrowing of, or
conversion to or continuation of, LIBOR Loans does not occur on the date
specified therefor in a Notice of Borrowing or Notice of Conversion/
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Continuation (whether or not withdrawn), or if any repayment (including any
conversions pursuant to SECTION 4.1.3 hereof) of any of its LIBOR Loans occurs
on a date that is not the last day of an Interest Period applicable thereto, or
if for any reason Borrower defaults in its obligation to repay LIBOR Loans when
required by the terms of this Agreement, then Borrower shall pay to Agent, for
the ratable benefit of the affected Lenders, within 10 days after Agent's or an
affected Lender's demand therefor, an amount (if a positive number) computed
pursuant to the following formula:
L = (R - T) x P x D
---------------
360
where
L = amount payable
R = interest rate applicable to the LIBOR
Loan unborrowed or prepaid
T = effective interest rate per annum at
which any readily marketable bond or other
obligations of the United States, selected
at Agent's sole discretion, maturing on or
nearest the last day of the then applicable
or requested Interest Period for such LIBOR
Loan and in approximately the same amount as
such LIBOR Loan, can be purchased by Agent
on the day of such payment of principal or
failure to borrow
P = the amount of principal paid or the
amount of the LIBOR Loan requested or to
have been continued or converted
D = the number of days remaining in the
Interest Period as of the date of such
prepayment or the number of days in the
requested Interest Period
Borrower shall pay such amount upon presentation by Agent of a statement
setting forth the amount and Agent's calculation thereof pursuant hereto, which
statement shall be deemed true and correct absent manifest error. For purposes
of this SECTION 4.9, all references to a Lender shall be deemed to include any
bank holding company or bank parent of such Lender. The calculations of all
amounts payable to Lenders under this SECTION 4.9 shall be made as though each
Lender had actually funded or committed to fund its LIBOR Loan through the
purchase for an underlying deposit in an amount equal to the amount of such
LIBOR Loan and having a maturity comparable to the relevant Interest Period for
such LIBOR Loan; provided, however, each Lender may fund its LIBOR Loans in any
manner it deems fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this SECTION 4.9.
SECTION 5. LOAN ADMINISTRATION
5.1. MANNER OF BORROWING REVOLVING LOANS. Borrowings under the
credit facility established pursuant to SECTION 3.1 hereof shall be as follows:
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5.1.1. Notice of Borrowing.
(i) Whenever Borrower desires to obtain a Revolving Loan
under SECTION 3.1 of this Agreement (other than a Borrowing resulting
from a conversion or continuation pursuant to SECTION 4.1.3), Borrower
shall give Agent prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrowing request (a "Notice of
Borrowing"), which shall be in the form of EXHIBIT B annexed hereto and
signed by an authorized officer of Borrower. Such Notice of Borrowing
shall be given by Borrower to Agent no later than 1:30 p.m., New York
time, (a) on the Business Day of the requested funding date of such
Borrowing, in the case of a Chase Bank Rate Loan, and (b) at least 3
Business Days prior to the requested funding date of such Borrowing, in
the case of a LIBOR Loan. Notices received after 1:30 p.m., New York
time, shall be deemed received on the next Business Day. Revolving
Loans made by Agent on the Closing Date shall be in the principal
amount of at least $250,000 and shall be made as Chase Bank Rate Loans
and thereafter may be made or continued as, or converted into, Chase
Bank Rate Loans or LIBOR Loans. Each Notice of Borrowing (or telephonic
notice thereof) shall be irrevocable and shall specify (a) the
principal amount of the Borrowing, (b) the date of Borrowing (which
shall be a Business Day), (c) whether the Borrowing is to consist of
Chase Bank Rate Loans or LIBOR Loans, (d) in the case of LIBOR Loans,
the duration of the Interest Period to be applicable thereto, and (e)
the account of Borrower to which the proceeds of such Borrowing are to
be disbursed. Borrower may not request any LIBOR Loans if a Default or
Event of Default exists.
(ii) Unless payment is otherwise timely made by Borrower,
the becoming due of any amount required to be paid under this Agreement
or any of the other Loan Documents as principal, accrued interest, fees
or other charges shall be deemed irrevocably to be a request for
Revolving Loans on the due date of (a "Deemed Request"), and in an
aggregate amount required to pay, such principal, accrued interest,
fees or other charges, and the proceeds of such Revolving Loans may be
disbursed by way of direct payment of the relevant Obligation and shall
bear interest as Chase Bank Rate Loans. Agent shall have no obligation
to Borrower to honor any Deemed Request for a Revolving Loan, but may
do so in its discretion without regard to the existence or creation of,
and without being deemed to have waived, any Default, Event of Default
or Out-of-Formula Condition.
(iii) As an accommodation to Borrower, Agent may permit
telephonic requests for Borrowings and electronic transmittal of
instructions, authorizations, agreements or reports to Agent by
Borrower; provided, however, that Borrower shall confirm each such
telephonic request for a Borrowing of LIBOR Loans by delivery of the
required Notice of Borrowing to Agent by facsimile transmission
promptly, but in no event later than 5:00 p.m. on the same day. Unless
Borrower specifically directs Agent in writing not to accept or act
upon telephonic or electronic communications from Borrower, Agent shall
not have any liability to Borrower for any loss or damage suffered by
Borrower as a result of Agent's honoring of any requests, execution of
any instructions, authorizations or agreements or reliance on any
reports communicated to it telephonically or electronically and
purporting to have been sent to Agent by Borrower and Agent
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shall not have any duty to verify the origin of any such communication
or the identity or authority of the Person sending it.
5.1.2. Fundings by Lenders. Subject to its receipt of notice from
Agent of a Notice of Borrowing as provided in SECTION 5.1.1(i) (except in the
case of a deemed request by Borrower for a Revolving Loan as provided in
SECTIONS 5.1.1(II) or 5.1.3(II) hereof, in which event no Notice of Borrowing
need be submitted), each Lender shall timely honor its Revolving Commitment by
funding its Pro Rata share of each Borrowing of Revolving Loans that is properly
requested by Borrower and that Borrower is entitled to receive under the Loan
Agreement. Agent shall endeavor to notify Lenders of each Notice of Borrowing
(or deemed request for a Borrowing pursuant to SECTION 5.1.1(II) hereof), by
12:00 noon on the proposed funding date (in the case of Chase Bank Rate Loans)
or by 2:00 p.m. at least 2 Business Days before the proposed funding date (in
the case of LIBOR Loans). Each Lender shall deposit with Agent an amount equal
to its Pro Rata share of the Borrowing requested or deemed requested by Borrower
at Agent's designated bank in immediately available funds not later than 2:00
p.m. on the date of funding of such Borrowing, unless Agent's notice to Lenders
is received after 12:00 noon on the proposed funding date of a Chase Bank Rate
Loan, in which event Lenders shall deposit with Agent their respective Pro Rata
shares of the requested Borrowing on or before 11:00 a.m. of the next Business
Day. Subject to its receipt of such amounts from Lenders, Agent shall make the
proceeds of the Revolving Loans received by it available to Borrower by
disbursing such proceeds in accordance with Borrower's disbursement instructions
set forth in the applicable Notice of Borrowing. Unless Agent shall have been
notified in writing by a Lender prior to the proposed time of funding that such
Lender does not intend to deposit with Agent an amount equal such Lender's Pro
Rata share of the requested Borrowing (or deemed request for a Borrowing
pursuant to SECTION 5.1.1(II) hereof), Agent may assume that such Lender has
deposited or promptly will deposit its share with Agent and Agent may in its
discretion disburse a corresponding amount to Borrower on the applicable funding
date. If a Lender's Pro Rata share of such Borrowing is not in fact deposited
with Agent, then, if Agent has disbursed to Borrower an amount corresponding to
such share, then such Lender agrees to pay, and in addition Borrower agrees to
repay, to Agent forthwith on demand such corresponding amount, together with
interest thereon, for each day from the date such amount is disbursed by Agent
to or for the benefit of Borrower until the date such amount is paid or repaid
to Agent, (a) in the case of Borrower, at the interest rate applicable to such
Borrowing and (b) in the case of such Lender, at the Federal Funds Rate. If such
Lender repays to Agent such corresponding amount, such amount so repaid shall
constitute a Revolving Loan, and if both such Lender and Borrower shall have
repaid such corresponding amount, Agent shall promptly return to Borrower such
corresponding amount in same day funds. A notice of Agent submitted to any
Lender with respect to amounts owing under this SECTION 5.1.2 shall be
conclusive, absent manifest error.
5.1.3. Settlement and Settlement Loans.
(i) In order to facilitate the administration of the
Revolving Loans under this Agreement, Lenders agree (which agreement
shall not be for the benefit of or enforceable by Borrower) that
settlement among them with respect to the Revolving Loans
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may take place on a periodic basis on dates determined from time to
time by Agent (each a "Settlement Date"), which may occur before or
after the occurrence or during the continuance of a Default or Event of
Default and whether or not all of the conditions set forth in SECTION 2
of this Agreement have been met. On each Settlement Date, payment shall
be made by or to each Lender in the manner provided herein and in
accordance with the Settlement Report delivered by Agent to Lenders
with respect to such Settlement Date so that, as of each Settlement
Date and after giving effect to the transaction to take place on such
Settlement Date, each Lender shall hold its Pro Rata share of all
Revolving Loans and participations in LC Outstandings then outstanding.
Agent shall request settlement with the Lenders on a basis not less
frequently than once every 5 Business Days.
(ii) Between Settlement Dates, Agent may request CIT to
advance, and CIT may, but shall in no event be obligated to, advance to
Borrower out of CIT's own funds the entire principal amount of any
Borrowing of Revolving Loans that are Chase Bank Rate Loans requested
or deemed requested pursuant to this Agreement (any such Revolving Loan
funded exclusively by CIT being referred to as a "Settlement Loan").
Each Settlement Loan shall constitute a Revolving Loan hereunder and
shall be subject to all of the terms, conditions and security
applicable to other Revolving Loans, except that all payments thereon
shall be payable to CIT solely for its own account. The obligation of
Borrower to repay such Settlement Loans to CIT shall be evidenced by
the records of CIT and need not be evidenced by any promissory note.
Agent shall not request CIT to make any Settlement Loan if (A) Agent
shall have received written notice from any Lender that one or more of
the applicable conditions precedent set forth in SECTION 2 hereof will
not be satisfied on the requested funding date for the applicable
Borrowing or (B) the requested Borrowing would exceed the amount of
Availability on the funding date or would cause the then outstanding
principal balance of all Settlement Loans to exceed $2,000,000. Agent
shall not be required to determine whether the applicable conditions
precedent set forth in SECTION 2 hereof have been satisfied or the
requested Borrowing would exceed the amount of Availability on the
funding date applicable thereto prior to making, in its sole
discretion, any Settlement Loan. On each Settlement Date, or, if
earlier, upon demand by Agent for payment thereof, the then outstanding
Settlement Loans shall be immediately due and payable. As provided in
SECTION 5.1.1(II), Borrower shall be deemed to have requested (without
the necessity of submitting any Notice of Borrowing) Revolving Loans to
be made on each Settlement Date in the amount of all outstanding
Settlement Loans and to have Agent cause the proceeds of such Revolving
Loans to be applied to the repayment of such Settlement Loans and
interest accrued thereon. Agent shall notify the Lenders of the
outstanding balance of Revolving Loans prior to 11:00 a.m. on each
Settlement Date and each Lender (other than CIT) shall deposit with
Agent (without setoff, counterclaim or reduction of any kind) an amount
equal to its Pro Rata share of the amount of Revolving Loans deemed
requested in immediately available funds not later than 2:00 p.m. on
such Settlement Date, and without regard to whether any of the
conditions precedent set forth in SECTION 2 hereof are satisfied or the
Commitment Termination Date has occurred. If as the result of the
commencement by or against Borrower of any Insolvency Proceeding or
otherwise any Settlement Loan may not
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be repaid by the funding by Lenders of Revolving Loans, then each
Lender (other than CIT) shall be deemed to have purchased a
participating interest in any unpaid Settlement Loan in an amount equal
to such Lender's Pro Rata share of such Settlement Loan and shall
transfer to Agent, in immediately available funds not later than the
2nd Business Day after Agent's request therefor, the amount of such
Lender's participation. The proceeds of Settlement Loans may be used
solely for purposes for which Revolving Loans generally may be used in
accordance with SECTION 3.1.3 hereof. If any amounts received by CIT in
respect of any Settlement Loans are later required to be returned or
repaid by CIT to Borrower or any other Obligor or their respective
representatives or successors-in-interest, whether by court order,
settlement or otherwise, the other Lenders shall, upon demand by CIT
with notice to Agent, pay to Agent for the account of CIT, an amount
equal to each other Lender's Pro Rata share of all such amounts
required to be returned by CIT.
5.1.4. Disbursement Authorization. Borrower hereby irrevocably
authorizes Agent to disburse the proceeds of each Revolving Loan requested, or
deemed to be requested pursuant to SECTION 5.1.1 or SECTION 5.1.3(II), as
follows: (i) the proceeds of each Revolving Loan requested under SECTION
5.1.1(I) shall be disbursed by Agent in accordance with the terms of the written
disbursement letter from Borrower in the case of the initial Borrowing, and, in
the case of each subsequent Borrowing, by wire transfer to such bank account as
may be agreed upon by Borrower and Agent from time to time or elsewhere if
pursuant to a written direction from Borrower; and (ii) the proceeds of each
Revolving Loan requested under SECTION 5.1.1(II) or SECTION 5.1.3(II) shall be
disbursed by Agent by way of direct payment of the relevant interest or other
Obligation.
5.1.5. Defaulting Lender. If any Lender shall, at any time, fail to
make any payment to Agent or Agent that is required hereunder, Agent may, but
shall not be required to, retain payments that would otherwise be made to such
defaulting Lender hereunder and apply such payments to such defaulting Lender's
defaulted obligations hereunder, at such time, and in such order, as Agent may
elect in its sole discretion. With respect to the payment of any funds from
Agent to a Lender or from a Lender to Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Revolving Loan
shall not relieve any other Lender of its obligation, if any, to fund its
portion of the Revolving Loan on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolving Loan to be
made by such Lender on the date of any Borrowing. Solely as among the Lenders
and solely for purposes of voting or consenting to matters with respect to any
of the Loan Documents, Collateral or any Obligations and determining a
defaulting Lender's Pro Rata share of payments and proceeds of Collateral
pending such defaulting Lender's cure of its defaults hereunder, a defaulting
Lender shall not be deemed to be a "Lender" and such Lender's Commitment shall
be deemed to be zero (0). The provisions of this SECTION 5.2 shall be solely for
the benefit of Agent and Lenders and may not be enforced by Borrower.
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5.2. SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
5.2.1. Number of LIBOR Loans. In no event may the number of
LIBOR Loans outstanding at any time to Agent exceed four (4).
5.2.2. Minimum Payments. Each election of LIBOR Loans
pursuant to Section 5.1.1(i), and each continuation of or conversion to LIBOR
Loans pursuant to Section 4.1.3 hereof, shall be in a minimum amount of
$1,000,000 with respect to any portion of the Loans that bear interest as a
LIBOR Loan and integral multiples of $500,000 in excess of that amount.
5.2.3. LIBOR Lending Office. Agent's initial LIBOR Lending
Office is 1200 Ashwood Parkway, Suite 150, Atlanta, Georgia 30338. Agent shall
have the right at any time and from time to time to designate a different office
of itself or of any Affiliate as Agent's LIBOR Lending Office, and to transfer
any outstanding LIBOR Loans to such LIBOR Lending Office. No such designation or
transfer shall result in any liability on the part of Borrower for increased
costs or expenses resulting solely from such designation or transfer. Increased
costs for expenses resulting from a change in Applicable Law occurring
subsequent to any such designation or transfer shall be deemed not to result
solely from such designation or transfer.
5.3. REPAYMENT OF REVOLVING LOANS.
5.3.1. Payment of Principal. The outstanding principal
amounts with respect to the Revolving Loans shall be due and payable in Dollars
without any offset or counterclaim as follows:
(i) Any portion of the Revolving Loans
consisting of the principal amount of Chase Bank Rate Loans shall be paid by
Borrower to Agent, unless timely converted to a LIBOR Loan in accordance with
this Agreement, immediately upon (a) each receipt by Borrower or Agent of any
proceeds or payments of any of the Collateral, to the extent of such proceeds or
payments, and (b) the Commitment Termination Date.
(ii) Any portion of the Revolving Loans
consisting of the principal amount of LIBOR Loans shall be paid by Borrower to
Agent, unless converted to a Chase Bank Rate Loan or continued as a LIBOR Loan
in accordance with the terms of this Agreement, upon the earlier of (a) the last
day of the Interest Period applicable thereto or (b) the Commitment Termination
Date. In no event shall Borrower be authorized to pay any LIBOR Loan prior to
the last day of the Interest Period applicable thereto unless (x) otherwise
agreed in writing by Agent or Borrower is otherwise expressly authorized or
required by any other provision of this Agreement to pay any LIBOR Loan
outstanding on a date other than the last day of the Interest Period applicable
thereto, and (y) Borrower pays to Agent concurrently with any prepayment of a
LIBOR Loan any amount due Agent under SECTION 4.9 hereof as a result of such
prepayment.
(iii) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if an Out-of-Formula Condition shall
exist, Borrower shall, ON DEMAND, repay the
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outstanding Revolving Loans that are Chase Bank Rate Loans in an amount
sufficient to reduce the aggregate unpaid principal amount of all Revolving
Loans by an amount equal to such excess; and, if such payment of Chase Bank Rate
Loans is not sufficient to cure the Out-of-Formula Condition, then Borrower
shall immediately either (a) deposit with Agent, for application to any
outstanding Revolving Loans bearing interest as LIBOR Loans as the same become
due and payable at the end of the applicable Interest Periods, cash in an amount
sufficient to cure such Out-of-Formula Condition to be held by Agent, but
subject to Agent's Lien thereon and rights of offset with respect thereto, or
(b) pay the Revolving Loans outstanding that bear interest as LIBOR Loans to the
extent necessary to cure such Out-of-Formula Condition and also pay to Agent any
and all amounts required by SECTION 4.9 hereof to be paid by reason of the
prepayment of a LIBOR Loan prior to the last day of the Interest Period
applicable thereto.
5.3.2. Payment of Interest. Interest accrued on the
Revolving Loans shall be due and payable on (i) the first calendar day of each
month (for the immediately preceding month), computed through the last calendar
day of the preceding month, with respect to any Revolving Loan (whether a Chase
Bank Rate Loan or LIBOR Loan), (ii) the last day of the applicable Interest
Period in the case of a LIBOR Loan, and (iii) on the Commitment Termination
Date. With respect to any Chase Bank Rate Loan converted into a LIBOR Loan
pursuant to SECTION 5.1.2 on a day when interest would not otherwise have been
payable with respect to such Chase Bank Rate Loan, accrued interest to the date
of such conversion on the amount of such Chase Bank Rate Loan so converted shall
be paid on the conversion date.
5.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations
requiring the payment of monies shall be payable by Borrower to Agent in Dollars
and without offset, defense or counterclaim, as and when provided in the Loan
Documents, or, if no date of payment is otherwise specified in the Loan
Documents, ON DEMAND.
5.5. APPLICATION OF PAYMENTS AND COLLECTIONS. All Payment Items
received by Agent in the Payment Account by 2:00 p.m., New York, New York time,
on any Business Day shall be deemed received and applied to the Loan Account on
that Business Day. All Payment Items received after 2:00 p.m., New York, New
York time, on any Business Day shall be deemed received on the following
Business Day. Borrower irrevocably waives the right to direct the application of
any and all payments and collections at any time or times hereafter received by
Agent from or on behalf of Borrower, and Borrower does hereby irrevocably agree
that Agent shall have the continuing exclusive right to apply and reapply any
and all such payments and collections received at any time or times hereafter by
Agent or its agent against the Obligations, in such manner as Agent may deem
advisable, notwithstanding any entry by Agent upon any of its books and records.
If as the result of collections as authorized by SECTION 8.2.6 hereof a credit
balance exists in the Loan Account, such credit balance shall not accrue
interest in favor of Borrower, but shall be available to Borrower at any time or
times for so long as no Default or Event of Default exists.
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5.6. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans shall
constitute one general Obligation of Borrower and (unless and to the extent
otherwise expressly provided in any of the Security Documents) shall be secured
by Agent's Lien upon all of the Collateral.
5.7. MARSHALLING; PAYMENTS SET ASIDE. Agent shall be under no
obligation to marshall any assets in favor of Borrower or against or in payment
of any or all of the Obligations. To the extent that Borrower makes a payment to
Agent or Agent receives payment from the proceeds of any Collateral or exercises
its right of setoff, and such payment or the proceeds of such enforcement or
setoff (or any part thereof) are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other Person, then to the extent of any such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred. The provisions of the immediately preceding sentence of this
SECTION 5.7 shall survive any termination of this Agreement and payment in full
of the Obligations.
5.8 AGENT'S ALLOCATION OF PAYMENTS AND COLLECTIONS.
5.8.1. Allocation of Payments. All monies to be applied to
the Obligations, whether such monies represent voluntary payments by one or more
Obligors or are received pursuant to demand for payment or realized from any
disposition of Collateral, shall be allocated among Agent and such of the
Lenders as are entitled thereto (and, with respect to monies allocated to
Lenders, on a Pro Rata basis unless otherwise provided herein): (i) first, to
Agent to pay principal and accrued interest on any portion of the Revolving
Loans which Agent may have advanced on behalf of any Lender and for which Agent
has not been reimbursed by such Lender or Borrower; (ii) second, to Agent to pay
the principal and accrued interest on any portion of the Settlement Loans
outstanding, to be shared with Lenders that have acquired a participating
interest in such Settlement Loans; (iii) third, to the extent that Agent has not
received from any Participating Lender a Participation Payment as required by
SECTION 3.3.2 hereof, to Agent to pay all amounts owing to Agent pursuant to
SECTION 3.3.2(II) hereof; (iv) fourth, to Agent to pay the amount of
Extraordinary Expenses and amounts owing to Agent pursuant to SECTION 14.10
hereof that have not been reimbursed to Agent by Borrower or Lenders, together
with interest accrued thereon at the rate applicable to Revolving Loans that are
Chase Bank Rate Loans; (v) fifth, to Agent to pay any Indemnified Amount that
has not been paid to Agent by Obligors or Lenders, together with interest
accrued thereon at the rate applicable to Revolving Loans that are Chase Bank
Rate Loans; (vi) sixth, to Agent to pay any fees due and payable to Agent; (vii)
seventh, to Lenders for any Indemnified Amount that they have paid to Agent and
any Extraordinary Expenses that they have reimbursed to Agent or themselves
incurred, to the extent that Lenders have not been reimbursed by Obligors
therefor; (viii) eighth, to Agent to pay principal and interest with respect to
LC Outstandings (or to the extent any of the LC Outstandings are contingent and
an Event of Default then exists, deposited in the Cash Collateral Account to
provide security for the payment of the LC Outstandings), which payment shall be
shared with the Participating Lenders in accordance with SECTION 3.3.2(III)
hereof; and (ix) ninth, to Lenders in payment of the unpaid principal and
accrued interest in respect of the
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Loans and any other Obligations then outstanding to be shared among Lenders on a
Pro Rata basis, or on such other basis as may be agreed upon in writing by
Lenders (which agreement or agreements may be entered into without notice to or
the consent or approval of Borrower). The allocations set forth in this SECTION
5.8 are solely to determine the rights and priorities of Agent and Lenders as
among themselves and may be changed by Agent and Lenders without notice to or
the consent or approval of Borrower or any other Person.
5.8.2. Erroneous Allocation. Agent shall not be liable for
any allocation or distribution of payments made by it in good faith and, if any
such allocation or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which such other Lenders are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).
5.9. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED.
5.9.1. Loan Accounts. Each Lender shall maintain in
accordance with its usual and customary practices an account or accounts (a
"Loan Account") evidencing the Debt of Borrower to such Lender resulting from
each Loan owing to such Lender from time to time, including the amount of
principal and interest payable to such Lender from time to time hereunder and
under each Note payable to such Lender. Any failure of a Lender to record in the
Loan Account, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrower hereunder (or under any Note) to pay any amount owing
hereunder to such Lender.
5.9.2. The Register. Agent shall maintain a register (the
"Register") which shall include a master account and a Subsidiary account for
each Lender and in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of each Loan
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Lender hereunder or under the Notes, and (iv) the amount of any sum received by
Agent from Borrower or any other Obligor and each Lender's share thereof. The
Register shall be available for inspection by Borrower or any Lender at the
offices of Agent at any reasonable time and from time to time upon reasonable
prior notice. Any failure of Agent to record in the Register, or any error in
doing so, shall not limit or otherwise affect the obligation of Borrower
hereunder (or under any Note) to pay any amount owing with respect to the Loans
or provide the basis for any claim against Agent.
5.9.3. Entries Binding. The entries made in the Register and
each Loan Account shall constitute rebuttably presumptive evidence of the
information contained therein; provided, however, that if a copy of information
contained in the Register or any Loan Account is provided to any Person, or any
Person inspects the Register or any Loan Account, at any time or from time to
time, then the information contained in the Register or the Loan Account, as
applicable shall be
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conclusive and binding on such Person for all purposes absent manifest error,
unless such Person notifies Agent in writing within 30 days after such Person's
receipt of such copy or such Person's inspection of the Register or Loan Account
of its intention to dispute the information contained therein.
5.10. GROSS UP FOR TAXES. If Borrower shall be required by
Applicable Law to withhold or deduct any Taxes from or in respect of any sum
payable under this Agreement or any of the other Loan Documents, (a) the sum
payable to Agent or such Lender shall be increased as may be necessary so that,
after making all required withholding or deductions, Agent or such Lender (as
the case may be) receives an amount equal to the sum it would have received had
no such withholding or deductions been made, (b) Borrower shall make such
withholding or deductions, and (c) Borrower shall pay the full amount withheld
or deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
5.11. WITHHOLDING TAX EXEMPTION. At least 5 Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States or any state thereof agrees that it will deliver to Borrower and Agent 2
duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Lender is entitled to receive payment
under this Agreement and its Note without deduction or withholding of any United
States federal income taxes. Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to Borrower and Agent 2 additional copies of such
form (or a successor form) on or before the date that such form expires
(currently, 3 successive calendar years for Form 1001 and one calendar year for
Form 4224) or becomes obsolete or after the occurrence of any event requiring a
change in the most form so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by Borrower or
Agent, in each case, certifying that such Lender is entitled to receive payments
under this Agreement and its Notes without deduction or withholding of any
United States federal income taxes, unless an event (including any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required that renders all such forms inapplicable or
that would prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender advises Borrower and Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income taxes.
SECTION 6. TERM AND TERMINATION OF COMMITMENTS
6.1. ORIGINAL TERM OF COMMITMENTS. Subject to each Lender's right
to cease making Loans and other extensions of credit to Borrower when any
Default or Event of Default exists or upon termination of the Commitments as
provided in SECTION 6.2 hereof, the Commitments shall be in effect for a period
of 2 years from the date hereof, through the close of business on August 23,
2003 (the "Original Term"), and shall automatically renew for one-year periods
thereafter (each a "Renewal Term"), unless terminated as provided in SECTION 6.2
hereof.
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6.2. TERMINATION.
6.2.1. Termination by Agent. Agent may (and upon the
direction of the Required Lenders, shall) terminate the Commitments upon at
least 90 days prior written notice to Borrower as of the last day of the
Original Term or any applicable Renewal Term and without notice upon or after
the occurrence of an Event of Default; provided, however, that the Commitments
shall automatically terminate as provided in SECTION 11.2 hereof.
6.2.2. Termination by Borrower. Upon at least 90 days prior
written notice to Agent, Borrower may, at its option, terminate the Commitments;
provided, however, no such termination by Borrower shall be effective until
Borrower has satisfied all of the Obligations and executed in favor of and
delivered to Agent and Lenders a general release of all claims that Borrower may
have against Agent or any Lender. Any notice of termination given by Borrower
shall be irrevocable unless Agent otherwise agrees in writing. Borrower may
elect to terminate the Commitments in their entirety only. No section of this
Agreement, Type of Loan available hereunder or Commitment may be terminated by
Borrower singly.
6.2.3. Termination Charges. On the effective date of
termination of the Commitments pursuant to SECTION 6.2.2, Borrower shall pay to
Agent, for the Pro Rata benefit of Lenders (in addition to the then outstanding
principal, accrued interest, fees and other charges owing under the terms of
this Agreement and any of the other Loan Documents), as liquidated damages for
the loss of the bargain and not as a penalty, an amount equal to 3% of the
Commitments if termination occurs during the first Loan Year; 2% of the
Commitments if termination occurs during the second Loan Year; and 1% of the
Commitments if the effective date of termination occurs thereafter at any time
other than on an Anniversary Date. In no event shall any termination charge be
payable if the effective date of termination occurs on the last day of the
Original Term or in any Renewal Term.
6.2.4. Effect of Termination. On the effective date of
termination of the Commitments by Agent or by Borrower, all of the Obligations
shall be immediately due and payable and Lenders shall have no obligation to
make any Loans and CIT shall have no obligation to procure any Letters of
Credit. All undertakings, agreements, covenants, warranties and representations
of Borrower contained in the Loan Documents shall survive any such termination
and Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such termination until
Borrower has satisfied the Obligations to Agent and Lenders, in full. For
purposes of this Agreement, the Obligations shall not be deemed to have been
satisfied until all Obligations for the payment of money have been paid to Agent
in same day funds and all Obligations that are at the time in question
contingent (including, all LC Outstandings that exist by virtue of an
outstanding Letter of Credit) have been fully cash collateralized in favor and
to the satisfaction of Agent or Agent has received as beneficiary a direct pay
letter of credit in form and from an issuing bank acceptable to Agent and
providing for direct payment to Agent of all such contingent Obligations at the
time they become fixed (including reimbursement of all sums paid by CIT under
any LC Support). Notwithstanding the payment in full of the Obligations, Agent
shall not be required to terminate its security interests in any of the
Collateral unless, with respect to any loss or damage Agent may incur
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as a result of the dishonor or return of any Payment Items applied to the
Obligations, Agent shall have received either (i) a written agreement, executed
by Borrower and any Person whose loans or other advances to Borrower are used in
whole or in part to satisfy the Obligations, indemnifying Agent and Lenders from
any such loss or damage; or (ii) such monetary reserves and Liens on the
Collateral for such period of time as Agent, in its reasonable discretion, may
deem necessary to protect Agent from any such loss or damage. All obligations of
Borrower to indemnify Agent or any Lender pursuant to this Agreement or any of
the other Loan Documents, shall in all events survive any termination of the
Commitments.
SECTION 7. COLLATERAL SECURITY
7.1. GRANT OF SECURITY INTEREST IN COLLATERAL. To secure the prompt
payment and performance of all of the Obligations, Borrower hereby grants to
Agent, for the benefit of itself as Agent and for the Pro Rata benefit of
Lenders, a continuing security interest in and Lien upon all of the following
Property and interests in Property of Borrower, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located:
(a) All Accounts Collateral;
(b) All Goods, including all Inventory and Equipment;
(c) All Instruments;
(d) All Chattel Paper;
(e) All Documents;
(f) All Deposit Accounts;
(g) All General Intangibles;
(h) All Letter-of-Credit Rights;
(i) All Investment Property (but excluding any portion thereof
that constitutes Margin Stock);
(j) All Farm Products;
(k) All cattle, whether constituting Farm Products or Inventory,
held by a Borrower for fattening, feeding, finishing, grazing or
resale, including conceived but unborn animals and all such
after-acquired cattle, whether by purchase, birth or otherwise, and all
feed, feed grain and feed commodities, whether constituting Farm
Products or Inventory;
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(l) All Supporting Obligations;
(m) All monies now or at any time or times hereafter in the
possession or under the control of Agent or a bailee or Affiliate of
Agent;
(n) All accessions to, substitutions for and all replacements,
products and cash and non-cash proceeds of (a) through (m) above,
including proceeds of and unearned premiums with respect to insurance
policies insuring any of the Collateral; and
(o) All books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs, and other
computer materials and records) of Borrower pertaining to any of (a)
through (n) above.
7.2. LIEN ON DEPOSIT ACCOUNTS. As additional security for the
payment and performance of the Obligations, Borrower hereby grants to Agent, for
the benefit of itself as Agent and for the Pro Rata benefit of Lenders, a
continuing security interest in and Lien upon, and hereby collaterally assigns
to Agent, all of Borrower's right, title and interest in and to each Deposit
Account of Borrower and in and to any deposits or other sums at any time
credited to each such Deposit Account, including any sums in any blocked account
or any special lockbox account and in the accounts in which sums are deposited.
In connection with the foregoing, Borrower hereby authorizes and directs each
such bank or other depository to pay or deliver to Agent upon its written demand
therefor made at any time upon the occurrence and during the continuation of an
Event of Default and without further notice to Borrower (such notice being
hereby expressly waived), all balances in each Deposit Account maintained by
Borrower with such depository for application to the Obligations then
outstanding, and the rights given Agent in this Section shall be cumulative with
and in addition to Agent's other rights and remedies in regard to the foregoing
Property as proceeds of Collateral. Borrower hereby irrevocably appoints Agent
as Borrower's attorney-in-fact to collect any and all such balances to the
extent any such payment is not made to Agent by such bank or other depository
after demand thereon is made by Agent pursuant hereto.
7.3 LIEN ON REAL ESTATE. The due and punctual payment and
performance of the Obligations shall also be secured by the Lien created by the
Mortgages upon all Real Estate of Borrower described therein. The Mortgages
shall be executed by Borrower in favor of Agent on or about the Closing Date and
shall be duly recorded, at Borrower's expense, in each office where such
recording is required to constitute a fully perfected Lien upon the Real Estate
covered thereby.
7.4. COMMERCIAL TORT CLAIMS. Borrower shall promptly notify Agent
in writing upon Borrower incurring or otherwise obtaining a Commercial Tort
Claim after the Closing Date against any third party and, upon request of Agent,
promptly enter into an amendment to this Agreement and do such other acts or
things deemed appropriate by Agent to give Agent a security interest in any such
Commercial Tort Claim.
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7.5. OTHER COLLATERAL. In addition to the items of Property
referred to in SECTION 7.1 above, the Obligations shall also be secured by the
Cash Collateral to the extent provided herein and all of the other items of
Property from time to time described in any of the Security Documents as
security for any of the Obligations.
7.6. LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Agent's
request therefor, Borrower shall execute or cause to be executed and deliver to
Agent such instruments, assignments, title certificates or other documents as
are necessary under the UCC or other Applicable Law (including any motor vehicle
certificates of title act) to perfect (or continue the perfection of) Agent's
Lien upon the Collateral, and shall take such other action as may be requested
by Agent to give effect to or carry out the intent and purposes of this
Agreement. Unless prohibited by Applicable Law, Borrower hereby authorizes Agent
to execute and file any such financing statement on Borrower's behalf. Unless
prohibited by Applicable Law, Borrower hereby irrevocably authorizes Agent to
execute and file any such financing statements, including financing statements
that indicate the Collateral (i) as all assets or all personal property of such
Borrower or words of similar effect, or (ii) as being of an equal or lesser
scope, or with greater or lesser detail, than as set forth in this Section 7, on
Borrower's behalf. Borrower also hereby ratifies its authorization for Agent to
have filed in any jurisdiction any like financing statements or amendments
thereto if filed prior to the date hereof. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement and may be filed in any appropriate office in lieu thereof.
SECTION 8. COLLATERAL ADMINISTRATION
8.1. GENERAL.
8.1.1. Location of Collateral. All tangible items of
Collateral, other than Inventory in transit, Inventory held in other locations
in the ordinary course of business not longer than 14 days, and motor vehicles,
shall at all times be kept by Borrower and its Subsidiaries at one or more of
the business locations set forth in SCHEDULE 8.1.1 hereto and shall not be moved
therefrom, without the prior written consent of Agent.
8.1.2. Insurance of Collateral; Insurance and Condemnation
Proceeds.
(i) Borrower shall maintain and pay for
insurance upon all Collateral, wherever located, covering casualty,
hazard, public liability, theft, malicious mischief, and such other
risks in such amounts and with such insurance companies as are
reasonably satisfactory to Agent All proceeds payable under each such
policy shall be payable to Agent Borrower shall deliver the originals
or certified copies of such policies to Agent with satisfactory Agent's
loss payable endorsements reasonably satisfactory to Agent, naming
Agent as sole loss payee, assignee or additional insured, as
appropriate. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for
any reason whatsoever and a clause specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of
Borrower or the
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owner of the Property or by the occupation of the premises for purposes
more hazardous than are permitted by said policy. If Borrower fails to
provide and pay for such insurance, Agent may, at its option, but shall
not be required to, procure the same and charge Borrower therefor.
Borrower agrees to deliver to Agent, promptly as rendered, true copies
of all reports made in any reporting forms to insurance companies. For
so long as no Event of Default exists, Borrower shall have the right to
settle, adjust and compromise any claim with respect to any insurance
maintained by Borrower provided that all proceeds thereof are applied
in the manner specified in this Agreement, and Agent agrees promptly to
provide any necessary endorsement to any checks or drafts issued in
payment of any such claim. At any time that an Event of Default exists,
only Agent shall be authorized to settle, adjust and compromise such
claims. Agent shall have all rights and remedies with respect to such
policies of insurance as are provided for in this Agreement and the
other Loan Documents.
(ii) Any proceeds of insurance referred to in
this SECTION 8.1.2 and any condemnation awards that are paid to Agent
in connection with a condemnation of any of the Collateral shall be
paid to Agent to the payment of the Revolving Loans and then to any
other Obligations outstanding, provided that if requested by Borrower
in writing within 5 days after Agent's receipt of such proceeds and if
no Default or Event of Default exists, Borrower may apply such proceeds
to repair or replace the damaged or destroyed Equipment so long as (1)
such repair or replacement is promptly undertaken and concluded, (2)
the repaired or replaced Property is at all times free and clear of
Liens other than Permitted Liens that are not Purchase Money Liens, (3)
Borrower complies with such disbursement procedures for such proceeds
as Agent may reasonably impose for repair or replacement, and (4) the
amount of proceeds from any single casualty affecting Equipment does
not exceed 50% of the book value of the Equipment not to exceed
$50,000.
8.1.3. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping the
Collateral, all Taxes imposed by any Applicable Law on any of the Collateral or
in respect of the sale thereof, and all other payments required to be made by
Agent to any Person to realize upon any Collateral shall be borne and paid by
Borrower. If Borrower fails to promptly pay any portion thereof when due, Agent
may, at its option, but shall not be required to, pay the same and charge
Borrower therefor. Agent shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Agent's
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Borrower's sole risk.
8.1.4. Defense of Title to Collateral. Borrower shall at all
times defend Borrower's title to the Collateral and Agent's Liens therein
against all Persons and all claims and demands whatsoever.
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8.2. ADMINISTRATION OF ACCOUNTS.
8.2.1. Records, Schedules and Assignments of Accounts.
Borrower shall submit to Agent an accurate and complete Borrowing Base
Certificate on or before 11:00 a.m. each Business Day after the Closing Date
current through the close of the immediately preceding Business Day, with
detailed back-up as Agent may request from time to time. Borrower shall keep
accurate and complete records of its Accounts and all payments and collections
thereon and shall submit to Agent on such periodic basis as Agent shall request
a sales and collections report for the preceding period, in form satisfactory to
Agent. On or before the 10th day of each month from and after the date hereof,
Borrower shall deliver to Agent, in form acceptable to Agent, a detailed aged
trial balance of all Accounts existing as of the last day of the preceding
month, specifying the names, addresses, face value, dates of invoices and due
dates for each Account Debtor obligated on an Account so listed ("Schedule of
Accounts"), and, upon Agent's request therefor, copies of proof of delivery or
rendition of services and the original copy of all documents, including
repayment histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status of then
existing Accounts as Agent shall reasonably request. At Agent's request,
Borrower shall deliver to Agent copies of invoices or invoice registers related
to all of its Accounts.
8.2.2. Discounts, Allowances, Disputes. If Borrower grants
any discounts, allowances or credits that are not shown on the face of the
invoice for the Account involved, Borrower shall report such discounts,
allowances or credits, as the case may be, to Agent as part of the next required
Schedule of Accounts. If any amounts due and owing in excess of $25,000 are in
dispute between Borrower and any Account Debtor, Borrower shall provide Agent
with written notice thereof at the time of submission of the next Schedule of
Accounts, explaining in detail the reason for the dispute, all claims related
thereto and the amount in controversy. Upon and after the occurrence of an Event
of Default, Agent shall have the right to settle or adjust all disputes and
claims directly with the Account Debtor and to compromise the amount or extend
the time for payment of the Accounts upon such terms and conditions as Agent may
deem advisable, and to charge the deficiencies, costs and expenses thereof,
including attorneys' fees, to Borrower.
8.2.3. Taxes. If an Account includes a charge for any Tax
payable to any governmental taxing authority, Agent is authorized, in its sole
discretion, to pay the amount thereof to the proper taxing authority for the
account of Borrower and to charge Borrower therefor; provided, however, that
Agent shall not be liable for any Taxes that may be due by Borrower.
8.2.4. Account Verification. Whether or not a Default or an
Event of Default exists, any of Agent's officers, employees or agents shall have
the right, at any time or times hereafter, in the name of Agent, any designee of
Agent or Borrower, to verify the validity, amount or any other matter relating
to any Account by mail, telephone, telegraph or otherwise in accordance with
Applicable Law. Borrower shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.
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8.2.5. Maintenance of Dominion Account. Borrower shall
maintain a Dominion Account pursuant to a lockbox or other arrangement
acceptable to Agent and, in the case of such Dominion Account and lockbox
arrangement, with such banks as may be selected by Borrower and be acceptable to
Agent Borrower shall issue to each such bank an irrevocable letter of
instruction directing such banks to deposit all payments or other remittances
received in the lockbox to the Dominion Account for application on account of
the Obligations. All funds deposited in the Dominion Account shall immediately
become the property of Agent and Borrower shall obtain the agreement by such
banks in favor of Agent to waive any offset rights against the funds so
deposited. Agent assumes no responsibility for such lockbox arrangement,
including any claim of accord and satisfaction or release with respect to
deposits accepted by any bank thereunder.
8.2.6. Collection of Accounts; Proceeds of Collateral. To
expedite collection, Borrower shall endeavor in the first instance to make
collection of its Accounts for Agent. All payment items received by Borrower in
respect of Accounts, together with the proceeds of any other Collateral, shall
be held as Agent's property by Borrower as trustee of an express trust for
Agent's benefit and Borrower shall immediately deposit same in kind in the
Dominion Account. Agent retains the right at all times after the occurrence of a
Default or an Event of Default to notify Account Debtors that Accounts have been
assigned to Agent and to collect Accounts directly in its own name and to charge
to Borrower the collection costs and expenses, including attorneys' fees.
8.3. PAYMENT OF CHARGES. All amounts chargeable to Borrower under
this SECTION 8 shall be Obligations secured by all of the Collateral and shall
be payable on demand.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Agent to
enter into this Agreement and to make advances hereunder, Borrower warrants and
represents to Agent and covenants with Agent that:
9.1.1. Incorporation and Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. Borrower is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
each state or jurisdiction listed on SCHEDULE 9.1.1 hereto and in all other
states and jurisdictions where the character of its Properties or the nature of
its activities make such qualification necessary.
9.1.2. Corporate Power and Enforceability. Borrower is duly
authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party. This
Agreement is, and each of the other Loan Documents when delivered under this
Agreement will be, a legal, valid and binding obligation of Borrower enforceable
against it in accordance with their respective terms.
9.1.3. Corporate Names. Borrower has not been known as or
used any corporate, fictitious or trade names except those listed on SCHEDULE
9.1.3 hereto.
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9.1.4. Business Locations. Borrower's chief executive office
and other places of business are as listed on SCHEDULE 8.1.1 hereto. During the
preceding five-year period, neither Borrower nor any of its Subsidiaries has had
an office, place of business or agent for service of process other than as
listed on SCHEDULE 8.1.1. Except as shown on SCHEDULE 8.1.1, no Inventory is
stored with a bailee, warehouseman or similar Person, nor is any Inventory
consigned to any Person.
9.1.5. Title to Properties; Priority of Liens. Borrower has
good, indefeasible and marketable title to and fee simple ownership of, or valid
and subsisting leasehold interests in, all of its real property, and good title
to all of the Collateral and all of its other property, in each case free and
clear of all Liens except Permitted Liens.
9.1.6. Status of Accounts; Etc. Each Account included by
Borrower as an Eligible Account in any Borrowing Base Certificate delivered to
Agent satisfies in all respects the enumerated requirements set forth in the
definition of such terms, except as otherwise disclosed in such Borrowing Base
Certificate or as disclosed in a timely manner in a subsequent Borrowing Base
Certificate or as otherwise promptly disclosed in writing to Agent.
9.1.7. Solvent Financial Condition. Borrower is now and,
after giving effect to the Loans to be made and each LC Guaranty issued in for
of Bank pursuant to this Agreement, and at all times will be, Solvent.
9.1.8. Surety Obligations. Neither Borrower nor any of its
Subsidiaries is obligated as surety or indemnitor under any surety or similar
bond or other contract issued or entered into any agreement to assure payment,
performance or completion of performance of any undertaking or obligation of any
Person.
9.1.9. Taxes. Borrower's federal tax identification number
is 65-0534535. Borrower has filed all federal, state and local tax returns,
information returns and other reports it is required by law to file and has
paid, or made provision for the payment of, all Taxes upon it, its income and
properties as and when such Taxes are due and payable, except to the extent
being Properly Contested.
9.1.10. Brokers. There are no claims for brokerage
commissions, finder's fees or investment banking fees in connection with the
transactions contemplated by this Agreement which are chargeable to Agent or a
Lender.
9.1.11. Patents, Trademarks, Copyrights and Licenses. All the
patents, trademarks, service marks, tradenames, copyrights, licenses and other
similar rights owned by Borrower are listed on SCHEDULE 9.1.11 hereto.
9.1.12. Compliance with Laws. Borrower has duly complied
with, and its properties, business operations and leaseholds are in compliance
in all material respects with, the provisions of
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all Applicable Law (except to the extent that any such noncompliance with
Applicable Law would not reasonably be expected to have a Material Adverse
Effect) and there have been no citations, notices or orders of noncompliance
issued to Borrower under any such law, rule or regulation.
9.1.13. Litigation. Except as set forth on SCHEDULE 9.1.13
hereto, there are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrower, threatened, against or affecting Borrower, or the
business, operations, properties, prospects, profits or condition of Borrower,
none of which if resolved adversely to Borrower would have Material Adverse
Effect. Borrower is not in default with respect to any order, writ, injunction,
judgment, decree or rule of any court, governmental authority or arbitration
board or tribunal.
9.1.14. No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. Borrower is not in default, and no event has occurred and no condition
exists which constitutes, or which with the passage of time or the giving of
notice or both would constitute, a default in the payment of any debt to any
Person for Money Borrowed.
9.1.15. PASA and PASA Trust Fund Agreements. Without limiting
the provisions of Section 9.1.12 above, Borrower's business operations comply
with PASA is all respects. The PASA Trust Fund Agreements are in place and the
cash collateral supporting the PASA Trust Fund Agreements is in an amount and
maintained in a manner consistent with the applicable requirements under PASA
and the regulations and rules promulgated thereunder.
9.2. AFFIRMATIVE COVENANTS. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Agent, Borrower covenants
that, unless otherwise consented to by Agent in writing, it shall:
9.2.1. Visits and Inspections. Permit representatives of
Agent, from time to time, as often as may be reasonably requested, but only
during normal business hours, to visit and inspect the Collateral, inspect,
audit and make extracts from Borrower's books and records, and discuss with
Borrower's officers, its employees and its independent accountant, Borrower's
business, assets, liabilities, financial condition, business prospects and
results of operations.
9.2.2. Notices. Notify Agent in writing promptly after
Borrower's obtaining knowledge thereof (i) of the occurrence of any event or the
existence of any fact which renders any representation or warranty in this
Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect; (ii) of the commencement of any litigation
affecting Borrower or any of its properties, whether or not the claim is
considered by Borrower to be covered by insurance, and of the institution of any
administrative proceeding which if determined adversely to Borrower would have a
Material Adverse Effect; (iii) at least 60 days prior thereto, of Borrower's
opening of any new office or place of business or Borrower's closing of any
existing office or place of business; (iv) of any labor dispute to which
Borrower may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor
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contract to which it is a party or by which it is bound; (v) of any material
default by Borrower under any note, indenture, loan agreement, mortgage, lease,
deed, guaranty or other similar agreement relating to any debt of Borrower
exceeding $250,000; (vi) of any notice of non-compliance or revocation or denial
of any registration under PASA or the payment of any amount under a PASA Trust
Fund Agreement; (vii) any notice from a secured creditor of a vendor of the
existence of a Lien in Farm Products or any notification of such Liens in Farm
Products of a vendor filed with a central filing registry as provided under the
Food Security Act; or (viii) of the existence of any Default or Event of
Default. Borrower also agrees to advise Agent promptly in writing of any notices
Borrower receives from any local, state or federal authority advising Borrower
of any material environmental liability (actual or potential) stemming from
Borrower's operations, its premises, its waste disposal practices, or waste
disposal sites used by Borrower and to provide Agent with copies of all such
notices. Upon receipt by Borrower of any such notice Agent shall be entitled to
establish an additional Availability Reserve in such amount as Agent may deem
reasonably appropriate.
9.2.3. PASA Audits. Provide to Agent, promptly upon
Borrower's receipt thereof, true, accurate and complete copies of all review and
audit requests by any governmental entity under PASA or in respect of the PASA
Trust Fund Agreements and any directives, conclusions, recommendations or other
written results thereof.
9.2.4. Taxes. Pay and discharge all Taxes prior to the date
on which such Taxes become delinquent or penalties attach thereto, except and to
the extent only that such Taxes are being Properly Contested.
9.2.5. Compliance with Laws. Comply with all Applicable Law,
including PASA, all laws, statutes, regulations and ordinances regarding the
collection, payment and deposit of Taxes, and all ERISA and environmental laws,
and obtain and keep in force any and all governmental approvals necessary to the
ownership of its properties or to the conduct of its business (including those
required under PASA), which violation or failure to obtain might have a Material
Adverse Effect.
9.2.6. Food Security Act Compliance. In the event that
Borrower purchases any "farm products" (as defined in 9 C.F.R. ss. 205.206) from
a Person who produces such farm products in a state with a central filing
system, register, as a buyer, with the Secretary of State of such state (or the
designated system operator) and otherwise comply with the requirements of such
system. Borrower shall forward promptly to Lender a copy of such registration as
well as a copy of the portion of the master list periodically distributed by the
Secretary of State (or the designated system operator). Borrower shall comply
with any payment of obligations in connection with the purchase of any farm
products imposed by a secured party as a condition to the waiver or release of a
security interest effective under the Food Security Act or other Applicable Law,
whether or not as a result of direct notice or the filing under a central filing
system, and Borrower shall provide to Agent immediately upon request all
material information relating to the Liened Inventory and Liened Payables
resulting from any such transaction. Borrower shall also promptly notify Agent,
in writing, of the receipt of any direct notice pursuant to the Food Security
Act or other Applicable Law and provide Agent with a copy of such notice.
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For purposes of the foregoing, the term "Liened Payables" means, at the time of
determination, the sum of (a) the unpaid purchase price of Liened Inventory and
(b) all amounts previously paid by Borrower for the purchase of Liened Inventory
that were not paid in the manner required by Applicable Law to discharge the
Liens thereon; and the term "Liened Inventory" means Inventory that is subject
to Liens that are either in favor of the seller by operation of Applicable Law
or have been created by the seller in favor of a third Person and have been
perfected as to Borrower under Applicable Law, including the Food Security Act,
provided, that, in the case of each such Lien, Borrower shall have notified
Agent in accordance with the provisions of this Agreement of the existence of
such Lien and the amount of any Liened Payables relating thereto and shall have
classified and reported such Inventory as Liened Inventory in all relevant
reports, certificates, schedules and communications hereunder.
9.2.7. Title Insurance Policies. No later than 45 days after
the Closing Date, deliver to Agent fully paid mortgagee title insurance policies
(or binding commitments to issue title insurance policies, marked to Agent's
satisfaction to evidence the form of such policies to be delivered after the
Closing Date), in standard ALTA form, issued by a title insurance company
satisfactory to Agent, each in an amount equal to not less than the fair market
value of the real Property or leasehold interest, as the case may be, subject to
the Mortgage, insuring the Mortgage to create a valid Lien on all real Property
and valid Liens on the leasehold interest described therein with no exceptions
which Agent shall not have approved in writing and such survey exceptions as
Agent may accept.
9.2.8. Survey. No later than 45 days after the Closing Date,
deliver to Agent an as-built survey with respect to each parcel of real Property
comprising a part of the Collateral, which survey shall indicate the following:
(i) an accurate metes and bounds or lot, block and parcel description of such
Property; (ii) the correct location of all buildings, structures and other
improvements on such Property, including all streets, easements, rights of way
and utility lines; (iii) the location of ingress and egress from such Property,
and the location of any set-back or other building lines affecting such
Property; and (iv) a certification by a registered land surveyor in form and
substance acceptable to Agent, certifying to the accuracy and completeness of
such survey and to such other matters relating to such real Property and survey
as Agent shall require.
9.2.9. Maintenance of Letters of Credit. Cause to be
maintained in force all Participant Letters of Credit at all times until the
sooner of (i) the termination of the Participation Agreement, or (ii) Agent's
receipt of the payment of the full face amount under each Participant Letter of
Credit.
9.3. DELIVERY OF FINANCIAL STATEMENTS; ETC..
9.3.1. Financial Statements. Until termination of this
Agreement and payment and satisfaction of all Obligations due hereunder,
Borrower shall deliver to Agent: (a) within 90 days after the end of each fiscal
year of Borrower, a Consolidated Balance Sheet and statements of profit and
loss, cash flow and reconciliation of surplus of Borrower and all consolidated
subsidiaries as at the close of such year, audited by independent public
accountants selected by Borrower and
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satisfactory to Agent; (b) within 45 days after the end of each fiscal quarter a
Consolidated Balance Sheet as at the end of such period and statements of profit
and loss, cash flow and surplus of Borrower and its subsidiaries for such
period, certified by an authorized financial or accounting officer of Borrower;
(c) within 30 days after the end of each month (i) a Consolidated Balance Sheet
as at the end of such month and statements of profit and loss, cash flow and
surplus of Borrower and all subsidiaries for such month, certified by an
authorized financial or accounting officer of Borrower, (ii) an accounts payable
aging, specifying the names, amounts owed and due dates for each account payable
of Borrower so listed; and (iii) a reconciliation from the Borrowing Base
Certificates issued to Agent during such month with the interim financial
statement issued with respect to such month; (d) promptly after the sending or
filing thereof, as the case may be, copies of any proxy statements, financial
statements or reports which Borrower has made generally available to its
shareholders and copies of any regular, periodic and special reports or
registration statements which Borrower files with the SEC or any other
governmental authority which may be substituted therefor, or any national
securities exchange and (e) from time to time, such further information
regarding the business affairs and financial condition of Borrower as Agent may
reasonably request, including without limitation annual cash flow projections
and related items in form satisfactory to Agent.
9.3.2. Compliance Certificate. Concurrently with the
delivery of financial statements pursuant to SECTION 9.3.1 above, Borrower shall
deliver to Agent a completed Compliance Certificate, in substantially the form
of EXHIBIT D attached hereto, signed by an Executive Officer.
9.4. NEGATIVE COVENANTS. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Agent, Borrower covenants
that, unless Agent has first consented thereto in writing, it shall not:
9.4.1. Fundamental Changes. Enter into any transaction to
merge, reorganize, consolidate or amalgamate with any Person, or liquidate, wind
up or dissolve itself.
9.4.2. Loans. Make any loans or other advances of money to
any Person other than to an officer or employee of Borrower for salary, travel
advances, advances against commissions and other similar advances in the
ordinary course of business.
9.4.3. Indebtedness. Create, incur, assume, or suffer to
exist any Indebtedness except Permitted Indebtedness.
9.4.4. Affiliate Transactions. Enter into, or be a party to
any transaction with any Affiliate or stockholder, except (i) the transactions
contemplated by the Loan Documents; (ii) payment of customary directors' fees
and indemnities; (iii) transactions with Affiliates that were consummated prior
to the date hereof and have been disclosed to Agent prior to the Closing Date;
and (iv) in the ordinary course of and pursuant to the reasonable requirements
of Borrower's business and upon fair and reasonable terms which are fully
disclosed to Agent, consistent with past practices and are no
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less favorable to Borrower than would obtain in a comparable arm's length
transaction with a Person not an Affiliate or stockholder of Borrower.
9.4.5. Limitation on Liens. Create or suffer to exist any
Lien upon any of its property, income or profits, whether now owned or hereafter
acquired, except for Permitted Liens.
9.4.6. Distributions. Declare or make any Distributions.
9.4.7. Disposition of Assets. Sell, lease or otherwise
dispose of any of its properties, including any disposition of property as part
of a sale and leaseback transaction, except (i) sales of Inventory in the
ordinary course of business for so long as no Event of Default exists hereunder,
(ii) within 90 days from the Closing Date, the disposition of the fixed assets
that are indicated as having been written off on Borrower's June 30, 2001
balance sheet and disclosed in reasonable detail to Agent having an aggregate
fair value not to exceed $750,000, (iii) the disposition of other fixed assets
during any fiscal year commencing January 1, 2002, not to exceed $50,000 in fair
value, and (iv) other dispositions expressly authorized by other provisions of
the Loan Documents.
9.4.8. Bill-and-Hold Sales, Etc. Make a sale to any customer
on a bill-and-hold, guaranteed sale, sale and return, sale on approval or
consignment basis, or any sale on a repurchase or return basis.
9.4.9. Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person.
9.4.10. Fiscal Year. Establish a fiscal year different from
the fiscal year utilized as of the date of this Agreement.
9.4.11. Capital Leases and Capital Expenditures. Contract
for, purchase, make expenditures for, or otherwise (i) incur Capital
Expenditures (other than under Capital Leases) in excess of (A) $1,500,000 from
the Closing Date through December 31, 2001, (B) $1,750,000 during Borrower's
fiscal year ending December 31, 2002, or (C) $1,000,000 during any fiscal year
thereafter or (ii) incur obligations under Capital Leases requiring payments in
any fiscal year exceeding $250,000 in the aggregate.
9.4.12. Conduct of Business. Engage in any business other
than the business engaged in by it on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
9.4.13. New Locations. Open any additional business locations
without the prior written consent of Agent.
9.4.14. Restricted Investments. Make any Restricted
Investment.
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9.4.15. PASA Trust Fund Agreements. Fail to keep in force the
PASA Trust Fund Agreements in an amount required under PASA and maintain cash
collateral supporting the PASA Trust Fund Agreements is in an amount and in a
manner consistent with the applicable requirements under PASA and the
regulations and rules promulgated thereunder.
9.4.16. Restrictions on Purchasing Farm Products from Certain
Persons. Purchase any "farm products" (as defined in 9 C.F.R. ss. 205.206) from
any Person (i) who produces such farm products in a state having a central
filing system certified by the United States Department of Agriculture under the
Food Security Act or (ii) with respect to whom Borrower has received a direct
notice from a seller or secured party under the Food Security Act of 1985 or
other Applicable Law, unless Borrower shall have complied in all respects with
the provisions of the Food Security Act and this Agreement.
9.4.17. Restrictions on Forward Sales Contracts. Enter into
or have outstanding at any time forward sales contracts in an aggregate amount
at any time exceeding $350,000 for the sale of cattle which are not matched by
buyers contractually bound to purchase such cattle.
SECTION 10. FINANCIAL COVENANTS.
During the term of this Agreement, and thereafter for so long as there are
any Obligations outstanding, Borrower covenants that it shall:
10.1. Working Capital. Not permit Borrower's Working to be less than
$12,000,000 at any time.
10.2. EBITDA. Achieve EBITDA during each fiscal quarter hereafter of
not less than (i) ($1,500,000) for the fiscal quarter ending September 30, 2001;
(ii) ($1,000,000) for the fiscal quarter ending December 31, 2001; (iii)
($500,000) for the fiscal quarter ending March 31, 2002; (iv) ($250,000) for the
fiscal quarter ending June 30, 2002; and, for each fiscal quarter thereafter (v)
$250,000 for each second, third and fourth fiscal quarter and (vi) ($250,000)
for each first fiscal quarter. For purposes hereof, a parenthetical shall be
deemed to indicate a negative number.
10.3. Minimum Excess Availability. Maintain an Excess Availability
of not less than $5,000,000 at all times after the Closing Date.
SECTION 11. EVENTS OF DEFAULT; REMEDIES
11.1. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events or conditions shall constitute an "Event of Default" under this
Agreement:
11.1.1. The failure of Borrower to pay any of the Obligations
on or within five (5) days of the due date thereof, provided that nothing
contained herein shall prohibit Agent from charging such amounts to Borrower's
Loan Account on the due date thereof;
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11.1.2. Any representation, warranty or other statement made
or furnished to Agent by or on behalf of Borrower in this Agreement, any of the
other Loan Documents or any instrument, certificate or financial statement
furnished in compliance with or in reference thereto proves to have been false
or misleading in any material respect when made or furnished or when reaffirmed
pursuant to this Agreement.
11.1.3. The commencement by or against Borrower of any
Insolvency Proceeding;
11.1.4. Borrower shall fail or neglect to perform, keep or
observe any covenant contained in Sections 7.2, 8.1, 8.2, 9.2.1, 9.3, 9.4 or 10
of this Agreement or Borrower shall fail or neglect to perform, keep or observe
any other covenant contained in this Agreement (other than a covenant a default
in the performance or observance of which is dealt with specifically elsewhere
in this SECTION 11.1) and the breach of such other covenant is not cured to
Agent's reasonable satisfaction within 15 days after the sooner to occur of
Borrower's receipt of notice of such breach from Agent or the date on which such
failure or neglect first becomes known to any Executive Officer of Borrower,
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 15-day period or which is a willful
and knowing breach by Borrower.
11.1.5. Borrower shall (i) engage in any "prohibited
transaction" as defined in ERISA, (ii) have any "accumulated funding deficiency"
as defined in ERISA, (iii) have any Reportable Event as defined in ERISA, (iv)
terminate any defined benefit Plan, as defined in ERISA, to the extent such
termination gives rise to any funding obligations or penalties which are not
timely paid, or (v) be engaged in any proceeding in which the Pension Benefit
Guaranty Corporation shall seek appointment, or is appointed, as trustee or
administrator of any such Plan, as defined in ERISA, and with respect to this
sub-paragraph h (v) such event or condition (x) remains uncured for a period of
thirty (30) days from date of occurrence and (y) could, in the reasonable
opinion of Agent, subject Borrower to any tax, penalty or other liability
material to the business, operations or financial condition of Borrower;
11.1.6. The occurrence of an event of default pursuant to (i)
any of the other Loan Documents and such default shall continue beyond any
applicable grace period; or (ii) any other document or agreement of Borrower
evidencing Indebtedness of Borrower Money Borrowed in excess of the amount of
$250,000;
11.1.7. Any material loss, theft, damage or destruction of
any of the Collateral not fully covered (subject to such deductibles as Agent
shall have permitted) by insurance.
11.1.8. There shall occur a cessation of a substantial part
of the business of Borrower for a period which may be reasonably expected to
have a Material Adverse Effect; or Borrower shall suffer the loss or revocation
of any material license or permit now held or hereafter acquired by Borrower; or
Borrower shall be enjoined, restrained or in any way prevented by court,
governmental
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or administrative order from conducting all or any material part of its business
affairs; or any material part of the Collateral shall be taken through
condemnation or the value of such property shall be materially impaired through
condemnation.
11.1.9. Borrower or any Affiliate shall challenge or contest
in any action, suit or proceeding the validity or enforceability of this
Agreement or any of the other Loan Documents, the legality or enforceability of
any of the Obligations or the perfection or priority of any Lien granted to
Agent under this Agreement.
11.1.10. Borrower or any Executive Officer shall be criminally
indicted or convicted under any law that could reasonably be expected to lead to
a forfeiture of any material portion of the property of Borrower.
11.1.11. A judgment or order for the payment of money in an
amount that exceeds the uncontested insurance available therefor, if any, by
$100,000 or more shall be entered against the Borrower by any court and such
judgment or order shall either continue undischarged, unstayed or unbonded for
15 days or shall result in the creation of a Lien upon any asset of Borrower
that is not a Permitted Lien.
11.1.12. Any Investor Participant shall fail to pay the
purchase price owing under the Participation Agreement to which he or it is a
party on the due date thereof (whether directly or with the proceeds of the
applicable Participant Letter of Credit) or Borrower, an Investor Participant or
any Affiliate of any of them, shall challenge or contest in any action, suit or
proceeding the validity or enforceability of the Participation Agreements or any
of the Participant Letters of Credit.
11.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF COMMITMENTS.
Without in any way limiting the right of Agent to demand payment of any portion
of the Obligations payable on demand in accordance with this Agreement:
11.2.1. Upon or at any time after the occurrence of an Event
of Default (other than pursuant to SECTION 11.1.3 hereof) and for so long as
such Event of Default shall exist, Agent may in its discretion (and, upon
receipt of written instructions to do so from the Required Lenders, shall) (a)
declare the principal of and any accrued interest on the Loans and all other
Obligations owing under any of the Loan Documents to be, whereupon the same
shall become without further notice or demand (all of which notice and demand
Borrower expressly waives), forthwith due and payable and Borrower shall
forthwith pay to Agent the entire principal of and accrued and unpaid interest
on the Loans and other Obligations plus reasonable attorneys' fees and expenses
if such principal and interest are collected by or through an attorney-at-law
and (b) terminate the Commitments.
11.2.1. Upon the occurrence of an Event of Default specified
in SECTION 11.1.3 hereof, all of the Obligations shall become automatically due
and payable without declaration, notice or demand by Agent to or upon Borrower
and the Commitments shall automatically terminate as if terminated by Agent
pursuant to SECTION 6.2.1 hereof and with the effects specified in SECTION 6.2.4
hereof;
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provided, however, that, if Agent or Lenders shall continue to make Loans or
otherwise extend credit to Borrower pursuant to this Agreement after an
automatic termination of the Commitments by reason of the commencement of an
Insolvency Proceeding by or against Borrower, such Loans and other credit shall
nevertheless be governed by this Agreement and enforceable against and
recoverable from each Obligor as if such Insolvency Proceeding had never been
instituted
11.3. OTHER REMEDIES. Immediately upon the occurrence of any Event
of Default, Agent may to the extent permitted by law: (a) remove from any
premises where same may be located any and all documents, instruments, files and
records, and any receptacles or cabinets containing same, relating to the
Accounts, or Agent may use, at Borrower's expense, such of Borrower's personnel,
supplies or space at Borrower's places of business or otherwise, as may be
necessary to properly administer and control the Accounts or the handling of
collections and realizations thereon; (b) bring suit, in the name of Borrower or
Agent, and generally shall have all other rights respecting said Accounts,
including without limitation the right to: accelerate or extend the time of
payment, settle, compromise, release in whole or in part any amounts owing on
any Account and issue credits in the name of Borrower or Agent; (c) sell, assign
and deliver the Collateral and any returned, reclaimed or repossessed
merchandise, with or without advertisement, at public or private sale, for cash,
on credit or otherwise, at Agent's sole option and discretion, and Agent may bid
or become a purchaser at any such sale, free from any right of redemption, which
right is hereby expressly waived by Borrower; (d) foreclose the security
interests created herein by any available judicial procedure, or to take
possession of any or all of the Inventory without judicial process, and to enter
any premises where any Inventory may be located for the purpose of taking
possession of or removing the same; (e) require Borrower to deposit with Agent
funds equal to the LC Outstandings and, if Borrower fails promptly to make such
deposit, Agent may advance such amount as a Revolving Loan (whether or not an
Out-of-Formula Condition exists or is created thereby); and (f) exercise any
other rights and remedies provided in law, in equity, by contract or otherwise.
Any such deposit or advance shall be held by Agent as a reserve to fund future
payments on the LC Guaranty. At such time as all LC Guaranties have been paid or
terminated and all Letters of Credit have been drawn upon or expired, any
amounts remaining in such reserve shall be applied against any outstanding
Obligations, or, if all Obligations have been indefeasibly paid in full,
returned to Borrower. Agent shall have the right, without notice or
advertisement, to sell, lease, or otherwise dispose of all or any part of the
Collateral whether in its then condition or after further preparation or
processing, in the name of Borrower or Agent, or in the name of such other party
as Agent may designate, either at public or private sale or at any broker's
board, in lots or in bulk, for cash or for credit, with or without warranties or
representations, and upon such other terms and conditions as Agent in its sole
discretion may deem advisable, and Agent shall have the right to purchase at any
such sale. If any Inventory shall require rebuilding, repairing, maintenance or
preparation, Agent shall have the right, at its option, to do such of the
aforesaid as is necessary, for the purpose of putting the Inventory in such
saleable form as Agent shall deem appropriate. Borrower agrees, at the request
of Agent, to assemble the Inventory and to make it available to Agent at
premises of Borrower or elsewhere and to make available to Agent the premises
and facilities of Borrower for the purpose of Agent's taking possession of,
removing or putting the Inventory in saleable form. However, if notice of
intended disposition of any Collateral is required
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by law, it is agreed that ten (10) days notice shall constitute reasonable
notification and full compliance with the law. The net cash proceeds resulting
from Agent's exercise of any of the foregoing rights, (after deducting all
charges, costs and expenses, including reasonable attorneys' fees) shall be
applied by Agent to the payment of the Obligations, whether due or to become
due, in such order as Agent may elect, and Borrower shall remain liable to Agent
for any deficiencies, and Agent in turn agrees to remit to Borrower or its
successors or assigns, any surplus resulting therefrom. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative.
SECTION 12 AGENT
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT.
12.1.1. Each Lender hereby irrevocably appoints and
designates Agent as Agent to act as herein specified. Agent may, and each Lender
by its acceptance of a Note shall be deemed irrevocably to have authorized Agent
to, enter into all Loan Documents to which Agent is to be a party on the Closing
Date and all amendments hereto and all Security Documents thereafter executed by
Borrower, for its benefit and the Pro Rata benefit of Lenders and, except as
otherwise provided in this SECTION 12, to exercise such rights and powers under
this Agreement and the other Loan Documents as are specifically delegated to
Agent by the terms hereof and thereof, together with such other rights and
powers as are reasonably incidental thereto. Each Lender agrees that any action
taken by Agent or the Required Lenders in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by Agent or the Required
Lenders of any of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive right and authority to (a) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with this Agreement and the other Loan
Documents; (b) execute and deliver as Agent each Loan Document and accept
delivery of each such agreement delivered by Borrower or any other Obligor; (c)
act as collateral agent for Lenders for purposes of the perfection of all
security interests and Liens created by this Agreement or the Security Documents
with respect to all material items of the Collateral and, subject to the
direction of the Required Lenders, for all other purposes stated therein,
provided that Agent hereby appoints, authorizes and directs each Lender to act
as a collateral sub-agent for Agent and the other Lenders for purposes of the
perfection of all security interests and Liens with respect to Borrower's
Deposit Accounts maintained with, and all cash and Cash Equivalents held by,
such Lender; (d) subject to the direction of the Required Lenders, manage,
supervise or otherwise deal with the Collateral; and (e) except as may be
otherwise specifically restricted by the terms of this Agreement and subject to
the direction of the Required Lenders, exercise all remedies given to Agent with
respect to any of the Collateral under the Loan Documents relating thereto,
Applicable Law or otherwise. The duties of Agent shall be ministerial and
administrative in nature, and Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship with any Lender (or any
Lender's participants). Unless and until its authority to do so is revoked in
writing by Required Lenders, Agent alone shall be authorized to determine
whether any Accounts or Inventory constitute Eligible Accounts or Eligible
Inventory (basing such determination in each case upon the
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meanings given to such terms in Appendix A), or whether to impose or release any
reserve, and to exercise its own credit judgment in connection therewith, which
determinations and judgments, if exercised in good faith, shall exonerate Agent
from any liability to Lenders or any other Person for any errors in judgment.
12.1.2. Agent (which term, as used in this sentence, shall
include reference to Agent's officers, directors, employees, attorneys, agents
and Affiliates and to the officers, directors, employees, attorneys and agents
of Agent's Affiliates) shall not: (a) have any duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents or (b)
be required to take, initiate or conduct any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents except
to the extent directed to do so by the Required Lenders during the continuance
of any Event of Default. The conferral upon Agent any right hereunder shall not
imply a duty on Agent's part to exercise any such right unless instructed to do
so by the Required Lenders in accordance with this Agreement.
12.1.3. Agent may perform any of its duties by or through its
agents and employees and may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Borrower shall promptly
(and in any event, ON DEMAND) reimburse Agent for all reasonable expenses
(including all Extraordinary Expenses) incurred by Agent pursuant to any of the
provisions hereof or of any of the other Loan Documents or in the execution of
any of Agent's duties hereby or thereby created or in the exercise of any right
or power herein or therein imposed or conferred upon it or Lenders (excluding,
however, general overhead expenses), and each Lender agrees promptly to pay to
Agent, ON DEMAND, such Lender's Pro Rata share of any such reimbursement for
expenses (including Extraordinary Expenses) that is not timely made by Borrower
to Agent.
12.1.4. The rights, remedies, powers and privileges conferred
upon Agent hereunder and under the other Loan Documents may be exercised by
Agent without the necessity of the joinder of any other parties unless otherwise
required by Applicable Law. If Agent shall request instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any of the other Loan Documents, Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Required Lenders; and
Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any of the Loan Documents pursuant to or in accordance with
the instructions of the Required Lenders except for Agent's own gross negligence
or willful misconduct in connection with any action taken by it. Notwithstanding
anything to the contrary contained in this Agreement, Agent shall not be
required to take any action that is in its opinion contrary to Applicable Law or
the terms of any of the Loan Documents or that would in its reasonable opinion
subject it or any of its officers, employees or directors to personal liability;
provided, however, that if Agent shall fail or refuse to take action that is not
contrary to Applicable Law or to any of the terms of any of the Loan Documents
even if such action in Agent's opinion would subject it to potential liability,
the Required Lenders may remove
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Agent and appoint a successor Agent in the same manner and with the same effects
as is provided in this Agreement with respect to Agent's resignation.
12.1.5. Agent shall promptly, upon receipt thereof, forward
to each Lender (i) copies of any significant written notices, reports,
certificates and other information received by Agent from any Obligor (but only
if and to the extent such Obligor is not required by the terms of the Loan
Documents to supply such information directly to Lenders) and (ii) copies of the
results of any field audits by Agent with respect to Borrower. Agent shall have
no liability to any Lender for any errors in or omissions from any field audit
or other examination of Borrower or the Collateral, unless such error or
omission was the direct result of Agent's willful misconduct.
12.2. AGREEMENTS REGARDING COLLATERAL. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien upon
any Collateral (i) upon the termination of the Commitments and payment or
satisfaction of all of the Obligations, (ii) constituting Equipment sold or
disposed of in accordance with the terms of this Agreement if Borrower certifies
to Agent that the disposition is made in compliance with the terms of this
Agreement (and Agent may rely conclusively on any such certificate, without
further inquiry), or (iii) if approved or ratified by the Required Lenders.
Agent shall have no obligation whatsoever to any of the Lenders to assure that
any of the Collateral exists or is owned by Borrower or is cared for, protected
or insured or has been encumbered, or that Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected or enforced or entitled
to any particular priority or to exercise any duty of care with respect to any
of the Collateral.
12.3. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in so relying, upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
message or cable) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent. As to any matters not expressly provided for by this
Agreement or any of the other Loan Documents, Agent shall in all cases be fully
protected in acting or refraining from acting hereunder and thereunder in
accordance with the instructions of the Required Lenders, and such instructions
of the Required Lenders and any action taken or failure to act pursuant thereto
shall be binding upon Lenders.
12.4. ACTION UPON DEFAULT. Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default unless it has
received written notice from a Lender or Borrower specifying the occurrence and
nature of such Default or Event of Default. If Agent shall receive such a notice
of a Default or an Event of Default or shall otherwise acquire actual knowledge
of any Default or Event of Default, Agent shall promptly notify Lenders in
writing and Agent shall take such action and assert such rights under this
Agreement and the other Loan Documents, or shall refrain from taking such action
and asserting such rights, as the Required Lenders shall direct from time to
time. If any Lender shall receive a notice of a Default or an Event of Default
or shall otherwise acquire actual knowledge of any Default or Event of Default,
such Lender shall promptly notify Agent and the other Lenders in writing. As
provided in SECTION 12.3 hereof, Agent shall not
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be subject to any liability by reason of acting or refraining to act pursuant to
any request of the Required Lenders except for its own willful misconduct or
gross negligence in connection with any action taken by it. Before directing
Agent to take or refrain from taking any action or asserting any rights or
remedies under this Agreement and the other Loan Documents on account of any
Event of Default, the Required Lenders shall consult with and seek the advice of
(but without having to obtain the consent of) each other Lender, and promptly
after directing Agent to take or refrain from taking any such action or
asserting any such rights, the Required Lenders will so advise each other Lender
of the action taken or refrained from being taken and, upon request of any
Lender, will supply information concerning actions taken or not taken. In no
event shall the Required Lenders, without the prior written consent of each
Lender, direct Agent to accelerate and demand payment of the Loans held by one
Lender without accelerating and demanding payment of all other Loans or to
terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Loan Documents and without the prior written consent of
the Required Lenders, it will not take any legal action or institute any action
or proceeding against any Obligor with respect to any of the Obligations or
Collateral or accelerate or otherwise enforce its portion of the Obligations.
Without limiting the generality of the foregoing, none of Lenders may exercise
any right that it might otherwise have under Applicable Law to credit bid at
foreclosure sales, UCC sales or other similar sales or dispositions of any of
the Collateral except as authorized by the Required Lenders. Notwithstanding
anything to the contrary set forth in this SECTION 12.4 or elsewhere in this
Agreement, each Lender shall be authorized to take such action to preserve or
enforce its rights against any Obligor where a deadline or limitation period is
otherwise applicable and would, absent the taken of specified action, bar the
enforcement of Obligations held by such Lender against such Obligor, including
the filing of proofs of claim in any Insolvency Proceeding.
12.5. RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrower hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agent of
such receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lender
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this SECTION 12.5 may, to the
fullest extent permitted by Applicable Law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of Borrower in the amount of
such participation.
12.6. INDEMNIFICATION OF AGENT.
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12.6.1. Each Lender agrees to indemnify and defend the Agent
Indemnitees (to the extent not reimbursed by Borrower under this Agreement, but
without limiting the indemnification obligation of Borrower under this
Agreement), on a Pro Rata basis, and to hold each of the Agent Indemnitees
harmless from and against, any and all Claims which may be imposed on, incurred
by or asserted against any of the Agent Indemnitees in any way related to or
arising out of this Agreement or any of the other Loan Documents or any other
document contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses which Borrower
is obligated to pay under SECTION 14.2 hereof or amounts Agent may be called
upon to pay in connection with any lockbox or Dominion Account arrangement
contemplated hereby) or the enforcement of any of the terms hereof or thereof or
of any such other documents, provided that no Lender shall be liable to any
Agent Indemnitee for any of the foregoing to the extent that they result solely
from the willful misconduct or gross negligence of such Agent Indemnitee.
12.6.2. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if Agent should be sued by any receiver,
trustee in bankruptcy, debtor-in-possession or other Person on account of any
alleged preference or fraudulent transfer received or alleged to have been
received from Borrower or any other Obligor as the result of any transaction
under the Loan Documents, then in such event any monies paid by Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by Agent in the defense of same, shall be promptly reimbursed
to Agent by Lenders to the extent of each Lender's Pro Rata share.
12.6.3. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if at any time (whether prior to or after the
Commitment Termination Date) any action or proceeding shall be brought against
any of the Agent Indemnitees by an Obligor or by any other Person claiming by,
through or under an Obligor, to recover damages for any act taken or omitted by
Agent under any of the Loan Documents or in the performance of any rights,
powers or remedies of Agent against any Obligor, any Account Debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the Loan Documents, each Lender agrees to indemnify, defend
and hold the Agent Indemnitees harmless with respect thereto and to pay to the
Agent Indemnitees such Lender's Pro Rata share of such amount as any of the
Agent Indemnitees shall be required to pay by reason of a judgment, decree, or
other order entered in such action or proceeding or by reason of any compromise
or settlement agreed to by the Agent Indemnitees, including all interest and
costs assessed against any of the Agent Indemnitees in defending or compromising
such action, together with attorneys' fees and other legal expenses paid or
incurred by the Agent Indemnitees in connection therewith; provided, however,
that no Lender shall be liable to any Agent Indemnitee for any of the foregoing
to the extent that they arise solely from the willful misconduct or gross
negligence of such Agent Indemnitee. In Agent's discretion, Agent may also
reserve for or satisfy any such judgment, decree or order from proceeds of
Collateral prior to any distributions therefrom to or for the account of
Lenders.
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT. Agent shall in all
cases be fully justified in
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failing or refusing to act hereunder unless it shall have received further
assurances to its satisfaction from Lenders of their indemnification obligations
under SECTION 12.6 hereof against any and all Claims which may be incurred by
Agent by reason of taking or continuing to take any such action. Agent shall not
be liable to Lenders (or any Lender's participants) for any action taken or
omitted to be taken under or in connection with this Agreement or the other Loan
Documents except as a result of actual gross negligence or willful misconduct on
the part of Agent. Agent does not assume any responsibility for any failure or
delay in performance or breach by any Obligor or any Lender of its obligations
under this Agreement or any of the other Loan Documents. Agent does not make to
Lenders, and no Lender makes to Agent or the other Lenders, any express or
implied warranty, representation or guarantee with respect to the Loans, the
Collateral, the Loan Documents or any Obligor. Neither Agent nor any of its
officers, directors, employees, attorneys or agents shall be responsible to
Lenders, and no Lender nor any of its agents, attorneys or employees shall be
responsible to Agent or the other Lenders, for: (i) any recitals, statements,
information, representations or warranties contained in any of the Loan
Documents or in any certificate or other document furnished pursuant to the
terms hereof; (ii) the execution, validity, genuineness, effectiveness or
enforceability of any of the Loan Documents; (iii) the validity, genuineness,
enforceability, collectibility, value, sufficiency or existence of any
Collateral, or the perfection or priority of any Lien therein; or (iv) the
assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor or any Account Debtor. Neither
Agent nor any of its officers, directors, employees, attorneys or agents shall
have any obligation to any Lender to ascertain or inquire into the existence of
any Default or Event of Default, the observance or performance by any Obligor of
any of the duties or agreements of such Obligor under any of the Loan Documents
or the satisfaction of any conditions precedent contained in any of the Loan
Documents. Agent may consult with and employ legal counsel, accountants and
other experts and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such experts.
12.8. SUCCESSOR AGENT AND CO-AGENTS.
12.8.1. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at
least 30 days written notice thereof to each Lender and Borrower. Upon receipt
of any notice of such resignation, the Required Lenders, after prior
consultation with (but without having to obtain consent of) each Lender, shall
have the right to appoint a successor Agent which shall be (i) a Lender, (ii) a
United States based Affiliate of a Lender, or (iii) a commercial bank that is
organized under the laws of the United States or of any State thereof and has a
combined capital surplus of at least $100,000,000 and, provided no Default or
Event of Default then exist, is reasonably acceptable to Borrower (and for
purposes hereof, any successor to Agent shall be deemed acceptable to Borrower).
Upon the acceptance by a successor Agent of an appointment to serve as an Agent
hereunder, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent without
further act, deed or conveyance, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this SECTION 12 (including the provisions
of SECTION 12.6 hereof) shall continue in effect for its
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benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent. Notwithstanding anything to the contrary contained in this
Agreement, any successor by merger or acquisition of the stock or assets of
Agent shall continue to be Agent hereunder unless such successor shall resign in
accordance with the provisions hereof.
12.8.2. It is the purpose of this Agreement that there shall
be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business as agent or otherwise in any
jurisdiction. It is recognized that, in case of litigation under any of the Loan
Documents, or in case Agent deems that by reason of present or future laws of
any jurisdiction Agent might be prohibited from exercising any of the powers,
rights or remedies granted to Agent or Lenders hereunder or under any of the
Loan Documents or from holding title to or a Lien upon any Collateral or from
taking any other action which may be necessary hereunder or under any of the
Loan Documents, Agent may appoint an additional Person as a separate collateral
agent or co-collateral agent which is not so prohibited from taking any of such
actions or exercising any of such powers, rights or remedies. If Agent shall
appoint an additional Person as a separate collateral agent or co-collateral
agent as provided above, each and every remedy, power, right, claim, demand or
cause of action intended by any of the Loan Documents to be exercised by or
vested in or conveyed to Agent with respect thereto shall be exercisable by and
vested in such separate collateral agent or co-collateral agent, but only to the
extent necessary to enable such separate collateral agent or co-collateral agent
to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate collateral agent or
co-collateral agent shall run to and be enforceable by either of them. Should
any instrument from Lenders be required by the separate collateral agent or
co-collateral agent so appointed by Agent in order more fully and certainly to
vest in and confirm to him or it such rights, powers, duties and obligations,
any and all of such instruments shall, on request, be executed, acknowledged and
delivered by Lenders whether or not a Default or Event of Default then exists.
In case any separate collateral agent or co-collateral agent, or a successor to
either, shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, duties and obligations of such separate
collateral agent or co-collateral agent, so far as permitted by Applicable Law,
shall vest in and be exercised by the Agent until the appointment of a new
collateral agent or successor to such separate collateral agent or co-collateral
agent.
12.9. CONSENTS, AMENDMENTS AND WAIVERS; OUT-OF-FORMULA LOANS.
12.9.1. No amendment or modification of any provision of this
Agreement shall be effective without the prior written agreement of the Required
Lenders and Borrower, and no waiver of any Default or Event of Default shall be
effective without the prior written consent of the Required Lenders; provided,
however, that (i) no amendment or waiver shall be effective with respect to any
provision in SECTION 12 to the extent that such provisions apply to Agent or to
any other provision of any Loan Document as such provisions relate to the
rights, duties of immunities of Agent; (ii) no amendment to the provisions of
SECTIONS 3.3 OR 5.1.3 shall be effective without the prior written consent of
Agent; (iii) without the prior consent of all Lenders, no waiver of any Default
or Event of Default shall be effective if the Default or Event of Default
relates to Borrower's failure to observe or
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perform any covenant that may not be amended without the unanimous written
consent of Lenders (and, where so provided hereinafter, the written consent of
Agent) as hereinafter set forth in this SECTION 12.9.1; written agreement of all
Lenders (except a defaulting Lender as provided in SECTION 5.1.5 of this
Agreement) shall be required to effectuate any amendment, modification or waiver
that would (a) alter the provisions of SECTIONS 3.1, 3.3, 4.7, 4.8, 4.9, 5.5,
5.7, 5.10, 6.1, 12, 13, 14.2, OR 14.3 OR 14.14, the definitions of "Availability
Reserve," "Borrowing Base" and the other defined terms used in such definitions,
"Pro Rata," "Required Lenders" or any provision of this Agreement obligating
Agent to take certain actions at the direction of the Required Lenders, or any
provision of any of the Loan Documents regarding the Pro Rata treatment or
obligations of Lenders; (b) increase or otherwise modify any of the Commitments
(other than to reduce proportionately each Lender's Commitment in connection
with any overall reduction in the amount of the Commitments); (c) alter or amend
the rate of interest payable in respect of the Loans (except as may be expressly
authorized by the Loan Documents or as may be necessary, in Agent's judgment, to
comply with Applicable Law); (d) waive or agree to defer collection of any fee,
termination charge or other charge provided for under any of the Loan Documents
(except to the extent that the Required Lenders agree after and during the
continuance of any Event of Default to a waiver or deferral of any termination
charge provided for in SECTION 6.2.3 hereof) or the unused line fee in SECTION
4.2.2 hereof; (e) subordinate the payment of any of the Obligations to any other
Debt or the priority of any Liens granted to Agent under any of the Loan
Documents to Liens granted to any other Person, except as currently provided in
or contemplated by the Loan Documents in connection with Borrower's incurrence
of Permitted Purchase Money Debt, and except for Liens granted by an Obligor to
financial institutions with respect to amounts on deposit with such financial
institutions to cover returned items, processing and analysis charges and other
charges in the Ordinary Course of Business that relate to deposit accounts with
such financial institutions; (f) alter the time or amount of repayment of any of
the Loans or waive any Event of Default resulting from nonpayment of the Loans
on the due date thereof (or within any applicable period of grace); (g) forgive
any of the Obligations, except any portion of the Obligations held by a Lender
who consents in writing to such forgiveness; or (h) release any Obligor from
liability for any of the Obligations. No Lender shall be authorized to amend or
modify any Note held by it, unless such amendment or modification is consented
to in writing by all Lenders; provided, however, that the foregoing shall not be
construed to prohibit an amendment or modification to any provision of this
Agreement that may be effected pursuant to this SECTION 12.9.1 by agreement of
Borrower and the Required Lenders even though such an amendment or modification
results in an amendment or modification of the Notes by virtue of the
incorporation by reference in each of the Notes of this Agreement. The making of
any Loans hereunder by any Lender during the existence of a Default or Event of
Default shall not be deemed to constitute a waiver of such Default or Event of
Default. Any waiver or consent granted by Lenders hereunder shall be effective
only if in writing and then only in the specific instance and for the specific
purpose for which it was given.
12.9.2. In connection with any proposed amendment to any of
the Loan Documents or waiver of any of the terms thereof or any Default or Event
of Default thereunder, Borrower shall not solicit, request or negotiate for or
with respect to any such proposed amendment or waiver of any of the provisions
of this Agreement or any of the other Loan Documents unless each Lender shall be
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informed thereof by Borrower or Agent (to the extent known by Agent) and shall
be afforded an opportunity of considering the same and supplied by Borrower with
sufficient information to enable it to make an informed decision with respect
thereto. Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration or other thing of value, whether by way of supplemental or
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for or as an inducement to the consent to or
agreement by such Lender with any waiver or amendment of any of the terms and
provisions of this Agreement or any of the other Loan Documents unless such
remuneration or thing of value is concurrently paid, on the same terms, on a Pro
Rata basis to all Lenders.
12.9.3. Unless otherwise directed in writing by the Required
Lenders, Agent may require Lenders to honor requests by Borrower for
Out-of-Formula Loans (in which event, and notwithstanding anything to the
contrary set forth in SECTION 1.1.1 or elsewhere in this Agreement, Lenders
shall continue to make Revolving Loans up to their Pro Rata share of the
Commitments) and to forbear from requiring Borrower to cure an Out-of-Formula
Condition, (1) when no Event of Default exists (or if an Event of Default
exists, when the existence of such Event of Default is not known by Agent), if
and for so long as (i) such Out-of-Formula Condition does not continue for a
period of more than 15 consecutive days, following which no Out-of-Formula
Condition exists for at least 15 consecutive days before another Out-of-Formula
Condition exists, (ii) the amount of the Revolving Loans outstanding at any time
does not exceed the aggregate of the Commitments at such time, and (iii) the
Out-of-Formula Condition is not known by Agent at the time in question to exceed
$2,000,000; and (2) regardless of whether or not an Event of Default exists, if
Agent discovers the existence of an Out-of-Formula Condition not previously
known by it to exist, but Lenders shall be obligated to continue making such
Revolving Loans as directed by Agent only (A) if the amount of the
Out-of-Formula Condition is not increased by more than $1,000,000 above the
amount determined by Agent to exist on the date of discovery thereof and (B) for
a period not to exceed 5 Business Days. In no event shall Borrower or any other
Obligor be deemed to be a beneficiary of this SECTION 12.9.3 or authorized to
enforce any of the provisions of this SECTION 12.9.3.
12.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby
acknowledges and represents that it has, independently and without reliance upon
Agent or the other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund the Loans
to be made by it hereunder and to purchase participations in the LC Outstandings
pursuant to SECTION 3.3.2 hereof, and each Lender has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such Lender
feels necessary and appropriate, and has taken such care on its own behalf as
would have been the case had it entered into the other Loan Documents without
the intervention or participation of the other Lenders or Agent. Each Lender
hereby further acknowledges and represents that the other Lenders and Agent have
not made any representations or warranties to it concerning any Obligor, any of
the Collateral or the legality, validity, sufficiency or enforceability of any
of the Loan Documents. Each Lender also hereby acknowledges that it will,
independently and without reliance upon the other Lenders or Agent, and based
upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its
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own credit decisions in making Loans and in taking or refraining to take any
other action under this Agreement or any of the other Loan Documents. Except for
notices, reports and other information expressly required to be furnished to
Lenders by Agent hereunder, Agent shall not have any duty or responsibility to
provide any Lender with any notices, reports or certificates furnished to Agent
by any Obligor or any credit or other information concerning the affairs,
financial condition, business or Properties of any Obligor (or any of its
Affiliates) which may come into possession of Agent or any of Agent's
Affiliates.
12.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to Borrower and the
other Lenders that it has the power to enter into and perform its obligations
under this Agreement and the other Loan Documents, and that it has taken all
necessary and appropriate action to authorize its execution and performance of
this Agreement and the other Loan Documents to which it is a party, each of
which will be binding upon it and the obligations imposed upon it herein or
therein will be enforceable against it in accordance with the respective terms
of such documents.
12.12. THE REQUIRED LENDERS. As to any provisions of this Agreement
or the other Loan Documents under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval of
the Required Lenders shall be binding upon each Lender to the same extent and
with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrower shall not be
deemed to be a beneficiary of, or be entitled to enforce, sue upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires Agent or any Lender to act, or conditions their authority to act, upon
the direction or consent of the Required Lenders; and any action taken by Agent
or any Lender that requires the consent or direction of the Required Lenders as
a condition to taking such action shall, insofar as Borrower is concerned, be
presumed to have been taken with the requisite consent or direction of the
Required Lenders.
12.13. SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other Loan Documents are several and neither
Agent nor any Lender shall be responsible for the performance by the other
Lenders of its obligations or commitments hereunder or thereunder.
Notwithstanding any liability of Lenders stated to be joint and several to third
Persons under any of the Loan Documents, such liability shall be shared, as
among Lenders, Pro Rata according to the respective Commitments of Lenders.
12.14. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, Agent shall have the same rights and powers hereunder and under
the other Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its capacity as a
Lender. Agent and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with
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Borrower or any other Obligor, or any Affiliate of Borrower or any other
Obligor, as if it were any other bank and without any duty to account therefor
(or for any fees or other consideration received in connection therewith) to the
other Lenders.
12.15. NO THIRD PARTY BENEFICIARIES. This SECTION 12 is not intended
to confer any rights or benefits upon Borrower or any other Person except
Lenders and Agent, and no Person (including Borrower) other than Lenders and
Agent shall have any right to enforce any of the provisions of this SECTION 12
except as expressly provided in SECTION 12.17 hereof. As between Borrower and
Agent, any action that Agent may take or purport to take on behalf of Lenders
under any of the Loan Documents shall be conclusively presumed to have been
authorized and approved by Lenders as herein provided.
12.16. NOTICE OF TRANSFER. Agent may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolving Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agent.
12.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected
Lender") shall have (i) failed to fund its Pro Rata share of any Revolving Loan
requested (or deemed requested) by Borrower which such Lender is obligated to
fund under the terms of this Agreement and which such failure has not been
cured, (ii) requested compensation from Borrower under SECTION 4.7 to recover
increased costs incurred by such Lender (or its parent or holding company) which
are not being incurred generally by the other Lenders (or their respective
parents or holding companies), or (iii) delivered a notice pursuant to SECTION
4.6 hereof claiming that such Lender is unable to extend LIBOR Loans to Borrower
for reasons not generally applicable to the other Lenders, then, in any such
case and in addition to any other rights and remedies that Agent, any other
Lender or Borrower may have against such Affected Lender, Borrower or Agent may
make written demand on such Affected Lender (with a copy to Agent in the case of
a demand by Borrower and a copy to Borrower in the case of a demand by Agent)
for the Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances within 5
Business Days after the date of such demand, to one or more Lenders willing to
accept such assignment or assignments, or to one or more Eligible Assignees
designated by Agent, all of such Affected Lender's rights and obligations under
this Agreement (including its Commitments and all Loans owing to it) in
accordance with SECTION 13 hereof. Agent is hereby irrevocably authorized to
execute one or more Assignment and Acceptances as attorney-in-fact for any
Affected Lender which fails or refuses to execute and deliver the same within 5
Business Days after the date of such demand. The Affected Lender shall be
entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Revolving Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment. Upon the
replacement of any Affected Lender pursuant to this SECTION 12.17, such Affected
Lender shall cease to have any participation in, entitlement to, or other right
to share in the Liens of Agent in any Collateral and such Affected Lender shall
have no further liability to Agent,
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any Lender or any other Person under any of the Loan Documents (except as
provided in SECTION 12.6 hereof as to events or transactions which occur prior
to the replacement of such Affected Lender), including any commitment to make
Loans or purchase participations in LC Outstandings.
12.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.
12.18.1. All payments by any Lender to Agent shall be made not
later than the time set forth elsewhere in this Agreement on the Business Day
such payment is due; provided, however, that if such payment is due on demand by
Agent and such demand is made on the paying Lender after 11:00 a.m. on such
Business Day, then payment shall be made by 11:00 p.m. on the next Business Day.
Payment by Agent to any Lender shall be made by wire transfer, promptly
following Agent's receipt of funds for the account of such Lender and in the
type of funds received by Agent; provided, however, that if Agent receives such
funds at or prior to 1:00 p.m., Agent shall pay such funds to such Lender by
2:00 p.m. on such Business Day, but if Agent receives such funds after 1:00
p.m., Agent shall pay such funds to such Lender by 2:00 p.m. on the next
Business Day.
12.18.2. With respect to the payment of any funds from Agent
to a Lender or from a Lender to Agent, the party failing to make full payment
when due pursuant to the terms hereof shall, on demand by the other party, pay
such amount together with interest thereon at the Federal Funds Rate. In no
event shall Borrower be entitled to receive any credit for any interest paid by
Agent to any Lender, or by any Lender to Agent, at the Federal Funds Rate as
provided herein.
12.18.3. If Agent pays any amount to a Lender in the belief or
expectation that a related payment has been or will be received by Agent from an
Obligor and such related payment is not received by Agent, then Agent shall be
entitled to recover such amount from each Lender that receives such amount. If
Agent determines at any time that any amount received by it under this Agreement
or any of the other Loan Documents must be returned to an Obligor or paid to any
other Person pursuant to any Applicable Law, court order or otherwise, then,
notwithstanding any other term or condition of this Agreement or any of the
other Loan Documents, Agent shall not be required to distribute such amount to
any Lender.
SECTION 13 BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Borrower, Agent and Lenders and their respective
successors and assigns (which, in the case of Agent, shall include any successor
Agent appointed pursuant to SECTION 12.8 hereof), except that (i) Borrower shall
not have the right to assign its rights or delegate performance of any of its
obligations under any of the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with SECTION 13.3 hereof. Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with SECTION 13.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with Agent. Any assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who
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at the time of making such request or giving such authority or consent is the
holder of a Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
13.2. PARTICIPATIONS.
13.2.1. Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with Applicable Law, at
any time sell to one or more banks or other financial institutions (each a
"Participant") a participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any Note for all purposes under the Loan
Documents, all amounts payable by Borrower under this Agreement and any of the
Notes shall be determined as if such Lender had not sold such participating
interests, and Borrower and Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents. If a Lender sells a participation to a Person other than an
Affiliate of such Lender, then such Lender shall give prompt written notice
thereof to Borrower and the other Lenders.
13.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than an
amendment, modification or waiver with respect to any Loans or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the stated interest rate or the stated rates at which fees are
payable with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Revolving Loan or Commitment, or releases from
liability Borrower or any Guarantor or releases any substantial portion of any
of the Collateral.
13.2.3. Benefit of Set-Off. Borrower agrees that each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent and subject to the same requirements under this Agreement (including
SECTION 12.5) as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of set-off with respect to the amount of participating
interests sold to each Participant. Lenders agree to share with each
Participant, and each Participant by exercising the right of set-off agrees to
share with each Lender, any amount received pursuant to the exercise of its
right of set-off, such amounts to be shared in accordance with SECTION 12.5
hereof as if each Participant were a Lender.
13.2.4. Notices. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent that any such notice may be required, and neither Agent nor any other
Lender shall have any obligation, duty or liability to any Participant
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of any other Lender. Without limiting the generality of the foregoing, neither
Agent nor any Lender shall have any obligation to give notices or to provide
documents or information to a Participant of another Lender.
13.3. ASSIGNMENTS.
13.3.1. Permitted Assignments. Subject to its giving at least
2 Business Days notice to Agent and Borrower, any Lender may, in accordance with
Applicable Law and with Agent's prior consent, assign to any Eligible Assignee
all or any part of its rights and obligations under the Loan Documents, so long
as (i) each assignment is of a constant, and not a varying, ratable percentage
of all of the transferor Lender's rights and obligations under the Loan
Documents with respect to the Loans and the LC Outstandings and, in the case of
a partial assignment, is in a minimum principal amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount; (ii) except in the
case of an assignment in whole of a Lender's rights and obligations under the
Loan Documents or an assignment by one original signatory to this Agreement to
another such signatory, immediately after giving effect to any assignment, the
aggregate amount of the Commitments retained by the transferor Lender shall in
no event be less than $5,000,000; and (iii) the parties to each such assignment
shall execute and deliver to Agent, for its acceptance and recording, an
Assignment and Acceptance. Nothing contained herein shall limit in any way the
right of Lenders to assign (i) to any Eligible Assignee all of their rights and
obligations under the Loan Documents or (ii) all or any portion of the Loans
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors and any
Operating Circular issued by such Federal Reserve Bank, provided that in the
case of this clause (ii) any payment in respect of such assigned Loans made by
Borrower to the assigning Lender in accordance with the terms of this Agreement
shall satisfy Borrower's obligations hereunder in respect of such assigned Loans
to the extent of such payment, but no such assignment shall release the
assigning Lender from its obligations hereunder.
13.3.2. Effect; Effective Date. Upon (i) delivery to Agent of
a notice of assignment substantially in the form attached as EXHIBIT G hereto,
together with any consents required by SECTION 13.3.1, and (ii) payment of a
$5,000 fee to the Agent for processing any assignment to an Eligible Assignee
that is not an Affiliate of the transferor Lender, such assignment shall become
effective on the effective date specified in such notice of assignment. On and
after the effective date of such assignment, such Eligible Assignee shall for
all purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of the
Lender under the Loan Documents to the same extent as if it were an original
party thereto, and no further consent or action by Borrower, Lenders or Agent
shall be required to release the transferor Lender with respect to the
Commitment (or portion thereof) of such Lender and Obligations assigned to such
Eligible Assignee. Upon the consummation of any assignment to an Eligible
Assignee pursuant to this SECTION 13.3, the transferor Lender, Agent and
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Eligible Assignee, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
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assignment. If the transferor Lender shall have assigned all of its interests,
rights and obligations under this Agreement pursuant to SECTION 13.3.1 hereof,
such transferor Lender shall no longer have any obligation to indemnify Agent
with respect to any transactions, events or occurrences that transpire after the
effective date of such assignment, and each Eligible Assignee to which such
transferor shall make an assignment shall be responsible to Agent to indemnify
Agent in accordance with this Agreement with respect to transactions, events and
occurrences transpiring on and after the effective date of such assignment to
it.
13.3.3. Dissemination of Information. Borrower authorizes
each Lender and Agent to disclose to any Participant, any Eligible Assignee or
any other Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee"), and any prospective Transferee, any and all information
in Agent's or such Lender's possession concerning Borrower, the Subsidiaries or
the Collateral, subject to appropriate confidentiality undertakings on the part
of such Transferee.
13.4. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 5.14 hereof.
SECTION 14 MISCELLANEOUS
14.1. POWER OF ATTORNEY. Borrower hereby irrevocably designates,
makes, constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact) and Agent, or Agent's
designee, may, without notice to Borrower and in either Borrower's or Agent's
name, but at the cost and expense of Borrower:
14.1.1. At such time or times as Agent or said designee, in
its sole discretion, may determine, endorse Borrower's name on any Payment Item
or proceeds of the Collateral which come into the possession of Agent or under
Agent's control.
14.1.2. At such time or times upon or after the occurrence of
an Event of Default as Agent or Agent's designee in its sole discretion may
determine: (i) demand payment of the Accounts from the Account Debtors, enforce
payment of the Accounts by legal proceedings or otherwise, and generally
exercise all of Borrower's rights and remedies with respect to the collection of
the Accounts; (ii) settle, adjust, compromise, discharge or release any of the
Accounts or other Collateral or any legal proceedings brought to collect any of
the Accounts or other Collateral; (iii) sell or assign any of the Accounts and
other Collateral upon such terms, for such amounts and at such time or times as
Agent deems advisable; (iv) take control, in any manner, of any item of payment
or proceeds relating to any Collateral; (v) prepare, file and sign Borrower's
name to a proof of claim in bankruptcy or similar document against any Account
Debtor or to any notice of Lien, assignment or satisfaction of Lien or similar
document in connection with any of the Collateral; (vi) receive, open and
dispose of all mail addressed to Borrower and to notify postal authorities to
change the address for delivery thereof to such address as Agent may designate;
(vii) endorse the name of Borrower
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upon any of the items of payment or proceeds relating to any Collateral and
deposit the same to the account of Agent on account of the Obligations; (viii)
endorse the name of Borrower upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to any Accounts or Inventory of any Obligor and any other Collateral; (ix) use
Borrower's stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to the Accounts, Inventory, Equipment and any other
Collateral; (xi) make and adjust claims under policies of insurance; and (xii)
do all other acts and things necessary, in Agent's determination, to fulfill
Borrower's obligations under this Agreement.
14.2. GENERAL INDEMNITY. Borrower hereby agrees to indemnify and
defend the Indemnitees and to hold the Indemnitees harmless from and against any
Claim ever suffered or incurred by any of the Indemnitees arising out of or
related to this Agreement or any of the other Loan Documents, the performance by
Agent or Lenders of their duties or the exercise of any of their rights or
remedies under this Agreement or any of the other Loan Documents, or as a result
of Borrower's failure to observe, perform or discharge any of Borrower's duties
hereunder. Borrower shall also indemnify and defend the Indemnitees against and
save the Indemnitees harmless from all Claims of any Person arising out of,
related to, or with respect to any transactions entered into pursuant to this
Agreement or Agent's Lien upon the Collateral. Without limiting the generality
of the foregoing, this indemnity shall extend to any Claims asserted against or
incurred by any of the Indemnitees by any Person under any Environmental Laws or
similar laws by reason of Borrower's or any other Person's failure to comply
with laws applicable to solid or hazardous waste materials or other toxic
substances. Additionally, if any Taxes (excluding Taxes imposed upon or measured
solely by the net income of Agent and Lenders, but including any intangibles
tax, stamp tax, recording tax or franchise tax) shall be payable by Agent or any
Obligor on account of the execution or delivery of this Agreement, or the
execution, delivery, issuance or recording of any of the other Loan Documents,
or the creation or repayment of any of the Obligations hereunder, by reason of
any Applicable Law now or hereafter in effect, Borrower will pay (or will
promptly reimburse Agent and Lenders for the payment of) all such Taxes,
including any interest and penalties thereon, and will indemnify and hold
Indemnitees harmless from and against all liability in connection therewith. The
foregoing indemnities shall not apply to Claims incurred by any of the
Indemnitees as a direct and proximate result of their own gross negligence or
willful misconduct or that arise out of any disputes arising solely out of the
relationship between Agent and any Lender.
14.3. SURVIVAL OF ALL INDEMNITIES. Notwithstanding anything to the
contrary in this Agreement or any of the other Loan Documents, the obligation of
Borrower and each Lender with respect to each indemnity given by it in this
Agreement, whether given by Borrower to Agent Indemnitees, Lender Indemnitees or
Agent Indemnitees or by any Lender to any Agent Indemnitees or Agent
Indemnitees, shall survive the payment in full of the Obligations and the
termination of any of the Commitments.
14.4. MODIFICATION OF AGREEMENT. This Agreement may not be modified,
altered or
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amended, except by an agreement in writing signed by Borrower and Agent and
Lenders (or, where otherwise expressly allowed by SECTION 12 hereof, the
Required Lenders in lieu of Agent and Lenders); provided, however, that no
consent, written or otherwise, of Borrower shall be necessary or required in
connection with any amendment of any of the provisions of SECTION 12 (other than
SECTION 12.17) or any other provision of this Agreement that affects only the
rights, duties and responsibilities of Lenders and Agent as among themselves so
long as no such amendment imposes any additional obligations on Borrower.
14.5. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that this Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters and that such limitations, tests and measures are cumulative and
each must be performed, except as may be expressly stated to the contrary in
this Agreement. Except as otherwise provided in any of the other Loan Documents
by specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
14.7. EXECUTION IN COUNTERPARTS. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument.
14.8. AGENT'S OR REQUIRED LENDERS' CONSENT. Whenever Agent's,
Lenders' or Required Lenders' consent is required to be obtained under this
Agreement or any of the other Loan Documents as a condition to any action,
inaction, condition or event, Agent and each Lender shall be authorized to give
or withhold its consent in its sole and absolute discretion and to condition its
consent upon the giving of additional collateral security for the Obligations,
the payment of money or any other matter.
14.9. NOTICES. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be sent by certified or registered mail,
return receipt requested, personal delivery against receipt or by telecopier or
other facsimile transmission and shall be deemed to have been validly served,
given or delivered when delivered against receipt or, in the case of facsimile
transmission, when received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at the office where
the noticed party's telecopier is located, in
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each case addressed to the noticed party at the address shown for such party on
the signature page hereof or, in the case of a Person who becomes a Lender after
the date hereof, at the address shown on the Assignment and Acceptance by which
such Person became a Lender. Notwithstanding the foregoing, no notice to or upon
Agent pursuant to SECTIONS [1.3], [2.1], [3.1] OR [5.2.2] shall be effective
until after actually received by the individual to whose attention at Agent such
notice is required to be sent. Any written notice, request or demand that is not
sent in conformity with the provisions hereof shall nevertheless be effective on
the date that such notice, request or demand is actually received by the
individual to whose attention at the noticed party such notice, request or
demand is required to be sent.
14.10. PERFORMANCE OF BORROWER'S OBLIGATIONS. If Borrower shall fail
to discharge any covenant, duty or obligation hereunder or under any of the
other Loan Documents, Agent may, in its sole discretion at any time or from time
to time, for Borrower's account and at Borrower's expense, pay any amount or do
any act required of Borrower hereunder or under any of the Loan Documents or
otherwise lawfully requested by Agent to enforce any of the Loan Documents or
Obligations, preserve, protect, insure or maintain any of the Collateral, or
preserve, defend, protect or maintain the validity or priority of Agent's Liens
in any of the Collateral, including the payment of any judgment against
Borrower, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord claim, any other Lien upon or with respect to
any of the Collateral. All payments that Agent may make under this Section and
all out-of-pocket costs and expenses (including Extraordinary Expenses) that
Agent pays or incurs in connection with any action taken by it hereunder shall
be reimbursed to Agent by Borrower on demand with interest from the date such
payment is made or such costs or expenses are incurred to the date of payment
thereof at the Default Rate applicable for Revolving Loans that are Chase Bank
Rate Loans. Any payment made or other action taken by Agent under this Section
shall be without prejudice to any right to assert an Event of Default hereunder
and to proceed thereafter as provided herein or in any of the other Loan
Documents.
14.11. CREDIT INQUIRIES. Borrower hereby authorizes and permits Agent
and Lenders (but Agent and Lenders shall have no obligation) to respond to usual
and customary credit inquiries from third parties concerning Borrower or any
Subsidiaries.
14.12. TIME OF ESSENCE. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
14.13. ENTIRE AGREEMENT; APPENDIX A, EXHIBITS AND SCHEDULES. This
Agreement and the other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written. Appendix A, each of the Exhibits
and each of the Schedules attached hereto are incorporated into this Agreement
and by this reference made a part hereof.
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14.14. INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
14.15. OBLIGATIONS SEVERAL . The obligations of each Lender hereunder
are several, and no Lender shall be responsible for the obligations or
Commitment of any other Lender. Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute the
Lenders to be a partnership, association, joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of this Agreement and any of the other Loan Documents and it shall not be
necessary for Agent or any other Lender to be joined as an additional party in
any proceeding for such purpose.
14.16. GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
ATLANTA, GEORGIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA; PROVIDED, HOWEVER, THAT IF ANY
OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN GEORGIA, THE
LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT'S
OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF THE STATE OF
GEORGIA. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF
ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, ANY
LENDER OR AGENT, BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF
COBB COUNTY, GEORGIA, OR, AT AGENT'S OPTION, THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA, ATLANTA DIVISION, SHALL HAVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG BORROWER, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NONCONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY CERTIFIED MAIL ADDRESSED TO
BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF
OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY AGENT OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.
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14.17. WAIVERS BY BORROWER. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND
EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY
TIME HELD BY AGENT ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER
[THIS SPACE WAS LEFT BLANK INTENTIONALLY]
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AGENT MAY DO IN THIS REGARD; (III) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL
OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (IV) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (V) NOTICE OF ACCEPTANCE
HEREOF. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO AGENT'S AND LENDER'S ENTERING INTO THIS AGREEMENT AND THAT AGENT
AND LENDERS ARE RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH
BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
IN WITNESS WHEREOF, this Agreement has been duly executed in Atlanta,
Georgia, on the day and year specified at the beginning of this Agreement.
BORROWER:
ATTEST: EMERGE INTERACTIVE, INC.
By:
------------------------- ------------------------------
Secretary Title:
[CORPORATE SEAL]
Address:
10315 102nd Terrace
Sebastian, Florida 32958
Attention: Mr. Sunny Handa
Telecopier No.: (561) 589-3779
LENDER:
THE CIT GROUP/
BUSINESS CREDIT, INC.
Revolving Commitment: $30,000,000 By:
-----------------------------
Title:
------------------------
LIBOR Lending Office:
1200 Ashwood Parkway
Suite 150
Atlanta, Georgia 30338
Attention: Office Head
Telecopier No.: (770) 522-7673
[Signatures continued on following page]
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AGENT:
THE CIT GROUP/
BUSINESS CREDIT, INC.
as Agent
By:
------------------------------
Title:
------------------------
Address:
1200 Ashwood Parkway
Suite 150
Atlanta, Georgia 30338
Attention: Office Head
Telecopier No.: (770) 522-7673
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