Exhibit 4.29
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BAIRNCO CORPORATION,
▇▇▇▇▇, INC.,
KASCO CORPORATION,
▇▇▇▇▇▇▇ & ▇▇▇▇ GMBH,
ATLANTIC SERVICE CO. LTD.,
ATLANTIC SERVICE CO. (UK) LTD. AND
EUROKASCO S.A.
as Borrowers
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LOAN AND SECURITY AGREEMENT
Dated as of November 9, 2006
$42,000,000.00
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CERTAIN FINANCIAL INSTITUTIONS,
as Lenders
and
BANK OF AMERICA, N.A.,
as Agent
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TABLE OF CONTENTS
Page
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Section 1. DEFINITIONS; RULES OF CONSTRUCTION............................- 1 -
1.1. Definitions................................................- 1 -
1.2. Accounting Terms..........................................- 24 -
1.3. Certain Matters of Construction...........................- 24 -
Section 2. CREDIT FACILITIES............................................- 25 -
2.1. Revolver Commitment.......................................- 25 -
2.2. Term Loan Commitment......................................- 27 -
2.3. Letter of Credit Facility.................................- 27 -
2.4. Foreign Currency Loans; Intra-Lender Issues...............- 29 -
Section 3. INTEREST, FEES AND CHARGES...................................- 32 -
3.1. Interest..................................................- 32 -
3.2. Fees......................................................- 33 -
3.3. Computation of Interest, Fees, Yield Protection...........- 33 -
3.4. Reimbursement Obligations.................................- 34 -
3.5. Illegality................................................- 34 -
3.6. Increased Costs...........................................- 34 -
3.7. Capital Adequacy..........................................- 35 -
3.8. Mitigation................................................- 35 -
3.9. Funding Losses............................................- 35 -
3.10. Maximum Interest..........................................- 35 -
Section 4. LOAN ADMINISTRATION..........................................- 36 -
4.1. Manner of Borrowing and Funding Revolver Loans............- 36 -
4.2. Defaulting Lender.........................................- 37 -
4.3. Number and Amount of LIBOR Loans; Determination of Rate...- 38 -
4.4. Borrower Agent............................................- 38 -
4.5. One Obligation............................................- 38 -
4.6. Effect of Termination.....................................- 38 -
Section 5. PAYMENTS.....................................................- 39 -
5.1. General Payment Provisions................................- 39 -
5.2. Repayment of Revolver Loans...............................- 39 -
5.3. Repayment of Term Loans...................................- 39 -
5.4. Payment of Other Obligations..............................- 40 -
5.5. Marshaling; Payments Set Aside............................- 40 -
5.6. Post-Default Allocation of Payments.......................- 40 -
5.7. Application of Payments...................................- 41 -
5.8. Loan Account; Account Stated..............................- 41 -
5.9. Taxes.....................................................- 41 -
5.10. Withholding Tax Exemption.................................- 41 -
5.11. Currency Fluctuations.....................................- 42 -
5.12. Nature and Extent of Each Borrower's Liability............- 42 -
Section 6. CONDITIONS PRECEDENT.........................................- 44 -
6.1. Conditions Precedent to Initial Loans.....................- 44 -
6.2. Conditions Precedent to All Credit Extensions.............- 46 -
6.3. Limited Waiver of Conditions Precedent....................- 46 -
Section 7. COLLATERAL...................................................- 46 -
7.1. Grant of Security Interest................................- 46 -
7.2. Lien on Deposit Accounts; Cash Collateral.................- 47 -
7.3. Real Estate Collateral....................................- 48 -
7.4. Other Collateral..........................................- 48 -
7.5. No Assumption of Liability................................- 48 -
7.6. Further Assurances........................................- 48 -
7.7. Foreign Subsidiary Stock..................................- 48 -
Section 8. COLLATERAL ADMINISTRATION....................................- 48 -
8.1. Borrowing Base Certificates...............................- 48 -
8.2. Administration of Accounts................................- 49 -
8.3. Administration of Inventory...............................- 50 -
8.4. Administration of Equipment...............................- 50 -
8.5. Administration of Deposit Accounts; Other Account Matters.- 51 -
8.6. General Provisions........................................- 51 -
8.7. Power of Attorney.........................................- 52 -
Section 9. REPRESENTATIONS AND WARRANTIES...............................- 52 -
9.1. General Representations and Warranties....................- 52 -
9.2. Complete Disclosure.......................................- 56 -
Section 10. COVENANTS AND CONTINUING AGREEMENTS..........................- 56 -
10.1. Affirmative Covenants.....................................- 57 -
10.2. Negative Covenants........................................- 59 -
10.3. Financial Covenants.......................................- 62 -
Section 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT.......................- 62 -
11.1. Events of Default.........................................- 62 -
11.2. Remedies upon Default.....................................- 63 -
11.3. License...................................................- 64 -
11.4. Setoff....................................................- 64 -
11.5. Remedies Cumulative; No Waiver............................- 64 -
11.6. Judgment Currency.........................................- 65 -
Section 12. AGENT........................................................- 65 -
12.1. Appointment, Authority and Duties of Agent................- 65 -
12.2. Agreements Regarding Collateral and Field Examination
Reports...................................................- 66 -
12.3. Reliance By Agent.........................................- 67 -
12.4. Action Upon Default.......................................- 67 -
12.5. Ratable Sharing...........................................- 67 -
12.6. Indemnification of Agent Indemnitees......................- 68 -
12.7. Limitation on Responsibilities of Agent...................- 68 -
12.8. Successor Agent and Co-Agents.............................- 68 -
12.9. Due Diligence and Non-Reliance............................- 69 -
12.10. Replacement of Certain Lenders............................- 69 -
12.11. Remittance of Payments and Collections....................- 69 -
12.12. Agent in its Individual Capacity..........................- 70 -
12.13. Agent Titles..............................................- 70 -
12.14. No Third Party Beneficiaries..............................- 70 -
Section 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.........- 70 -
13.1. Successors and Assigns....................................- 70 -
13.2. Participations............................................- 71 -
13.3. Assignments...............................................- 71 -
13.4. Tax Treatment.............................................- 72 -
13.5. Representation of Lenders.................................- 72 -
Section 14. MISCELLANEOUS................................................- 72 -
14.1. Consents, Amendments and Waivers..........................- 72 -
14.2. Indemnity.................................................- 73 -
14.3. Notices and Communications................................- 73 -
14.4. Performance of Borrowers' Obligations.....................- 74 -
(ii)
14.5. Credit Inquiries..........................................- 74 -
14.6. Severability..............................................- 74 -
14.7. Cumulative Effect; Conflict of Terms......................- 74 -
14.8. Counterparts; Facsimile Signatures........................- 74 -
14.9. Entire Agreement..........................................- 74 -
14.10. Obligations of Credit Parties Several.....................- 74 -
14.11. Confidentiality...........................................- 74 -
14.12. [Reserved]................................................- 75 -
14.13. GOVERNING LAW.............................................- 75 -
14.14. Consent to Forum..........................................- 75 -
14.15. Waivers by Borrowers......................................- 75 -
14.16. PATRIOT Act Notice........................................- 76 -
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Revolver Note
Exhibit B Form of Term Loan Note
Exhibit C Assignment and Acceptance
Exhibit D Assignment Notice
Exhibit E Form of Compliance Certificate
Schedule 1.1 Commitments of Lenders
Schedule 8.5 Deposit Accounts
Schedule 8.6.1 Business Locations
Schedule 9.1.4 Names and Capital Structure
Schedule 9.1.5 Former Names and Companies
Schedule 9.1.12 Patents, Trademarks, Copyrights and Licenses
Schedule 9.1.15 Environmental Matters
Schedule 9.1.16 Restrictive Agreements
Schedule 9.1.17 Litigation
Schedule 9.1.19 Pension Plans
Schedule 9.1.21 Labor Contracts
Schedule 10.2.2 Existing Liens
Schedule 10.2.17 Existing Affiliate Transactions
(iii)
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is dated as of November 9, 2006, among
BAIRNCO CORPORATION, a Delaware corporation ("BAIRNCO"), ▇▇▇▇▇, INC., a Delaware
corporation ("▇▇▇▇▇"), KASCO CORPORATION, a Delaware corporation ("KASCO"),
▇▇▇▇▇▇▇ & ▇▇▇▇ GMBH, a Gesellschaft mit beschrankter Haftung organized under the
laws of the Federal Republic of Germany ("GERMAN BORROWER"), ATLANTIC SERVICE
CO. LTD, a corporation organized under the laws of Canada ("CANADIAN BORROWER"),
ATLANTIC SERVICE CO. (UK) LTD., an English company ("UK BORROWER"), EUROKASCO
S.A., a societe anonyme organized under the laws of France ("FRENCH BORROWER";
and together with Bairnco, ▇▇▇▇▇, Kasco, German Borrower and Canadian Borrower,
collectively, "BORROWERS"), the financial institutions party to this Agreement
from time to time as lenders (collectively, "LENDERS"), and BANK OF AMERICA,
N.A., a national banking association, individually as a Lender and as Issuing
Bank and in its capacity as agent for the Lenders (together with its successors
in such capacity, "AGENT").
R E C I T A L S:
Borrowers have requested that Lenders make available a credit facility, to
be used by Borrowers to finance their mutual and collective business enterprise.
Lenders are willing to provide such credit facility on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties agree as follows:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
1.1. DEFINITIONS. As used herein, the following terms have the
meanings set forth below:
ACCOUNT - as defined in the UCC, including all rights to payment for
goods sold or leased, or for services rendered.
ACCOUNT DEBTOR - a Person who is obligated under an Account, Chattel
Paper or General Intangible.
ACCOUNTS FORMULA AMOUNT - 85% (or such lesser percentage as Agent
may in its discretion determine from time to time) of the Value of
Eligible Accounts.
ACQUIRED RESIDENTIAL PROPERTIES - those proceeds of Real Estate
acquired by Southern Saw Acquisition Corporation in the Asset Purchase
that are described on SCHEDULE 1.1B.
ADJUSTED LIBOR - for any Interest Period, with respect to LIBOR
Loans, the per annum rate of interest (rounded upward, if necessary, to
the nearest 1/8th of 1%) appearing on Telerate Page 3750, or if such page
is unavailable, the Reuters Screen LIBO Page (or any successor page of
either, as applicable), as the London interbank offered rate for deposits
in Dollars (or Canadian Dollars, Euro or Pounds Sterling, as applicable,
for each Foreign Currency Loan) at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; PROVIDED, HOWEVER, if the Reuters
Screen LIBO Page is used and more than one rate is shown on such page, the
applicable rate shall be the arithmetic mean thereof. If for any reason
none of the foregoing rates is available, the Offshore Base Rate shall be
the rate per annum determined by Agent as the rate of interest at which
Dollar deposits in the approximate amount of the applicable LIBOR Loan
would be offered to major banks in the offshore Dollar (or Canadian
Dollars, Euro or Pounds Sterling, as applicable, for each Foreign Currency
Loan) market at or about 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period. If the Board of Governors or other governmental or
regulatory body, including the Bank of England or the European Central
Bank, shall impose a Reserve Percentage with respect to LIBOR deposits,
then Adjusted LIBOR shall equal the amount determined above, divided by 1
minus the Reserve Percentage.
AFFILIATE - with respect to any Person, another Person (a) who
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such first Person; (b) who
beneficially owns 10% or more of the voting securities or any class of
Equity Interests of such first Person; (c) at least 10% of whose voting
securities or any class of Equity Interests is beneficially owned,
directly or indirectly, by such first Person; or (d) who is an officer,
director, partner or managing member of such first Person; provided,
however, that for purposes of this Agreement, Steel Partners II, LLP,
which has made a tender offer for the stock of Bairnco, is not an
Affiliate of Borrower. "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause direction of the management
and policies of a Person, whether through ownership of Equity Interests,
by contract or otherwise.
AGENT INDEMNITEES - Agent and its officers, directors, employees,
Affiliates, agents and attorneys.
AGENT PROFESSIONALS - attorneys, accountants, appraisers, auditors,
business valuation experts, environmental engineers or consultants,
turnaround consultants, and other professionals and experts retained by
Agent.
ALLOCABLE AMOUNT - as defined in SECTION 5.12.3.
ANTI-TERRORISM LAWS - any laws relating to terrorism or money
laundering, including the PATRIOT Act.
APPLICABLE LAW - all laws, rules, regulations and governmental
guidelines applicable to the Person, conduct, transaction, agreement or
matter in question, including all applicable statutory law, common law and
equitable principles, and all provisions of constitutions, treaties,
statutes, rules, regulations, orders and decrees of Governmental
Authorities.
APPLICABLE MARGIN - with respect to any Type of Loan, the margin set
forth below, as determined by the Leverage Ratio for the last Fiscal
Quarter:
LIBOR
Leverage Base Rate Revolver Base Rate Term LIBOR Term Letter of
Level Ratio Revolver Loans Loans Loans Loans Credit Fee
----- ----- -------------- ----- ----- ----- ----------
I < 1.0 to 1.0 0.00% 1.00% 0.00% 1.25% 0.75%
II > 1.0 < 1.5 0.00% 1.25% 0.00% 1.50% 1.00%
III > 1.5 < 2.0 0.00% 1.50% 0.00% 1.75% 1.25%
IV > 2.0 to 1.0 0.00% 1.75% 0.00% 2.00% 1.50%
Until Agent's receipt pursuant to SECTION 10.1.2 of the financial
statements and corresponding Compliance Certificate for the Fiscal Quarter
ended September 30, 2006, margins shall be determined as if Level III were
applicable. Thereafter, the margins shall be subject to increase or
decrease upon receipt by Agent pursuant to SECTION 10.1.2 of the financial
statements and corresponding Compliance Certificate for the last Fiscal
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Quarter, which change shall be effective on the first Business Day of the
calendar month following receipt. If, by the first Business Day of a
month, any financial statements and Compliance Certificate due in the
preceding month have not been received, then the margins shall be
determined as if Level IV were applicable, from such day until the first
Business Day of the calendar month following actual receipt. If the
current Borrowing Base Certificate, applicable financial statements and
Compliance Certificate of Borrowers are not received by Agent by the date
required pursuant to SECTION 10.1.3, Agents and Lenders shall be entitled
to accrue and receive (and Borrowers shall be obligated to pay) interest
at the Default Rate to the extent authorized by Section 3.1.
APPROVED CREDIT ENHANCEMENT - with respect to an Account of a
Borrower, in Agent's discretion and at its option, an irrevocable letter
of credit that is in form and substance acceptable to Agent, issued or
confirmed by a bank acceptable to Agent, and payable at a place of payment
within the jurisdiction of such Borrower, the proceeds of which letter of
credit are assigned to Agent for the benefit of Lenders (with such
assignment acknowledged by the issuing or confirming bank) or, if so
requested by Agent, duly transferred to Agent for the benefit of Lenders
(together with sufficient documentation to permit direct draws under any
such letter of credit by Agent for the benefit of Lenders).
APPROVED FUND - any Person (other than a natural person) that is
engaged in making, holding or investing in extensions of credit in its
ordinary course of business and is administered or managed by a Lender, an
entity that administers or manages a Lender, or an Affiliate of either.
ASSET DISPOSITION - a sale, lease, license, consignment, transfer or
other disposition of Property of an Obligor, including a disposition of
Property in connection with a sale-leaseback transaction or synthetic
lease.
ASSET PURCHASE - the purchase by Kasco or a Subsidiary of Kasco of
substantially all of the assets of Sellers in accordance with the Asset
Purchase Agreement.
ASSET PURCHASE AGREEMENT - the Asset Purchase Agreement among
Sellers, Southern Saw Acquisition Corporation, a wholly-owned Subsidiary
of Kasco, and Kasco, dated October 11, 2006.
ASSIGNMENT AND ACCEPTANCE - an assignment agreement between a Lender
and Eligible Assignee, in the form of EXHIBIT C.
AVAILABILITY - determined as of any date, the amount that Borrowers
are entitled to borrow as Revolver Loans, being the Borrowing Base minus
the principal balance of all Revolver Loans.
AVAILABILITY RESERVE - on any date, an amount equal to the sum of
the following and calculated in such currency as Agent may determine to be
appropriate in its discretion (without duplication): (a) the Inventory
Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the
Bank Product Reserve; (e) the Dilution Reserve; (f) all accrued Royalties,
whether or not then due and payable by a Borrower; (g) the aggregate
amount of Foreign Currency Loans outstanding on such date; (h) the MED
Rejection Reserve; (i) the aggregate amount of liabilities secured by
Liens upon Collateral that are senior to Agent's Liens (but imposition of
any such reserve shall not waive an Event of Default arising therefrom);
and (j) such additional reserves, in such amounts and with respect to such
matters, as Agent in its Credit Judgment may elect to impose from time to
time.
AVERAGE REVOLVER LOAN BALANCE - for any period and with respect to
any Borrower, the Dollar Equivalent of the amount obtained by adding the
unpaid balance of Revolver Loans and the LC Obligations of such Borrower
at the end of each day for the period in question and by dividing such sum
by the number of days in such period.
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BANK OF AMERICA - Bank of America, N.A., a national banking
association, and its successors and assigns.
BANK OF AMERICA INDEMNITEES - Bank of America and its officers,
directors, employees, Affiliates, agents and attorneys.
BANK PRODUCT - any of the following products, services or facilities
extended to any Borrower or Subsidiary by Bank of America or any of its
Affiliates: (a) Cash Management Services; (b) products under Hedging
Agreements; (c) commercial credit card and merchant card services; and (d)
leases and other banking products or services as may be requested by any
Borrower or Subsidiary, other than Letters of Credit.
BANK PRODUCT DEBT - Debt and other obligations of an Obligor
relating to Bank Products.
BANK PRODUCT RESERVE - the aggregate amount of reserves established
by Agent from time to time in its discretion in respect of Bank Product
Debt.
BANKRUPTCY CODE - Title 11 of the United States Code.
BASE RATE - the rate of interest announced by Bank of America from
time to time as its prime rate. Such rate is a reference rate only and
Bank of America may make loans or other extensions of credit at, above or
below it. Any change in the prime rate announced by Bank of America shall
take effect at the opening of business on the effective date specified in
the public announcement of the change.
BASE RATE LOAN - any Loan that bears interest based on the Base
Rate.
BASE RATE REVOLVER LOAN - a Revolver Loan that bears interest based
on the Base Rate.
BOARD OF GOVERNORS - the Board of Governors of the Federal Reserve
System.
BORROWED MONEY - with respect to any Obligor, without duplication,
its (a) Debt that (i) arises from the lending of money by any Person to
such Obligor, (ii) is evidenced by notes, drafts, bonds, debentures,
credit documents or similar instruments, (iii) accrues interest or is a
type upon which interest charges are customarily paid (excluding trade
payables owing in the Ordinary Course of Business), or (iv) was issued or
assumed as full or partial payment for Property; (b) Capital Leases; (c)
reimbursement obligations with respect to letters of credit; and (d)
guaranties of any Debt of the foregoing types owing by another Person.
BORROWER AGENT - as defined in SECTION 4.4.
BORROWING - a group of Loans of one Type that are made on the same
day or are converted into Loans of one Type on the same day.
BORROWING BASE - on any date of determination, an amount equal to
the lesser of (a) the aggregate amount of Revolver Commitments, MINUS the
LC Reserve; or (b) the sum of the Accounts Formula Amount, PLUS the
Inventory Formula Amount, MINUS the Availability Reserve.
BORROWING BASE CERTIFICATE - a certificate, in form and substance
satisfactory to Agent, by which Borrowers certify calculation of the
Borrowing Base.
- 4 -
BUSINESS DAY - any day (a) excluding Saturday, Sunday and any other
day on which banks are permitted to be closed under the laws of the States
of North Carolina and Georgia; and (b) when used with reference to a LIBOR
Loan, also excluding any day on which banks do not conduct dealings in
Dollar deposits on the London interbank market.
CALCULATION DATE - as defined in SECTION 5.11.1.
CANADIAN DOLLAR OR CDN$ - the lawful currency of Canada.
CAPITAL ADEQUACY REGULATION - any law, rule, regulation, guideline,
request or directive of any central bank or other Governmental Authority,
whether or not having the force of law, regarding capital adequacy of a
bank or any Person controlling a bank.
CAPITAL EXPENDITURES - all liabilities incurred, expenditures made
or payments due (whether or not made) by a Borrower or Subsidiary for the
acquisition of any fixed assets, or any improvements, replacements,
substitutions or additions thereto with a useful life of more than one
year, including the principal portion of Capital Leases.
CAPITAL LEASE - any lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
CASH COLLATERAL - cash, and any interest or other income earned
thereon, that is delivered to Agent to Cash Collateralize any Obligations.
CASH COLLATERAL ACCOUNT - a demand deposit, money market or other
account established by Agent at such financial institution as Agent may
select in its discretion, which account shall be subject to Agent's Liens
for the benefit of Secured Parties.
CASH COLLATERALIZE - the delivery of cash to Agent, as security for
the payment of Obligations, in an amount equal to (a) with respect to LC
Obligations, 105% of the aggregate LC Obligations, and (b) with respect to
any inchoate or contingent Obligations (including Obligations arising
under Bank Products), Agent's good faith estimate of the amount due or to
become due, including all fees and other amounts relating to such
Obligations. "CASH COLLATERALIZATION" has a correlative meaning.
CASH EQUIVALENTS - (a) marketable obligations issued or
unconditionally guaranteed by, and backed by the full faith and credit of,
the United States government, maturing within 12 months of the date of
acquisition; (b) certificates of deposit, time deposits and bankers'
acceptances maturing within 12 months of the date of acquisition, and
overnight bank deposits, in each case which are issued by a commercial
bank organized under the laws of the United States or any state or
district thereof, rated A-1 (or better) by S&P or P-1 (or better) by
▇▇▇▇▇'▇ at the time of acquisition, and (unless issued by a Lender) not
subject to offset rights; (c) repurchase obligations with a term of not
more than 30 days for underlying investments of the types described in
clauses (a) and (b) entered into with any bank meeting the qualifications
specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P
or P-1 (or better) by ▇▇▇▇▇'▇, and maturing within nine months of the date
of acquisition; and (e) shares of any money market fund that has
substantially all of its assets invested continuously in the types of
investments referred to above, has net assets of at least $500,000,000 and
has the highest rating obtainable from either ▇▇▇▇▇'▇ or S&P.
CASH MANAGEMENT SERVICES - any services provided from time to time
by Bank of America or any of its Affiliates to any Borrower or Subsidiary
in connection with operating, collections, payroll, trust, or other
depository or disbursement accounts, including automatic clearinghouse,
controlled disbursement, depository, electronic funds transfer,
information reporting, lockbox, stop payment, overdraft and/or wire
transfer services.
- 5 -
CERCLA - the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. ss. 9601 ET SEQ.).
CHANGE OF CONTROL - (a) Bairnco ceases to own and control,
beneficially and of record, directly or indirectly, all Equity Interests
in all other Borrowers; (b) a change in the majority of directors of
Bairnco, unless approved by the then majority of directors; (c) all or
substantially all of a Borrower's assets are sold or transferred, other
than sale or transfer to another Borrower; or (d) any Person or related
group of Persons acquires by way of a purchase, merger, consolidation or
other business combination 66 ?% of the Equity Interests entitled to vote
in the election of directors of a Borrower.
CHATTEL PAPER - as defined in the UCC.
CLAIMS - all liabilities, obligations, losses, damages, penalties,
judgments, proceedings, costs and expenses of any kind (including remedial
response costs, reasonable attorneys' fees and Extraordinary Expenses) at
any time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or
asserted against any Indemnitee in any way relating to (a) any Loan
Documents or transactions relating thereto, (b) any action taken or
omitted to be taken by any Indemnitee in connection with any Loan
Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) failure by any Obligor to perform or
observe any terms of any Loan Document, in each case including all costs
and expenses relating to any investigation, litigation, arbitration or
other proceeding (including an Insolvency Proceeding or appellate
proceedings), whether or not the applicable Indemnitee is a party thereto.
CLOSING DATE - as defined in SECTION 6.1.
COATED ADHESIVE FILM INVENTORY - Inventory consisting of rolls of
coated adhesive film that is produced by the Adhesive Films Division of
▇▇▇▇▇ and that would be finished goods but for the completion of cutting
of such film to customers' specifications.
COLLATERAL - all Property described in SECTION 7.1, all Property
described in any Security Documents as security for any Obligations, and
all other Property that now or hereafter secures (or is intended to
secure) any Obligations.
COMMERCIAL TORT CLAIM - as defined in the UCC.
COMMITMENT - with respect to the commitment of a Lender to fund
Revolver Loans or the Term Loan or to participate in LC Obligations, the
amount of the commitment of such Lender as shown on the signature pages
hereof or SCHEDULE 1.1 from time to time (as the same may be modified from
time to time as a result of such Lender's consummation of an assignment
pursuant to an Assignment and Acceptance); and the term "COMMITMENTS"
means the commitments hereunder of all Lenders.
COMMITMENT TERMINATION DATE - the earliest to occur of (a) the
Revolver Termination Date; (b) the date on which Borrowers terminate the
Revolver Commitments pursuant to SECTION 2.1.4; or (c) the date on which
the Revolver Commitments are terminated pursuant to SECTION 11.2.
- 6 -
COMMONWEALTH JURISDICTION - Australia, Guam, New Zealand, Puerto
Rico, the Virgin Islands and the United Kingdom.
COMPLIANCE CERTIFICATE - a certificate, substantially in the form of
EXHIBIT E by which Borrowers certify compliance with SECTION 10.3 and
calculate the Fixed Charge Coverage Ratio and the applicable level for the
Applicable Margin.
CONTINGENT OBLIGATION - any obligation of a Person arising from a
guaranty, indemnity or other assurance of payment or performance of any
Debt, lease, dividend or other obligation ("PRIMARY OBLIGATIONS") of
another obligor ("PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including any obligation of such Person under any (a)
guaranty, endorsement, co-making or sale with recourse of an obligation of
a primary obligor; (b) obligation to make take-or-pay or similar payments
regardless of nonperformance by any other party to an agreement; and (c)
arrangement (i) to purchase any primary obligation or security therefor,
(ii) to supply funds for the purchase or payment of any primary
obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless
the holder of any primary obligation against loss in respect thereof. The
amount of any Contingent Obligation shall be deemed to be the stated or
determinable amount of the primary obligation (or, if less, the maximum
amount for which such Person may be liable under the instrument evidencing
the Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability with respect thereto.
CREDIT JUDGMENT - Agent's judgment exercised in good faith, based
upon its consideration of any factor that it believes (a) could adversely
affect the quantity, quality, mix or value of Collateral (including any
Applicable Law that may inhibit collection of an Account), the
enforceability or priority of Agent's Liens, or the amount that Agent and
Lenders could receive in liquidation of any Collateral; (b) suggests that
any collateral report or financial information delivered by any Obligor is
incomplete, inaccurate or misleading in any material respect; (c)
materially increases the likelihood of any Insolvency Proceeding involving
an Obligor; or (d) creates or could result in a Default or Event of
Default. In exercising such judgment, Agent may consider any factors that
could increase the credit risk of lending to Borrowers on the security of
the Collateral.
CREDIT PARTY - the Agent, a Lender or the Issuing Bank; and CREDIT
PARTIES means Agent, Lenders and Issuing Banks.
CWA - the Clean Water Act (33 U.S.C. ▇▇.▇▇. 1251 ET SEQ.).
DEBT - as applied to any Person, without duplication, (a) all items
that would be included as liabilities on a balance sheet in accordance
with GAAP, including Capital Leases, but excluding trade payables incurred
and being paid in the Ordinary Course of Business; (b) all Contingent
Obligations; (c) all reimbursement obligations in connection with letters
of credit issued for the account of such Person; and (d) in the case of a
Borrower, the Obligations. The Debt of a Person shall include any recourse
Debt of any partnership in which such Person is a general partner or joint
venturer.
DEFAULT - an event or condition that, with the lapse of time or
giving of notice, would constitute an Event of Default.
DEFAULT RATE - for any Obligation (including, to the extent
permitted by law, interest not paid when due), 2% plus the interest rate
otherwise applicable thereto.
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DEPOSIT ACCOUNT - as defined in the UCC.
DEPOSIT ACCOUNT CONTROL AGREEMENTS - the Deposit Account control
agreements to be executed by each institution maintaining a Deposit
Account for a Borrower, in favor of Agent, for the benefit of Secured
Parties, as security for the Obligations.
DILUTION - for any period with respect to any Borrower, the
fraction, expressed as a percentage, the numerator of which is the
aggregate amount of reductions in the Accounts of such Borrower for such
period other than by reason of Dollar (or equivalent currency) for Dollar
(or equivalent currency) cash payment and the denominator of which is the
aggregate Dollar (or equivalent currency) amount of the sales of such
Borrower for such period.
DILUTION RESERVE - on any date of determination, a reserve
established and revised from time to time by Agent in its discretion in
such amount as Agent may reasonably determine reflects the Dilution as of
any date with respect to the Accounts of any Borrower for the immediately
preceding 12-month period, to the extent such Dilution exceeds 5%.
DISTRIBUTION - any declaration or payment of a distribution,
interest or dividend on any Equity Interest (other than payment-in-kind);
any distribution, advance or repayment of Debt to a holder of Equity
Interests; or any purchase, redemption, or other acquisition or retirement
for value of any Equity Interest.
DISTRIBUTION CONDITIONS - each of the following conditions, the
satisfaction of each of which shall be satisfactory to Agent in its sole
discretion:
(i) No Default or Event of Default shall exist at the time of a
Distribution or result therefrom;
(ii) Borrower shall be Solvent at the time of, and after giving
effect to, any such Distribution; and
(iii) Borrower shall have delivered a Compliance Certificate to
Agent at least 5 days prior to such Distribution that reflects
the pro forma compliance by Borrower with the financial
covenant set forth in SECTION 10.3 of this Agreement.
DOCUMENT - as defined in the UCC.
DOLLAR EQUIVALENT - on any date, with respect to any amount
denominated in Dollars, such amount in Dollars, and with respect to any
stated amount in a currency other than Dollars, the amount of Dollars that
Agent determines (which determination shall be conclusive and binding
absent manifest error) would be necessary to be sold on such date at the
applicable Exchange Rate to obtain the stated amount of the other
currency.
DOLLARS - lawful money of the United States.
DOMINION ACCOUNT - a special account established by Borrowers at
Bank of America or another bank acceptable to Agent, over which Agent has
exclusive control for withdrawal purposes.
EBITDA - determined on a consolidated basis for Borrowers and
Subsidiaries, net income, calculated before interest expense, provision
for income taxes, depreciation and amortization expense, gains or losses
arising from the sale of capital assets, gains or losses arising from the
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write-up or write-down of assets, and any extraordinary gains or losses
(in each case, to the extent included in determining net income);
PROVIDED, THAT, for each Fiscal Month ended prior to the Closing Date,
EBITDA shall be determined on a pro forma basis by including Sellers'
Adjusted EBITDA for such Fiscal Month (subject to Agent's satisfaction
with Sellers' financial reporting).
ELIGIBLE ACCOUNT - an Account owing to a Borrower that arises in the
Ordinary Course of Business of such Borrower from the sale of Inventory or
the rendition of services or, in the case of Kasco and its Subsidiaries,
from the rental of Equipment, is subject to Agent's duly perfected,
enforceable and first priority Lien, is payable in Dollars is collected by
a Borrower in the United States and is deemed by Agent, in its Credit
Judgment, to be an Eligible Account. Without limiting the foregoing, no
Account shall be an Eligible Account if (a) it is unpaid for more than 60
days after the original due date, or it is due or unpaid more than 150
days after the original invoice date; provided that the aggregate amount
of Availability attributable at any time to Accounts due or unpaid more
than 90 days but less than 151 days after the original invoice date shall
not exceed $2,500,000; (b) 50% or more of the Accounts owing by the
Account Debtor are not deemed Eligible Accounts under the foregoing
clause; (c) when aggregated with other Accounts owing by the Account
Debtor, it exceeds 10% of the aggregate Eligible Accounts (or such higher
percentage as Agent may establish for the Account Debtor from time to
time); (d) it does not conform with a covenant or representation herein;
(e) it is owing by a creditor or supplier, or is otherwise subject to a
potential offset, counterclaim, dispute, deduction, discount, recoupment,
reserve, defense, chargeback, credit or allowance (but ineligibility shall
be limited to the amount thereof); (f) an Insolvency Proceeding has been
commenced by or against the Account Debtor; or the Account Debtor has
failed, has suspended or ceased doing business, is liquidating, dissolving
or winding up its affairs, or is not Solvent; (g) it arises from a sale by
a U.S. Borrower to an Account Debtor that has its principal office, assets
or place of business outside of the United States or Canada, except to the
extent that (i) the sale is supported or secured by an Approved Credit
Enhancement, or (ii) the sale is by a U.S. Borrower or a U.S. Subsidiary
of a U.S. Borrower to an Account Debtor that has its principal place of
business in a Commonwealth Jurisdiction or in a Select Foreign
Jurisdiction; PROVIDED THAT the aggregate amount of Availability
attributable at any time to Accounts owed by such Account Debtors in
Select Foreign Jurisdictions shall not exceed $3,000,000; (h) the Account
Debtor is any department, agency or instrumentality of any country or of
the United States of America, unless the applicable Borrower is not
prohibited from assigning the Account and does assign its right to payment
of such Account to an Agent, in a manner satisfactory to Agent, so as to
comply with the Assignment of Claims Act of 1940 (31 U.S.C. ss.3727 and 41
U.S.C. ss.15) or otHEr Applicable Law, or the Account Debtor is a state,
province, territory, 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; (i) the Account Debtor is
located in any jurisdiction which imposes conditions on the right of a
creditor to collect accounts receivable unless the applicable Borrower has
either qualified to transact business in such jurisdiction as a foreign
entity or filed a Notice of Business Activities Report or other required
report with the appropriate officials in those jurisdictions for the then
current year; (j) the Account Debtor is located in a jurisdiction in which
such Borrower is deemed to be doing business under the laws of such
jurisdiction and which denies creditors access to its courts in the
absence of qualification to transact business in such jurisdiction or of
the filing of any reports with such jurisdiction, unless such Borrower has
qualified as a foreign entity authorized to transact business in such
jurisdiction or has filed all required reports; (k) the Account is subject
to a Lien other than a Permitted Lien or is subject to any revendication,
repossession (or retention of title rights of unpaid suppliers to a
Borrower unless an Availability Reserve has been established by Agent);
(l) the goods giving rise to it have not been delivered to and accepted by
the Account Debtor, the services giving rise to it have not been accepted
by the Account Debtor, or it otherwise does not represent a final sale;
(m) it is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; (n) its payment has been extended, the Account
Debtor has made a partial payment, or it arises from a sale on a
cash-on-delivery basis; (o) the Account represents a progress billing or a
retainage or arises from a sale to an Affiliate of a Borrower, or a Person
controlled by an Affiliate of a Borrower, or from a sale on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment, or other repurchase or return basis; (p) such Borrower has
made any agreement with the Account Debtor for any deduction therefrom,
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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; (q) such Borrower has made an agreement with the Account
Debtor to extend the time of payment thereof; (r) the Account represents,
in whole or in part, a billing for interest, fees or late charges,
provided that such Account shall be ineligible only to the extent of the
amount of such billing; (s) it arises from the sale of Inventory that is
not Eligible Inventory pursuant to clause (b) of the definition of
"Eligible Inventory"; and (t) it arises from a retail sale (including
online sales) of Inventory to a Person who is purchasing the same
primarily for personal, family or household purposes. In calculating
delinquent portions of Accounts under clauses (a) and (b), credit balances
more than 90 days old will be excluded.
ELIGIBLE ASSIGNEE - a Person that is (a) a Lender, U.S.-based
Affiliate of a Lender or Approved Fund; (b) any other financial
institution approved by Agent and Borrower Agent (which approval by
Borrower Agent shall not be unreasonably withheld or delayed, and shall be
deemed given if no objection is made within two Business Days after notice
of the proposed assignment), that is organized under the laws of the
United States or any state or district thereof, has total assets in excess
of $5 billion, extends asset-based lending facilities in its ordinary
course of business and whose becoming an assignee would not constitute a
prohibited transaction under Section 4975 of ERISA or any other Applicable
Law; and (c) during any Event of Default, any Person acceptable to Agent
in its discretion.
ELIGIBLE INVENTORY - Inventory owned by a U.S. Borrower that Agent,
in its Credit Judgment, deems to be Eligible Inventory. Without limiting
the foregoing, no Inventory shall be Eligible Inventory unless it (a) is
finished goods, raw materials or Coated Adhesive Films Inventory, and not
other work-in-process, sub-assembled product, packaging or shipping
materials, labels, samples, display items, bags, replacement parts (other
than replacement parts held for sale by Kasco or its Subsidiaries in the
Ordinary Course of Business) or manufacturing supplies; (b) is not held on
consignment, nor subject to any deposit or downpayment; (c) is in new and
saleable condition and is not damaged, defective, shopworn or otherwise
unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and
does not constitute returned or repossessed goods; (e) meets all standards
imposed by any Governmental Authority; (f) conforms with the covenants and
representations herein; (g) is subject to Agent's duly perfected, first
priority Lien, and no other Lien; (h) is within the continental United
States or Canada, is not in transit except between locations of U.S.
Borrowers, and is not consigned to any Person; (i) is not subject to any
warehouse receipt or negotiable Document; (j) is not subject to any
License or other arrangement that restricts such Borrower's or Agent's
right to dispose of such Inventory, unless Agent has received an
appropriate Lien Waiver; (k) is not located on leased premises or in the
possession of a warehouseman, processor, repairman, mechanic, shipper,
freight forwarder or other Person, unless the lessor or such Person has
delivered a Lien Waiver or an appropriate Rent and Charges Reserve has
been established; and (l) is reflected in the details of a current
perpetual inventory report.
ENFORCEMENT ACTION - any action to enforce any Obligations or Loan
Documents or to realize upon any Collateral (whether by judicial action,
self-help, notification of Account Debtors, exercise of setoff or
recoupment, or otherwise).
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ENVIRONMENTAL AGREEMENT - each agreement of Borrowers with respect
to any Real Estate subject to a Mortgage, pursuant to which Borrowers
agree to indemnify and hold harmless Agent and Lenders from liability
under any Environmental Laws.
ENVIRONMENTAL LAWS - all Applicable Laws (including all programs,
permits and guidance promulgated by regulatory agencies), relating to
public health (but excluding occupational safety and health, to the extent
regulated by OSHA or similar foreign Governmental Authority) or the
protection or pollution of the environment, including CERCLA, RCRA and
CWA.
ENVIRONMENTAL NOTICE - a notice (whether written or oral) from any
Governmental Authority or other Person of any possible noncompliance with,
investigation of a possible violation of, litigation relating to, or
potential fine or liability under any Environmental Law, or with respect
to any Environmental Release, environmental pollution or hazardous
materials, including any complaint, summons, citation, order, claim,
demand or request for correction, remediation or otherwise.
ENVIRONMENTAL PROPERTY TRANSFER ACT - any applicable laws that
condition, restrict, prohibit or require any notification or disclosure
triggered by the transfer, sale, lease or closure of any property, deed or
title for any property for environmental reasons, including any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible Transfer
Acts."
ENVIRONMENTAL RELEASE - a release as defined in CERCLA or under any
other Environmental Law.
EQUIPMENT - as defined in the UCC, including all machinery,
apparatus, equipment, fittings, furniture, fixtures, motor vehicles and
other tangible personal Property (other than Inventory), and all parts,
accessories and special tools therefor, and accessions thereto.
EQUITY INTEREST - the interest of any (a) shareholder in a
corporation, (b) partner in a partnership (whether general, limited,
limited liability or joint venture), (c) member in a limited liability
company, or (d) other Person having any other form of equity security or
ownership interest.
ERISA - the Employee Retirement Income Security Act of 1974.
EURO OR (EURO) - the lawful currency of the participating countries
of the European Economic And Monetary Union that adopted a single currency
in accordance with the Maastricht Treaty.
EVENT OF DEFAULT - as defined in SECTION 11.
EXCESS AMOUNT - as defined in SECTION 5.11.3.
EXCHANGE RATE - on any date, (i) with respect to Canadian Dollars,
Pounds Sterling or Euro in relation to Dollars, the spot rate as quoted by
Bank of America at its noon spot rate at which Dollars are offered on such
date for Canadian Dollars, Pounds Sterling or Euro, as applicable, and
(ii) with respect to Dollars in relation to Canadian Dollars, Pounds
Sterling or Euro, the spot rate as quoted by Bank of America at its noon
spot rate at which Canadian Dollars, Pounds Sterling or Euro, as
applicable, are offered on such date for Dollars.
EXCLUDED TAX - Tax on the overall net income or gross receipts of a
Lender imposed by the jurisdiction in which such Lender's principal
executive office is located.
EXTRAORDINARY EXPENSES - all costs, expenses or advances that Agent
may incur during a Default or Event of Default, or during the pendency of
an Insolvency Proceeding of an Obligor, including those relating to (a)
any audit, inspection, repossession, storage, repair, appraisal,
insurance, manufacture, preparation or advertising for sale, sale,
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collection, or other preservation of or realization upon any Collateral;
(b) any action, arbitration or other proceeding (whether instituted by or
against Agent, any Lender, any Obligor, any representative of creditors of
an Obligor or any other Person) in any way relating to any Collateral
(including the validity, perfection, priority or avoidability of Agent's
Liens with respect to any Collateral), Loan Documents or Obligations,
including any lender liability or other Claims; (c) the exercise,
protection or enforcement of any rights or remedies of Agent in, or the
monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction
of any taxes, charges or Liens with respect to any Collateral; (e) any
Enforcement Action; (f) negotiation and documentation of any modification,
waiver, workout, restructuring or forbearance with respect to any Loan
Documents or Obligations; or (g) Protective Advances. Such costs, expenses
and advances 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 any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.
FISCAL MONTH - each of the twelve (12) consecutive four- or five-
week periods beginning on the first day of the Fiscal Year, in the pattern
4, 4, 5 within a Fiscal Quarter, except that the fourth Fiscal Quarter
shall always end on December 31, regardless of when it begins.
FISCAL QUARTER - each period of three consecutive Fiscal Months in
each Fiscal Year, the first of which Fiscal Quarters commences on January
1 of each Fiscal Year and the last of which Fiscal Quarters ends on
December 31 of each Fiscal Year.
FISCAL YEAR - the fiscal year of Borrowers and Subsidiaries for
accounting and tax purposes, ending on December 31 of each year.
FIXED CHARGE COVERAGE RATIO - the ratio, determined on a
consolidated basis for Borrowers and Subsidiaries for the most recent
twelve Fiscal Months, of (a) EBITDA MINUS Capital Expenditures (except
those financed with Borrowed Money other than Revolver Loans) and cash
taxes paid, to (b) Fixed Charges; PROVIDED THAT, for purposes of
calculating the Fixed Charge Coverage Ratio for any Fiscal Month ended
prior to the Closing Date, there shall be excluded (i) all Distributions
made prior to the Closing Date; and (ii) the aggregate amount of Capital
Expenditures related to Borrowers' Chinese facility made prior to the
Closing Date.
FIXED CHARGES - for any period, the sum of interest expense (other
than payment-in-kind), scheduled principal payments on Borrowed Money, and
Distributions made, determined as of the last day of such period for
Borrowers and Subsidiaries on a consolidated basis; PROVIDED THAT, for
each Fiscal Month ending after the Closing Date, through and including the
Fiscal Month ending September 30, 2007, interest expense and scheduled
principal payments on Borrowed Money shall be deemed to be an amount
calculated by adding the sum of all such interest expense and principal
payments made from the Closing Date through the date of determination,
multiplying such sum by 365, and dividing the product by the number of
days elapsed since the Closing Date.
FLSA - the Fair Labor Standards Act of 1938.
FOREIGN CURRENCY - the Euro, the Pound Sterling or the Canadian
Dollar.
FOREIGN CURRENCY BORROWER - the Canadian Borrower, the French
Borrower, the German Borrower and the UK Borrower.
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FOREIGN CURRENCY EQUIVALENT - at any time, with respect to any
amount denominated in Dollars, the equivalent amount thereof in the
applicable Foreign Currency as determined by Agent at such time on the
basis of the Exchange Rate for the purchase of such Foreign Currency with
Dollars.
FOREIGN CURRENCY LOAN - a Loan made or outstanding in a Foreign
Currency.
FOREIGN CURRENCY LOAN PARTICIPATION - as defined in SECTION 2.4.
FOREIGN CURRENCY LOAN PARTICIPATION FEE - as defined in SECTION 2.4.
FOREIGN CURRENCY LOAN PARTICIPATION SETTLEMENT - as defined in
SECTION 2.4.
FOREIGN CURRENCY LOAN PARTICIPATION SETTLEMENT AMOUNT - as defined
in SECTION 2.4.
FOREIGN CURRENCY LOAN PARTICIPATION SETTLEMENT DATE - as defined in
SECTION 2.4.
FOREIGN CURRENCY LOAN PARTICIPATION SETTLEMENT PERIOD - as defined
in SECTION 2.4.
FOREIGN CURRENCY SUBLIMIT - on any date of determination, an amount
equal to the Foreign Currency Equivalent of $3,000,000. The Foreign
Currency Sublimit is a sublimit within, and not an addition to, the
Revolver Commitments.
FOREIGN LENDER - any Lender that is organized under the laws of a
jurisdiction other than the laws of the United States, or any state or
district thereof.
FOREIGN PLAN - any employee benefit plan or arrangement maintained
or contributed to by any Obligor or Subsidiary that is not subject to the
laws of the United States, or any employee benefit plan or arrangement
mandated by a government other than the United States for employees of any
Obligor or Subsidiary.
FOREIGN SUBSIDIARY - a Subsidiary that is a "controlled foreign
corporation" under Section 957 of the Internal Revenue Code, such that a
guaranty by such Subsidiary of the Obligations or a Lien on the assets of
such Subsidiary to secure the Obligations would result in material tax
liability to Borrowers.
FULL PAYMENT - with respect to any Obligations, (a) the full and
indefeasible cash payment thereof, including any interest, fees and other
charges accruing during an Insolvency Proceeding (whether or not allowed
in the proceeding); (b) if such Obligations are LC Obligations or inchoate
or contingent in nature, Cash Collateralization thereof (or delivery of a
standby letter of credit acceptable to Agent in its discretion, in the
amount of required Cash Collateral); and (c) a release of any Claims of
Obligors against Agent, Lenders and Issuing Bank arising on or before the
payment date. No Loans shall be deemed to have been paid in full until all
Commitments related to such Loans have expired or been terminated.
FUNDED FOREIGN CURRENCY LOAN PARTICIPATION - with respect to any
Participating Foreign Currency Lender relating to Foreign Currency Loans
funded by Bank of America, (i) the aggregate amount paid by such
Participating Foreign Currency Lender to Bank of America pursuant to
SECTION 2.4.2 in respect of such Participating Foreign Currency Lender's
participation in the principal amount of Foreign Currency Loans funded by
Bank of America MINUS (ii) the aggregate amount paid to such Participating
Foreign Currency Lender by Bank of America pursuant to SECTION 2.4.2 in
respect of its participation in the principal amount of Foreign Currency
Loans funded by Bank of America, excluding in each case any payments made
in respect of interest accrued on the Foreign Currency Loans funded by
Bank of America. Bank of America's Funded Foreign Currency Loan
Participation in any Foreign Currency Loans funded by Bank of America
shall be equal to the outstanding principal amount of such Foreign
Currency Loans MINUS the total Funded Foreign Currency Loan Participations
of all other Lenders therein.
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GAAP - generally accepted accounting principles in the United States
in effect from time to time.
GENERAL INTANGIBLES - as defined in the UCC, including choses in
action, causes of action, company or other business records, inventions,
blueprints, designs, patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, service marks, goodwill, brand
names, copyrights, registrations, licenses, franchises, customer lists,
permits, tax refund claims, computer programs, operational manuals,
internet addresses and domain names, insurance refunds and premium
rebates, all rights to indemnification, and all other intangible Property
of any kind.
GOODS - as defined in the UCC.
GOVERNMENTAL APPROVALS - all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and required
reports to, all Governmental Authorities.
GOVERNMENTAL AUTHORITY - any federal, state, municipal, foreign or
other governmental department, agency, commission, board, bureau, court,
tribunal, instrumentality, political subdivision, or other entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions for or pertaining to any government or court, in
each case whether associated with the United States, a state, district or
territory thereof, or a foreign entity or government.
GUARANTOR PAYMENT - as defined in SECTION 5.12.3.
GUARANTORS - each of the Subsidiaries listed on SCHEDULE 1.1A and
each other Person who guarantees payment or performance of any
Obligations.
GUARANTY - each guaranty agreement executed by a Guarantor in favor
of Agent.
HEDGING AGREEMENT - an agreement relating to any swap, cap, floor,
collar, option, forward, cross right or obligation, or combination thereof
or similar transaction, with respect to interest rate, foreign exchange,
currency, commodity, credit or equity risk.
INDEMNITEES - Agent Indemnitees, Lender Indemnitees, Issuing Bank
Indemnitees and Bank of America Indemnitees.
INITIAL REAL ESTATE ASSESSMENT COSTS - the first $50,000 in
aggregate charges, costs and expenses of Agent in connection with
appraisals of Real Estate and Equipment and environmental site assessments
of Real Estate incurred before the Closing Date.
INSOLVENCY PROCEEDING - any case or proceeding commenced by or
against a Person under any state, federal or foreign law for, or any
agreement of such Person to, (a) the entry of an order for relief under
the Bankruptcy Code, or any other insolvency, debtor relief or debt
adjustment law; (b) the appointment of a receiver, trustee, liquidator,
administrator, conservator or other custodian for such Person or any part
of its Property; or (c) an assignment or trust mortgage for the benefit of
creditors.
INSTRUMENT - as defined in the UCC.
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INSURANCE ASSIGNMENT - each collateral assignment of insurance
pursuant to which an Obligor assigns to Agent, for the benefit of Secured
Parties, such Obligor's rights under key-man life, business interruption
or other insurance policies as Agent deems appropriate, as security for
the Obligations.
INTELLECTUAL PROPERTY - all intellectual and similar Property of a
Person, including inventions, designs, patents, patent applications,
copyrights, trademarks, service marks, trade names, trade secrets,
confidential or proprietary information, customer lists, know-how,
software and databases; all embodiments or fixations thereof and all
related documentation, registrations and franchises; all books and records
describing or used in connection with the foregoing; and all licenses or
other rights to use any of the foregoing.
INTELLECTUAL PROPERTY CLAIM - any claim or assertion (whether in
writing, by suit or otherwise) that a Borrower's or Subsidiary's
ownership, use, marketing, sale or distribution of any Inventory,
Equipment, Intellectual Property or other Property violates another
Person's Intellectual Property.
INTEREST PERIOD - as defined in SECTION 3.1.3.
INVENTORY - as defined in the UCC, including all goods intended for
sale, lease, display or demonstration; all work in process; and all raw
materials, and other materials and supplies of any kind that are or could
be used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or
consumed in a Borrower's business (but excluding Equipment).
INVENTORY FORMULA AMOUNT - the lesser of (a) $9,000,000; or (b) 50%
(or such lesser percentage as Agent may in its discretion determine from
time to time) of the Value of Eligible Inventory.
INVENTORY RESERVE - reserves established by Agent to reflect factors
that may negatively impact the Value of Inventory, including change in
salability, obsolescence, seasonality, theft, shrinkage, imbalance, change
in composition or mix, markdowns and vendor chargebacks.
INVESTMENT - any acquisition of all or substantially all assets of a
Person; any acquisition of record or beneficial ownership of any Equity
Interests of a Person; or any advance or capital contribution to or other
investment in a Person.
INVESTMENT PROPERTY - as defined in the UCC.
ISSUING BANK - Bank of America or an Affiliate of Bank of America.
ISSUING BANK INDEMNITEES - Issuing Bank and its officers, directors,
employees, Affiliates, agents and attorneys.
KASCO LOCKBOX ACCOUNT - the lockbox account at SunTrust Bank in the
name of Kasco.
LC APPLICATION - an application by Borrower Agent to Issuing Bank
for issuance of a Letter of Credit, in form and substance satisfactory to
Issuing Bank.
LC CONDITIONS - the following conditions necessary for issuance of a
Letter of Credit: (a) each of the conditions set forth in SECTION 6; (b)
after giving effect to such issuance, total LC Obligations do not exceed
the Letter of Credit Subline, no Overadvance exists and, if no Revolver
Loans are outstanding, the LC Obligations do not exceed the Borrowing Base
(without giving effect to the LC Reserve for purposes of this
calculation); (c) the expiration date of such Letter of Credit is (i) no
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more than 365 days from issuance, in the case of standby Letters of
Credit, (ii) no more than 120 days from issuance, in the case of
documentary Letters of Credit, and (iii) at least 20 Business Days prior
to the Revolver Termination Date; (d) the Letter of Credit and payments
thereunder are denominated in Dollars; and (e) the form of the proposed
Letter of Credit is satisfactory to Agent and Issuing Bank in their
discretion.
LC DOCUMENTS - all documents, instruments and agreements (including
LC Requests and LC Applications) delivered by Borrowers or any other
Person to Issuing Bank or Agent in connection with issuance, amendment or
renewal of, or payment under, any Letter of Credit.
LC OBLIGATIONS - the sum (without duplication) of (a) all amounts
owing by Borrowers for any drawings under Letters of Credit; (b) the
aggregate undrawn amount of all outstanding Letters of Credit; and (c) all
fees and other amounts owing with respect to Letters of Credit.
LC REQUEST - a request for issuance of a Letter of Credit, to be
provided by Borrower Agent to Issuing Bank, in form satisfactory to Agent
and Issuing Bank.
LC RESERVE - the aggregate of all LC Obligations, other than (a)
those that have been Cash Collateralized, and (b) if no Default or Event
of Default exists, those constituting charges owing to the Issuing Bank.
LENDER INDEMNITEES - Lenders and their officers, directors,
employees, Affiliates, agents and attorneys.
LENDERS - as defined in the preamble to this Agreement, including
Agent in its capacity as a provider of Swingline Loans and any other
Person who hereafter becomes a "Lender" pursuant to an Assignment and
Acceptance.
LETTER OF CREDIT - any standby or documentary letter of credit
issued by Issuing Bank for the account of a U.S. Borrower, or any
indemnity, guarantee, exposure transmittal memorandum or similar form of
credit support issued by Agent or Issuing Bank for the benefit of a
Borrower.
LETTER-OF-CREDIT RIGHT - as defined in the UCC.
LETTER OF CREDIT SUBLINE - $13,000,000.
LEVERAGE RATIO - the ratio, determined as of the end of any Fiscal
Quarter, of (a) Debt for Borrowed Money of Borrowers and Subsidiaries as
of the last day of such Fiscal Quarter, to (b) EBITDA for the four Fiscal
Quarters then ending.
LIBOR LOAN - each set of LIBOR Revolver Loans or LIBOR Term Loans
having a common length and commencement of Interest Period.
LIBOR REVOLVER LOAN - a Revolver Loan that bears interest based on
Adjusted LIBOR.
LIBOR TERM LOAN - a Term Loan that bears interest based on Adjusted
LIBOR.
LICENSE - any license or agreement under which an Obligor is
authorized to use Intellectual Property in connection with any
manufacture, marketing, distribution or disposition of Collateral, any use
of Property or any other conduct of its business.
LICENSOR - any Person from whom an Obligor obtains the right to use
any Intellectual Property.
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LIEN - any Person's interest in Property securing an obligation owed
to, or a claim by, such Person, whether such interest is based on common
law, statute or contract, including liens, security interests, pledges,
hypothecations, statutory trusts, reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and
other title exceptions and encumbrances affecting Property.
LIEN WAIVER - an agreement, in form and substance satisfactory to
Agent, by which (a) for any material Collateral located on leased
premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit Agent to enter upon the premises and
remove the Collateral or to use the premises to store or dispose of the
Collateral; (b) for any Collateral held by a warehouseman, processor,
shipper or freight forwarder, such Person waives or subordinates any Lien
it may have on the Collateral, agrees to hold any Documents in its
possession relating to the Collateral as agent for Agent, and agrees to
deliver the Collateral to Agent upon request; (c) for any Collateral held
by a repairman, mechanic or bailee, such Person acknowledges Agent's Lien,
waives or subordinates any Lien it may have on the Collateral, and agrees
to deliver the Collateral to Agent upon request; and (d) for any
Collateral subject to a Licensor's Intellectual Property rights, the
Licensor grants to Agent the right, vis-a-vis such Licensor, to enforce
Agent's Liens with respect to the Collateral, including the right to
dispose of it with the benefit of the Intellectual Property, whether or
not a default exists under any applicable License.
LOAN - a Revolver Loan or Term Loan.
LOAN ACCOUNT - the loan account established by each Lender on its
books pursuant to SECTION 5.8.
LOAN DOCUMENTS - this Agreement, Other Agreements and Security
Documents.
LOAN YEAR - a period commencing each calendar year on the same month
and day as the date of this 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.
MARGIN STOCK - as defined in Regulation U of the Board of Governors.
MATERIAL ADVERSE EFFECT - the effect of any event or circumstance
that, taken alone or in conjunction with other events or circumstances,
(a) has or could be reasonably expected to have a material adverse effect
on the business, operations, Properties, prospects or condition (financial
or otherwise) of any Obligor, on the value of any material Collateral, on
the enforceability of any Loan Documents, or on the validity or priority
of Agent's Liens on any Collateral; (b) impairs the ability of any Obligor
to perform any obligations under the Loan Documents, including repayment
of any Obligations; or (c) otherwise impairs the ability of any Credit
Party to enforce or collect any Obligations or to realize upon any
Collateral.
MATERIAL CONTRACT - any agreement or arrangement to which a Borrower
or Subsidiary is party (other than the Loan Documents) (a) that is deemed
to be a material contract under any securities law applicable to such
Obligor, including the Securities Act of 1933, (b) for which breach,
termination, nonperformance or failure to renew could reasonably be
expected to have a Material Adverse Effect, or (c) that relates to
Subordinated Debt, or Debt in an aggregate amount of $500,000 or more.
MED REJECTION RESERVE - on any date of determination, a reserve
established and revised from time to time by Agent in its discretion and
in such amount as Agent determines approximates the rejection rate of the
Value of Inventory consisting of copper clad laminates and prepreg bonding
finished goods provided by ▇▇▇▇▇.
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▇▇▇▇▇'▇ - ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
MORTGAGE - each mortgage, deed of trust or deed to secure debt
pursuant to which a Borrower grants to Agent, for the benefit of Secured
Parties, Liens upon the Real Estate owned by such Borrower, as security
for the Obligations.
MULTIEMPLOYER PLAN - any employee benefit plan or arrangement
described in Section 4001(a)(3) of ERISA that is maintained or contributed
to by any Obligor or Subsidiary.
NET PROCEEDS - with respect to an Asset Disposition, proceeds
(including, when received, any deferred or escrowed payments) received by
a Borrower or Subsidiary in cash from such disposition, net of (a)
reasonable and customary costs and expenses actually incurred in
connection therewith, including legal fees and sales commissions; (b)
amounts applied to repayment of Debt secured by a Permitted Lien senior to
Agent's Liens on Collateral sold; (c) transfer or similar taxes; and (d)
reserves for indemnities, until such reserves are no longer needed.
NOTES - each Revolver Note, Term Note or other promissory note
executed by a Borrower to evidence any Obligations.
NOTICE OF BORROWING - a Notice of Borrowing to be provided by
Borrower Agent to request the funding of a Borrowing of Revolver Loans, in
form satisfactory to Agent.
NOTICE OF CONVERSION/CONTINUATION - a Notice of
Conversion/Continuation to be provided by Borrower Agent to request a
conversion or continuation of any Loans as LIBOR Loans, in form
satisfactory to Agent.
OBLIGATIONS - all (a) principal of and premium, if any, on the
Loans, (b) LC Obligations and other obligations of Obligors with respect
to Letters of Credit, (c) interest, expenses, fees and other sums payable
by Obligors under Loan Documents, (d) obligations of Obligors under any
indemnity for Claims, (e) Extraordinary Expenses, (f) Bank Product Debt,
and (g) other Debts, obligations and liabilities of any kind owing by
Obligors pursuant to the Loan Documents, whether now existing or hereafter
arising, whether evidenced by a note or other writing, whether allowed in
any Insolvency Proceeding, whether arising from an extension of credit,
issuance of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or
several.
OBLIGOR - each Borrower, Guarantor, or other Person that is liable
for payment of any Obligations or that has granted a Lien in favor of
Agent on its assets to secure any Obligations.
ORDINARY COURSE OF BUSINESS - the ordinary course of business of any
Borrower or Subsidiary, consistent with past practices and undertaken in
good faith.
ORGANIC DOCUMENTS - with respect to any Person, its charter,
certificate or articles of incorporation, bylaws, articles of
organization, limited liability agreement, operating agreement, members
agreement, shareholders agreement, partnership agreement, certificate of
partnership, certificate of formation, voting trust agreement, or similar
agreement or instrument governing the formation or operation of such
Person.
OSHA - the Occupational Safety and Hazard Act of 1970.
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OTHER AGREEMENT - each Note; LC Document, Lien Waiver, Real Estate
Related Document, Borrowing Base Certificate, Compliance Certificate,
financial statement or report delivered hereunder, or other document,
instrument or agreement (other than this Agreement or a Security Document)
now or hereafter delivered by an Obligor or other Person to Agent or a
Lender in connection with any transactions relating hereto.
OVERADVANCE - as defined in SECTION 2.1.5.
OVERADVANCE LOAN - a Base Rate Revolver Loan made when an
Overadvance exists or is caused by the funding thereof.
PARTICIPANT - as defined in SECTION 13.2.
PARTICIPATING FOREIGN CURRENCY LENDER - as defined in SECTION 2.4.
PATENT ASSIGNMENT - each patent collateral assignment agreement
pursuant to which an Obligor assigns to Agent, for the benefit of Secured
Parties, such Obligor's interests in its patents, as security for the
Obligations.
PATRIOT ACT - the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
PAYMENT INTANGIBLE - as defined in the UCC.
PAYMENT ITEM - each check, draft or other item of payment payable to
a Borrower, including those constituting proceeds of any Collateral.
PERMITTED ASSET DISPOSITION - as long as no Default or Event of
Default exists and all Net Proceeds are remitted to Agent, an Asset
Disposition that is (a) a sale of Inventory in the Ordinary Course of
Business; (b) a disposition of Equipment that, in the aggregate during any
12 month period, has a fair market or book value (whichever is more) of
$1,000,000 or less; (c) a disposition of Inventory that is obsolete,
unmerchantable or otherwise unsalable in the Ordinary Course of Business;
(d) termination of a lease of real or personal Property that is not
necessary for the Ordinary Course of Business, could not reasonably be
expected to have a Material Adverse Effect and does not result from an
Obligor's default; (e) a disposition of the Acquired Residential
Properties; or (f) approved in writing by Agent and Required Lenders.
PERMITTED CONTINGENT OBLIGATIONS - Contingent Obligations (a)
arising from endorsements of Payment Items for collection or deposit in
the Ordinary Course of Business; (b) arising from Hedging Agreements
permitted hereunder; (c) existing on the Closing Date, and any extension
or renewal thereof that does not increase the amount of such Contingent
Obligation when extended or renewed; (d) incurred in the Ordinary Course
of Business with respect to surety, appeal or performance bonds, or other
similar obligations; (e) arising from customary indemnification
obligations in favor of purchasers in connection with dispositions of
Equipment permitted hereunder; (f) arising under the Loan Documents; or
(g) in an aggregate amount of $1,000,000 or less at any time.
PERMITTED LIEN - as defined in SECTION 10.2.2.
PERMITTED PURCHASE MONEY DEBT - Purchase Money Debt of Borrowers and
Subsidiaries that is unsecured or secured only by a Purchase Money Lien,
as long as the aggregate amount does not exceed $1,000,000 at any time.
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PERSON - any individual, corporation, limited liability company,
partnership, joint venture, joint stock company, land trust, business
trust, unincorporated organization, Governmental Authority or other
entity.
PLAN - an employee pension benefit plan that is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and that is either (a) maintained by a Borrower
or Subsidiary for employees or (b) maintained pursuant to a collective
bargaining agreement, or other arrangement under which more than one
employer makes contributions and to which a Borrower or Subsidiary is
making or accruing an obligation to make contributions or has within the
preceding five years made or accrued such contributions.
POUNDS STERLING AND THE SIGN (POUND) - lawful currency of the U.K.
and, if the U.K. adopts the Euro as its lawful currency, will include the
Euros.
PRO RATA - with respect to any Lender, a percentage (expressed as a
decimal, rounded to the ninth decimal place) determined (a) while Revolver
Commitments are outstanding, by dividing the amount of such Lender's
Revolver Commitment and Term Loan by the aggregate amount of all Revolver
Commitments and Term Loans; and (b) at any other time, by dividing the
amount of such Lender's Loans and LC Obligations by the aggregate amount
of all outstanding Loans and LC Obligations.
PROPERLY CONTESTED - with respect to any obligation of an Obligor,
(a) the obligation is subject to a bona fide dispute regarding amount or
the Obligor's liability to pay; (b) the obligation is being properly
contested in good faith by appropriate proceedings promptly instituted and
diligently pursued; (c) appropriate reserves have been established in
accordance with GAAP; (d) non-payment could not have a Material Adverse
Effect, nor result in forfeiture or sale of any assets of the Obligor; (e)
no Lien is imposed on assets of the Obligor, unless bonded and stayed to
the satisfaction of Agent; and (f) if the obligation results from entry of
a judgment or other order, such judgment or order is stayed pending appeal
or other judicial review.
PROPERTY - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
PROTECTIVE ADVANCES - as defined in SECTION 2.1.6.
PURCHASE MONEY DEBT - (a) Debt (other than the Obligations) for
payment of any of the purchase price of fixed assets; (b) Debt (other than
the Obligations) incurred within 10 days before or after acquisition of
any fixed assets, for the purpose of financing any of the purchase price
thereof; and (c) any renewals, extensions or refinancings (but not
increases) thereof.
PURCHASE MONEY LIEN - a Lien that secures Purchase Money Debt,
encumbering only the fixed assets acquired with such Debt and constituting
a Capital Lease or a purchase money security interest under the UCC.
RCRA - the Resource Conservation and Recovery Act (42 U.S.C. ▇▇.▇▇.
6991-6991i).
REAL ESTATE - all right, title and interest (whether as owner,
lessor or lessee) in any real Property or any buildings, structures,
parking areas or other improvements thereon.
REFINANCING CONDITIONS - the following conditions for Refinancing
Debt: (a) it is in an aggregate principal amount that does not exceed the
principal amount of the Debt being extended, renewed or refinanced; (b) it
has a final maturity no sooner than, a weighted average life no less than,
and an interest rate no greater than, the Debt being extended, renewed or
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refinanced; (c) it is subordinated to the Obligations at least to the same
extent as the Debt being extended, renewed or refinanced; (d) the
representations, covenants and defaults applicable to it are no less
favorable to Borrowers than those applicable to the Debt being extended,
renewed or refinanced; (e) no additional Lien is granted to secure it; (f)
no additional Person is obligated on such Debt; and (g) upon giving effect
to it, no Default or Event of Default exists.
REFINANCING DEBT - Borrowed Money that is the result of an
extension, renewal or refinancing of Debt permitted under SECTION
10.2.1(B), (C), (D), (F) or (I).
REIMBURSEMENT DATE - as defined in SECTION 2.3.2.
RELATED REAL ESTATE DOCUMENTS - with respect to any Real Estate
subject to a Mortgage, the following, in form and substance satisfactory
to Agent and received by Agent for review at least 15 days prior to the
effective date of the Mortgage: (a) a mortgagee title policy (or binder
therefor) covering Agent's interest under the Mortgage, in a form and
amount and by an insurer acceptable to Agent, which must be fully paid on
such effective date; (b) such assignments of leases, estoppel letters,
attornment agreements, consents, waivers and releases as Agent may require
with respect to other Persons having an interest in the Real Estate; (c) a
current, as-built survey of the Real Estate, containing a metes-and-bounds
property description and flood plain certification, and certified by a
licensed surveyor acceptable to Agent; (d) flood insurance in an amount,
with endorsements and by an insurer acceptable to Agent, if the Real
Estate is within a flood plain; (e) a current appraisal of the Real
Estate, prepared by an appraiser acceptable to Agent, and in form and
substance satisfactory to Required Lenders; (f) an environmental
assessment, prepared by environmental engineers acceptable to Agent, and
accompanied by such reports, certificates, studies or data as Agent may
reasonably require, which shall all be in form and substance satisfactory
to Required Lenders; and (g) an Environmental Agreement and such other
documents, instruments or agreements as Agent may reasonably require with
respect to any environmental risks regarding the Real Estate.
RENT AND CHARGES RESERVE - the aggregate of (a) all past due rent
and other amounts owing by an Obligor to any landlord, warehouseman,
processor, repairman, mechanic, shipper, freight forwarder or other Person
who possesses any Collateral or could assert a Lien on any Collateral; and
(b) a reserve at least equal to three months rent and other charges that
could be payable to any such Person, unless it has executed a Lien Waiver.
REPORT - as defined in SECTION 12.2.3.
REPORTABLE EVENT - any event set forth in Section 4043(b) of ERISA.
REQUIRED LENDERS - Lenders (subject to SECTION 4.2) having (a)
Revolver Commitments and Term Loans in excess of 50% of the aggregate
Revolver Commitments and Term Loans; and (b) if the Revolver Commitments
have terminated, Loans in excess of 50% of all outstanding Loans.
RESERVE PERCENTAGE - the reserve percentage (expressed as a decimal,
rounded upward to the nearest 1/8th of 1%) applicable to member banks
under regulations issued from time to time by the Board of Governors for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
RESET DATE - as defined in SECTION 5.11.1.
RESTRICTED INVESTMENT - any Investment by a Borrower or Subsidiary,
other than (a) Investments in Subsidiaries to the extent existing on the
Closing Date; (b) Cash Equivalents that are subject to Agent's Lien and
control, pursuant to documentation in form and substance satisfactory to
Agent; and (c) loans and advances permitted under SECTION 10.2.8.
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RESTRICTIVE AGREEMENT - an agreement (other than a Loan Document)
that conditions or restricts the right of any Borrower, Subsidiary or
other Obligor to incur or repay Borrowed Money, to grant Liens on any
assets, to declare or make Distributions, to modify, extend or renew any
agreement evidencing Borrowed Money, or to repay any intercompany Debt.
REVOLVER COMMITMENT - for any Lender, its obligation to make
Revolver Loans and to participate in LC Obligations up to the maximum
principal amount shown on SCHEDULE 1.1, or as specified hereafter in the
most recent Assignment and Acceptance to which it is a party. "REVOLVER
COMMITMENTS" means the aggregate amount of such commitments of all
Lenders.
REVOLVER LOAN - a loan made pursuant to SECTION 2.1, and any
Swingline Loan, Overadvance Loan or Protective Advance.
REVOLVER NOTE - a promissory note to be executed by Borrowers in
favor of a Lender in the form of EXHIBIT A, which shall be in the amount
of such Lender's Revolver Commitment and shall evidence the Revolver Loans
made by such Lender.
REVOLVER TERMINATION DATE - November 8, 2011.
ROYALTIES - all royalties, fees, expense reimbursement and other
amounts payable by a Borrower under a License.
S&P - Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
SECURED PARTIES - Agent, Issuing Bank, Lenders and providers of Bank
Products.
SECURITY DOCUMENTS - the Guaranties, Mortgages, Patent Assignments,
Trademark Security Agreements, Insurance Assignments, Deposit Account
Control Agreements, and all other documents, instruments and agreements
now or hereafter securing (or given with the intent to secure) any
Obligations.
SELECT FOREIGN JURISDICTION - Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Iceland, Ireland, Italy, Japan, the Netherlands,
Portugal, South Korea, Spain, Sweden and Switzerland.
SELLERS - jointly, Southern Saw Holdings, Inc., a Georgia
corporation, and Southern Saw Service, L.P., a Georgia limited
partnership.
SELLERS' ADJUSTED EBITDA - determined on a consolidated basis for
Sellers on the same basis as provided for the determination of Borrowers'
and Subsidiaries' "EBITDA" in the definition thereof, as adjusted to add
back to Sellers' EBITDA such amount, if any, approved by Agent in its
discretion, that represents expenses of Seller that are verified as
expenses not being incurred by a Borrower after the Asset Purchase
closing.
SENIOR OFFICER - the chairman of the board, president, chief
executive officer or chief financial officer of a Borrower or, if the
context requires, an Obligor.
SETTLEMENT REPORT - a report delivered by Agent to Lenders
summarizing the Revolver Loans and participations in LC Obligations
outstanding as of a given settlement date, allocated to Lenders on a Pro
Rata basis in accordance with their Revolver Commitments.
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SOFTWARE - as defined in the UCC.
SOLVENT - as to any Person, such Person (a) owns Property whose fair
salable value is greater than the amount required to pay all of its debts
(including contingent, subordinated, unmatured and unliquidated
liabilities); (b) owns Property whose present fair salable value (as
defined below) is greater than the probable total liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of such
Person as they become absolute and matured; (c) is able to pay all of its
debts as they mature; (d) has capital that is not unreasonably small for
its business and is sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage; (e) is
not "insolvent" within the meaning of Section 101(32) of the Bankruptcy
Code; and (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual
intent to hinder, delay or defraud either present or future creditors of
such Person or any of its Affiliates. "FAIR SALABLE VALUE" means the
amount that could be obtained for assets within a reasonable time, either
through collection or through sale under ordinary selling conditions by a
capable and diligent seller to an interested buyer who is willing (but
under no compulsion) to purchase.
STATUTORY RESERVES - the percentage (expressed as a decimal)
established by the Board of Governors as the then stated maximum rate for
all reserves (including those imposed by Regulation D of the Board of
Governors, all basic, emergency, supplemental or other marginal reserve
requirements, and any transitional adjustments or other scheduled changes
in reserve requirements) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency Liabilities (or any successor
category of liabilities under Regulation D).
SUBORDINATED DEBT - Debt incurred by a Borrower that is expressly
subordinate and junior in right of payment to Full Payment of all
Obligations, and is on terms (including maturity, interest, fees,
repayment, covenants and subordination) satisfactory to Agent.
SUBSIDIARY - any entity at least 50% of whose voting securities or
Equity Interests is owned by a Borrower or any combination of Borrowers
(including indirect ownership by a Borrower through other entities in
which the Borrower directly or indirectly owns 50% of the voting
securities or Equity Interests).
SUPPORTING OBLIGATION - as defined in the UCC.
SWINGLINE LOAN - any Borrowing of Base Rate Revolver Loans funded
with Agent's funds, until such Borrowing is settled among Lenders pursuant
to SECTION 4.1.3.
TAXES - any taxes, levies, imposts, duties, fees, assessments,
deductions, withholdings or other charges of whatever nature, including
income, receipts, excise, property, sales, use, transfer, license,
payroll, withholding, social security, franchise, intangibles, stamp or
recording taxes imposed by any Governmental Authority, and all interest,
penalties and similar liabilities relating thereto.
TERM LOAN - a loan made pursuant to SECTION 2.2.
TERM LOAN COMMITMENT - for any Lender, the obligation of such Lender
to make a Term Loan hereunder, up to the principal amount shown on
SCHEDULE 1.1. "TERM LOAN COMMITMENTS" means the aggregate amount of such
commitments of all Lenders.
TERM LOAN MATURITY DATE - November 8, 2011.
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TERM NOTE - a promissory note to be executed by Borrowers in favor
of a Lender in the form of EXHIBIT B, which shall be in the amount of such
Lender's Term Loan Commitment and shall evidence the Term Loan made by
such Lender.
TRADEMARK SECURITY AGREEMENT - each trademark security agreement
pursuant to which an Obligor grants to Agent, for the benefit of Secured
Parties, a Lien on such Obligor's interests in trademarks, as security for
the Obligations.
TRANSFEREE - any actual or potential Eligible Assignee, Participant
or other Person acquiring an interest in any Obligations.
TYPE - any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that
has the same interest option and, in the case of LIBOR Loans, the same
Interest Period.
UCC - the Uniform Commercial Code as in effect in the State of
Georgia or, when the laws of any other jurisdiction govern the perfection
or enforcement of any Lien, the Uniform Commercial Code of such
jurisdiction.
UNFUNDED FOREIGN CURRENCY LOAN PARTICIPATION - means, in respect of
any Participating Foreign Currency Lender's Foreign Currency Loan
Participation in a Foreign Currency Loan of Bank of America, the
outstanding principal amount of such Foreign Currency Loan Participation
MINUS the amount of such Participating Foreign Currency Lender's Funded
Foreign Currency Loan Participation in such Foreign Currency Loan.
UPSTREAM PAYMENT - a Distribution by a Subsidiary of a Borrower to
such Borrower.
U.S. BORROWER - Bairnco, ▇▇▇▇▇ and Kasco.
U.S. SUBSIDIARY - a Subsidiary of a Borrower that is organized under
the laws of a state of the United States or of the District of Columbia.
VALUE - (a) for Inventory, its value determined on the basis of the
lower of cost or market, calculated on a first-in, first-out basis; and
(b) for an Account, its face amount, net of any returns, rebates,
discounts (calculated on the shortest terms), credits, allowances or Taxes
(including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person; PROVIDED THAT Value of
Eligible Inventory shall not include any write-up or write-down in value
with respect to currency exchange rates.
1.2. ACCOUNTING TERMS. Under the Loan Documents (except as otherwise
specified herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers' certified
public accountants concur in such change, the change is disclosed to Agent, and
SECTION 10.3 is amended in a manner satisfactory to Required Lenders to take
into account the effects of the change.
1.3. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof,"
"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, "from" means "from and including,"
and "to" and "until" each mean "to but excluding." The terms "including" and
"include" shall mean "including, without limitation" and, for purposes of each
Loan Document, the parties agree that the rule of EJUSDEM GENERIS shall not be
applicable to limit any provision. Section titles appear as a matter of
convenience only and shall not affect the interpretation of any Loan Document.
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All references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any document,
instrument or agreement include any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted by the Loan Documents); (c) any
section mean, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules mean, unless the context otherwise
requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day
mean time of day at Agent's notice address under SECTION 14.3.1; or (g)
discretion of Agent, Issuing Bank or any Lender mean the sole and absolute
discretion of such Person. All calculations of Value, fundings of Loans,
issuances of Letters of Credit and payments of Obligations shall be in Dollars
and, unless the context otherwise requires, all determinations (including
calculations of Borrowing Base and financial covenants) made from time to time
under the Loan Documents shall be made in light of the circumstances existing at
such time. Borrowing Base calculations shall be consistent with historical
methods of valuation and calculation, and otherwise satisfactory to Agent (and
not necessarily calculated in accordance with GAAP). Borrowers shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent, Issuing Bank or any Lender under any Loan Documents. No provision of
any Loan Documents shall be construed against any party by reason of such party
having, or being deemed to have, drafted the provision. Whenever the phrase "to
the best of Borrowers' knowledge" or words of similar import are used in any
Loan Documents, it means actual knowledge of a Senior Officer, or knowledge that
a Senior Officer would have obtained if he or she had engaged in good faith and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.
SECTION 2. CREDIT FACILITIES
2.1. REVOLVER COMMITMENT.
2.1.1. REVOLVER LOANS. Each Lender agrees, severally on a Pro Rata
basis up to its Revolver Commitment, on the terms set forth herein, to make
Revolver Loans to Borrowers from time to time through the Commitment Termination
Date on the terms and subject to the conditions set forth herein. The Revolver
Loans may be repaid and reborrowed as provided herein. In no event shall Lenders
have any obligation to honor a request for a Revolver Loan if the unpaid balance
of Revolver Loans outstanding at such time (including the requested Loan) would
exceed the Borrowing Base. Base Rate Loans shall be made only to U.S. Borrowers
and shall be denominated only in Dollars. Foreign Currency Loans shall only be
made or continued as LIBOR Loans and not as Base Rate Loans. Each of the Foreign
Currency Borrowers may receive Revolver Loans for its account on the terms and
conditions set forth in this Agreement but only Revolver Loans that are Foreign
Currency Loans denominated in the respective Foreign Currency of such Foreign
Currency Borrower, and only to the extent that such Foreign Currency Loans, when
added to all other Foreign Currency Loans outstanding, do not exceed the Foreign
Currency Sublimit. Notwithstanding anything to the contrary contained herein, in
no event shall any Borrower be entitled to receive a Revolver Loan if at the
time of the proposed funding of such Revolver Loan (and after giving effect
thereto and all pending requests for Revolver Loans), the aggregate amount of
such outstanding and requested Revolver Loans PLUS the LC Obligations on such
date exceeds (or would exceed) the aggregate amount of the Revolver Commitments.
2.1.2. REVOLVER NOTES. The Revolver Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of Agent and such
Lender. At the request of any Lender, Borrowers shall deliver a Revolver Note to
such Lender.
2.1.3. USE OF PROCEEDS. The proceeds of Revolver Loans shall be used
by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and
transaction expenses associated with the closing of this credit facility; (c) to
pay Obligations in accordance with this Agreement; and (d) for working capital
and other lawful corporate purposes of Borrowers. None of the proceeds of the
Loans will be used directly or indirectly to fund a personal loan to or for the
benefit of a director or executive officer of a Borrower or a Guarantor, or
otherwise used for any purpose that is prohibited by Applicable Law.
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2.1.4. VOLUNTARY REDUCTION OR TERMINATION OF REVOLVER COMMITMENTS.
(a) The Revolver Commitments shall terminate on the Revolver
Termination Date, unless sooner terminated in accordance with this Agreement.
Upon at least 30 days prior written notice to Agent, Borrowers may, at their
option, terminate the Revolver Commitments and this credit facility. Any notice
of termination given by Borrowers shall be irrevocable. On the termination date,
Borrowers shall make Full Payment of all Obligations.
(b) Borrowers may permanently reduce the Revolver Commitments, on a
Pro Rata basis for each Lender, from time to time upon written notice to Agent,
which notice shall specify the amount of the reduction, shall be irrevocable
once given, shall be given at least five Business Days prior to the end of a
month and shall be effective as of the first day of the next month. Each
reduction shall be in a minimum amount of $1,000,000, or an increment of
$1,000,000 in excess thereof.
(c) Concurrently with any termination of the Revolver Commitments by
Borrowers, for whatever reason (other than as a condition to a refinancing of
the credit facilities hereunder by Bank of America) at any time before the last
day of the calendar month that is 36 calendar months after the Closing Date,
Borrowers shall pay to Agent, for its own account, and as liquidated damages for
loss of bargain (and not as a penalty), an amount equal to the Initial Real
Estate Assessment Costs MULTIPLIED BY (i) the number of calendar months
remaining in such 36 month period, DIVIDED BY (ii) 36.
2.1.5. OVERADVANCES. If the aggregate Revolver Loans exceed the
Borrowing Base ("OVERADVANCE") or the aggregate Revolver Commitments at any
time, the excess amount shall be payable by Borrowers ON DEMAND by Agent, but
all such Revolver Loans shall nevertheless constitute Obligations secured by the
Collateral and entitled to all benefits of the Loan Documents. Unless its
authority has been revoked in writing by Required Lenders, Agent may require
Lenders to honor requests for Overadvance Loans and to forbear from requiring
Borrowers to cure an Overadvance, (a) when no other Event of Default is known to
Agent, as long as (i) the Overadvance does not continue for more than 30
consecutive days (and no Overadvance may exist for at least five consecutive
days thereafter before further Overadvance Loans are required), and (ii) the
Overadvance is not known by Agent to exceed 10% of the Borrowing Base; and (b)
regardless of whether an Event of Default exists, if Agent discovers an
Overadvance not previously known by it to exist, as long as from the date of
such discovery the Overadvance (i) is not increased by more than $2,000,000, and
(ii) does not continue for more than 30 consecutive days. In no event shall
Overadvance Loans be required that would cause the outstanding Revolver Loans
and LC Obligations to exceed the aggregate Revolver Commitments. Any funding of
an Overadvance Loan or sufferance of an Overadvance shall not constitute a
waiver by Agent or Lenders of the Event of Default caused thereby. In no event
shall any Borrower or other Obligor be deemed a beneficiary of this Section nor
authorized to enforce any of its terms.
2.1.6. PROTECTIVE ADVANCES. Agent shall be authorized, in its
discretion, at any time that a Default or Event of Default exists or any
conditions in SECTION 6 are not satisfied, and without regard to the aggregate
Commitments, to make Base Rate Revolver Loans ("PROTECTIVE ADVANCES") (a) up to
an aggregate amount of $2,500,000 outstanding at any time, if Agent deems such
Loans necessary or desirable to preserve or protect any Collateral, or to
enhance the collectibility or repayment of Obligations; or (b) to pay any other
amounts chargeable to Obligors under any Loan Documents, including costs, fees
and expenses. All Protective Advances shall be Obligations, secured by the
Collateral, and shall be treated for all purposes as Extraordinary Expenses.
Each Lender shall participate in each Protective Advance on a Pro Rata basis.
Required Lenders may at any time revoke Agent's authorization to make further
Protective Advances by written notice to Agent. Absent such revocation, Agent's
determination that funding of a Protective Advance is appropriate shall be
conclusive.
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2.2. TERM LOAN COMMITMENT.
2.2.1. TERM LOANS. Each Lender agrees, severally on a Pro Rata basis
up to its Term Loan Commitment, on the terms set forth herein, to make a Term
Loan to U.S. Borrowers. The Term Loans shall be funded by Lenders on the Closing
Date. The Term Loan Commitment of each Lender shall expire upon the funding by
Lenders of the Term Loans. Once repaid, whether such repayment is voluntary or
required, Term Loans may not be reborrowed.
2.2.2. TERM NOTES. The Term Loan made by each Lender and interest
accruing thereon shall be evidenced by the records of Agent and such Lender. At
the request of any Lender, U.S. Borrowers shall deliver a Term Note to such
Lender.
2.3. LETTER OF CREDIT FACILITY.
2.3.1. ISSUANCE OF LETTERS OF CREDIT. Issuing Bank agrees to issue
Letters of Credit from time to time until 30 days prior to the Revolver
Termination Date (or until the Commitment Termination Date, if earlier), on the
terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank's willingness to
issue any Letter of Credit is conditioned upon Issuing Bank's receipt of a LC
Application with respect to the requested Letter of Credit, as well as such
other instruments and agreements as Issuing Bank may customarily require for
issuance of a letter of credit of similar type and amount. Issuing Bank shall
have no obligation to issue any Letter of Credit unless (i) Issuing Bank
receives a LC Request and LC Application at least three Business Days prior to
the requested date of issuance; and (ii) each LC Condition is satisfied. If
Issuing Bank receives written notice from a Lender at least one Business Day
before issuance of a Letter of Credit that any LC Condition has not been
satisfied, Issuing Bank shall have no obligation to issue the requested Letter
of Credit (or any other) until such notice is withdrawn in writing by that
Lender or until Required Lenders have waived such condition in accordance with
this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be
deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a U.S. Borrower only (i)
to support obligations of such Borrower incurred in the Ordinary Course of
Business; or (ii) for other purposes as Agent and Lenders may approve from time
to time in writing. The renewal or extension of any Letter of Credit shall be
treated as the issuance of a new Letter of Credit, except that delivery of a new
LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of
any Letter of Credit by the beneficiary. In connection with issuance of any
Letter of Credit, no Credit Party shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of any goods
purported to be represented by any Documents; any differences or variation in
the character, quality, quantity, condition, packing, value or delivery of any
goods from that expressed in any Documents; the form, validity, sufficiency,
accuracy, genuineness or legal effect of any Documents or of any endorsements
thereon; the time, place, manner or order in which shipment of goods is made;
partial or incomplete shipment of, or failure to ship, any goods referred to in
a Letter of Credit or Documents; any deviation from instructions, delay, default
or fraud by any shipper or other Person in connection with any goods, shipment
or delivery; any breach of contract between a shipper or vendor and a Borrower;
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or
otherwise; errors in interpretation of technical terms; the misapplication by a
beneficiary of any Letter of Credit or the proceeds thereof; or any consequences
arising from causes beyond the control of any Credit Party, including any act or
omission of a Governmental Authority. The rights and remedies of Issuing Bank
under the Loan Documents shall be cumulative. Issuing Bank shall be fully
subrogated to the rights and remedies of each beneficiary whose claims against
Borrowers are discharged with proceeds of any Letter of Credit.
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(d) In connection with its administration of and enforcement of
rights or remedies under any Letters of Credit or LC Documents, Issuing Bank
shall be entitled to act, and shall be fully protected in acting, upon any
certification, notice or other communication in whatever form believed by
Issuing Bank, in good faith, to be genuine and correct and to have been signed,
sent or made by a proper Person. Issuing Bank may consult with and employ legal
counsel, accountants and other experts to advise it concerning its obligations,
rights and remedies, 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. Issuing Bank may employ agents and attorneys-in-fact in connection
with any matter relating to Letters of Credit or LC Documents, and shall not be
liable for the negligence or misconduct of any such agents or attorneys-in-fact
selected with reasonable care.
2.3.2. REIMBURSEMENT; PARTICIPATIONS.
(a) If Issuing Bank honors any request for payment under a Letter of
Credit, U.S. Borrowers shall pay to Issuing Bank, on the same day
("REIMBURSEMENT DATE"), the amount paid by Issuing Bank under such Letter of
Credit, together with interest at the interest rate for Base Rate Revolver Loans
from the Reimbursement Date until payment by Borrowers. The obligation of
Borrowers to reimburse Issuing Bank for any payment made under a Letter of
Credit shall be absolute, unconditional, irrevocable, and joint and several, and
shall be paid without regard to any lack of validity or enforceability of any
Letter of Credit or the existence of any claim, setoff, defense or other right
that Borrowers may have at any time against the beneficiary. Whether or not
Borrower Agent submits a Notice of Borrowing, U.S. Borrowers shall be deemed to
have requested a Borrowing of Base Rate Revolver Loans in an amount necessary to
pay all amounts due Issuing Bank on any Reimbursement Date and each Lender
agrees to fund its Pro Rata share of such Borrowing whether or not the
Commitments have terminated, an Overadvance exists or is created thereby, or the
conditions in SECTION 6 are satisfied.
(b) Upon issuance of a Letter of Credit, each Lender shall be deemed
to have irrevocably and unconditionally purchased from Issuing Bank, without
recourse or warranty, an undivided Pro Rata interest and participation in all LC
Obligations relating to the Letter of Credit. If Issuing Bank makes any payment
under a Letter of Credit and U.S. Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender's Pro Rata share of such payment. Upon
request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit
and LC Documents in its possession at such time.
(c) The obligation of each Lender to make payments to Agent for the
account of Issuing Bank in connection with Issuing Bank's payment under a Letter
of Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; 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; or the
existence of any setoff or defense that any Obligor may have with respect to any
Obligations. Issuing Bank does not assume any responsibility for any failure or
delay in performance or any breach by any Borrower or other Person of any
obligations under any LC Documents. Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor. Issuing Bank shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectibility, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.
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(d) No Issuing Bank Indemnitee shall be liable to any Lender or
other Person for any action taken or omitted to be taken in connection with any
LC Documents except as a result of its actual gross negligence or willful
misconduct. Issuing Bank shall not have any liability to any Lender if Issuing
Bank refrains from any action under any Letter of Credit or LC Documents until
it receives written instructions from Required Lenders.
2.3.3. CASH COLLATERAL. If any LC Obligations, whether or not then
due or payable, shall for any reason be outstanding at any time (a) that an
Event of Default exists, (b) that Availability is less than zero, (c) after the
Commitment Termination Date, or (d) within 20 Business Days prior to the
Revolver Termination Date, then U.S. Borrowers shall, at Issuing Bank's or
Agent's request, pay to Issuing Bank the amount of all outstanding LC
Obligations and Cash Collateralize all outstanding Letters of Credit. If U.S.
Borrowers fail to Cash Collateralize outstanding Letters of Credit as required
herein, Lenders may (and shall upon direction of Agent) advance, as Revolver
Loans, the amount of the Cash Collateral required (whether or not the
Commitments have terminated, an Overadvance exists, or the conditions in SECTION
6 are satisfied).
2.3.4. EXISTING LETTERS OF CREDIT. As of the Closing Date, there
exist certain letters of credit issued by Issuing Bank for the account of one or
more of the U.S. Borrowers more fully described on SCHEDULE 2.3.4 attached
hereto (collectively, the "Existing Letters of Credit"). The parties hereto
acknowledge and agree that, on and as of the Closing Date, such Existing Letters
of Credit shall constitute Letters of Credit hereunder for all purposes as fully
as if such Existing Letters of Credit had been issued as Letters of Credit
hereunder.
2.4. FOREIGN CURRENCY LOANS; INTRA-LENDER ISSUES.
2.4.1. FOREIGN CURRENCY LOAN PARTICIPATIONS. Notwithstanding
anything to the contrary contained herein, at the option of Agent, in its
discretion, all Foreign Currency Loans shall be made solely by Bank of America.
Each Lender that does not make such Foreign Currency Loan (in each case, a
"Participating Foreign Currency Lender"), shall irrevocably and unconditionally
purchase and acquire and shall be deemed to irrevocably and unconditionally
purchase and acquire from Bank of America, and Bank of America shall sell and be
deemed to sell to each such Participating Foreign Currency Lender, without
recourse or any representation or warranty whatsoever, an undivided interest and
participation (a "Foreign Currency Loan Participation") in each Foreign Currency
Loan funded by Bank of America in an amount equal to such Participating Foreign
Currency Lender's Pro Rata share of the Borrowing that includes such Foreign
Currency Loan. Such purchase and sale of a Foreign Currency Loan Participation
shall be deemed to occur automatically upon the making of a Foreign Currency
Loan by Bank of America, without any further notice to any Participating Foreign
Currency Lender. The purchase price payable by each Participating Foreign
Currency Lender to Bank of America for each Foreign Currency Loan Participation
purchased by it from Bank of America shall be equal to 100% of the principal
amount of such Foreign Currency Loan Participation (i.e., the product of (i) the
amount of the Borrowing that includes the relevant Foreign Currency Loan and
(ii) such Participating Foreign Currency Lender's Pro Rata Share), and such
purchase price shall be payable by each Participating Foreign Currency Lender to
Bank of America in accordance with the settlement procedure set forth in SECTION
2.4.2 below. Bank of America and Agent shall record on their books the amount of
the Foreign Currency Loans made by Bank of America and each Participating
Foreign Currency Lender's Foreign Currency Loan Participation therein, all
payments in respect thereof and interest accrued thereon and all payments made
by and to each Participating Foreign Currency Lender pursuant to this SECTION
2.4.
2.4.2. SETTLEMENT PROCEDURES FOR FOREIGN CURRENCY LOAN
PARTICIPATIONS. Each Participating Foreign Currency Lender's Foreign Currency
Loan Participation in the Foreign Currency Loans (other than Agent Advances)
shall be in an amount equal to its Pro Rata share of all such Foreign Currency
Loans. However, in order to facilitate the administration of the Foreign
Currency Loans made by Bank of America and the Foreign Currency Loan
Participations, settlement among Bank of America and the Participating Foreign
Currency Lenders with regard to the Participating Foreign Currency Lenders'
Foreign Currency Loan Participations shall take place in accordance with the
following provisions:
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(i) Bank of America and the Participating Foreign Currency
Lenders shall settle (a "Foreign Currency Loan Participation Settlement")
by payments in respect of the Foreign Currency Loan Participations as
follows: So long as any Foreign Currency Loans are outstanding, Foreign
Currency Loan Participation Settlements shall be effected through Agent on
such Business Days as Agent shall specify by a notice by telecopy,
telephone or similar form of notice to each Participating Foreign Currency
Lender requesting such Foreign Currency Loan Participation Settlement
(each such date on which a Foreign Currency Loan Participation Settlement
occurs herein called a "Foreign Currency Loan Participation Settlement
Date"), such notice to be delivered no later than 2:00 p.m. at least one
Business Day prior to the requested Foreign Currency Loan Participation
Settlement Date; provided, that Agent shall have the option but not the
obligation to specify a Foreign Currency Loan Participation Settlement
Date. If on any Foreign Currency Loan Participation Settlement Date the
total principal amount of the Foreign Currency Loans made or deemed made
by Bank of America during the period ending on (but excluding) such
Foreign Currency Loan Settlement Date and commencing on (and including)
the immediately preceding Foreign Currency Loan Participation Settlement
Date (or the Closing Date in the case of the period ending on the first
Foreign Currency Loan Participation Settlement Date) (each such period
herein called a "Foreign Currency Loan Participation Settlement Period")
is greater than the principal amount of Foreign Currency Loans repaid
during such Foreign Currency Loan Participation Settlement Period to Bank
of America, each Participating Foreign Currency Lender shall pay to Bank
of America (through Agent), no later than 2:00 p.m. on such Foreign
Currency Loan Participation Settlement Date, an amount equal to such
Participating Foreign Currency Lender's Pro Rata share of the amount of
such excess. If in any Foreign Currency Loan Participation Settlement
Period the outstanding principal amount of the Foreign Currency Loans
repaid to Bank of America in such period exceeds the total principal
amount of the Foreign Currency Loans made or deemed made by Bank of
America during such period, Bank of America shall pay to each
Participating Foreign Currency Lender (through Agent) on such Foreign
Currency Loan Participation Settlement Date an amount equal to such
Participating Foreign Currency Lender's Pro Rata share of such excess.
Foreign Currency Loan Participation Settlements in respect of Foreign
Currency Loans shall be made in the applicable Foreign Currency on the
Foreign Currency Loan Participation Settlement Date for such Foreign
Currency Loans.
(ii) If any Participating Foreign Currency Lender fails to pay
to Bank of America on any Foreign Currency Loan Participation Settlement
Date the full amount required to be paid by such Participating Foreign
Currency Lender to Bank of America on such Foreign Currency Loan
Participation Settlement Date in respect of such Participating Foreign
Currency Lender's Foreign Currency Loan Participation (such Participating
Foreign Currency Lender's "Foreign Currency Loan Participation Settlement
Amount") with Bank of America, Bank of America shall be entitled to
recover such unpaid amount from such Participating Foreign Currency
Lender, together with interest thereon (in the same respective currency or
currencies as the relevant Foreign Currency Loans) at the LIBOR Rate
applicable to Revolver Loans with respect to Foreign Currency Loans.
Without limiting Bank of America's rights to recover from any
Participating Foreign Currency Lender any unpaid Foreign Currency Loan
Participation Settlement Amount payable by such Participating Foreign
Currency Lender to Bank of America, Agent shall also be entitled to
withhold from amounts otherwise payable to such Participating Foreign
Currency Lender an amount equal to such Participating Foreign Currency
Lender's unpaid Foreign Currency Loan Participation Settlement Amount
owing to Bank of America and apply such withheld amount to the payment of
any unpaid Foreign Currency Loan Participation Settlement Amount owing by
such Participating Foreign Currency Lender to Bank of America.
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2.4.3. OBLIGATIONS IRREVOCABLE. The obligations of each
Participating Foreign Currency Lender to purchase from Bank of America a
participation in each Foreign Currency Loan made by Bank of America and to make
payments to Bank of America with respect to such participation and to make
payments to Bank of America with respect to Letters of Credit denominated in
Foreign Currency Loan, and related LC Support, in each case as provided herein,
shall be irrevocable and not subject to any qualification or exception
whatsoever, including any of the following circumstances: (i) any lack of
validity or enforceability of this Agreement or any of the other Loan Documents
or of any Revolver Loans, against any Borrower or any Guarantor; (ii) the
existence of any claim, setoff, defense or other right which any Borrower or any
Guarantor may have at any time in respect of any Foreign Currency Loans or
Letters of Credit denominated in Foreign Currency Loan; (iii) any application or
misapplication of any proceeds of any Foreign Currency Loans; (iv) the surrender
or impairment of any security for any Foreign Currency Loans; (v) the occurrence
of any Default or Event of Default; (vi) the commencement or pendency of any
Insolvency Proceeding in respect of any Obligor; or (vii) the failure to satisfy
the applicable conditions precedent set forth in SECTION 6 hereof.
2.4.4. RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any payment
by or on behalf of any Borrower or any other Obligor received by Agent with
respect to any Foreign Currency Loan made by Bank of America is thereafter set
aside, avoided or recovered from Agent in connection with any Insolvency
Proceeding or due to any mistake of law or fact, each Participating Foreign
Currency Lender shall, upon demand by Agent, pay to Bank of America (through
Agent) such Participating Foreign Currency Lender's Pro Rata share of such
amount set aside, avoided or recovered, together with interest at the rate and
in the currency required to be paid by Bank of America or Agent upon the amount
required to be repaid by it.
2.4.5. INDEMNIFICATION BY LENDERS. Each Participating Foreign
Currency Lender agrees to indemnify Bank of America (to the extent not
reimbursed by the Borrowers and without limiting the obligations of the
Borrowers hereunder or under any other Loan Document) ratably for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees) or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against Bank
of America in any way relating to or arising out of any Foreign Currency Loans
or any participations by Bank of America in any Letters of Credit denominated in
Foreign Currency Loan or related LC Support or any action taken or omitted by
Bank of America in connection therewith; provided that no Participating Foreign
Currency Lender shall be liable for any of the foregoing to the extent it arises
from the gross negligence or willful misconduct of Bank of America. Without
limiting the foregoing, each Participating Foreign Currency Lender agrees to
reimburse Bank of America promptly upon demand for such Participating Foreign
Currency Lender's Pro Rata share of any costs or expenses payable by the
Borrowers to Bank of America in respect of the Foreign Currency Loans to the
extent that Bank of America is not promptly reimbursed for such costs and
expenses by the Borrowers. The agreement contained in this SECTION 2.4.5 shall
survive payment in full of all Foreign Currency Loans.
2.4.6. FOREIGN CURRENCY LOAN PARTICIPATION FEE. In consideration for
each Participating Foreign Currency Lender's participation in the Foreign
Currency Loans made by Bank of America, Bank of America agrees to pay to Agent
for the account of each Participating Foreign Currency Lender, as and when Bank
of America receives payment of interest on its Foreign Currency Loans, a fee
(the "Foreign Currency Loan Participation Fee") at a rate per annum equal to the
Applicable Margin on such Foreign Currency Loans minus 0.25% on the Unfunded
Foreign Currency Loan Participation of such Participating Foreign Currency
Lender in such Foreign Currency Loans of Bank of America. The Foreign Currency
Loan Participation Fee in respect of any Unfunded Foreign Currency Loan
Participation in a Foreign Currency Loan shall be payable to Agent when interest
on such Foreign Currency Loan is received by Bank of America. If Bank of America
does not receive payment in full of such interest, the Foreign Currency Loan
Participation Fee in respect of the Unfunded Foreign Currency Loan Participation
in such Foreign Currency Loans shall be reduced proportionately.
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SECTION 3. INTEREST, FEES AND CHARGES
3.1. INTEREST.
3.1.1. RATES AND PAYMENT OF INTEREST.
(a) The Obligations shall bear interest (i) if a Base Rate Loan, at
the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a
LIBOR Loan, at Adjusted LIBOR for the applicable Interest Period, plus the
Applicable Margin; and (iii) if any other Obligation (including, to the extent
permitted by law, interest not paid when due), at the Base Rate in effect from
time to time, plus the Applicable Margin for Base Rate Revolver Loans. Interest
shall accrue from the date the Loan is advanced or the Obligation is incurred or
payable, until paid by Borrowers. If a Loan is repaid on the same day made, one
day's interest shall accrue. The Base Rate on the date hereof is 8.25% per annum
and, therefore, the rate of interest in effect on the date hereof, expressed in
simple interest terms, is 8.25% per annum for Base Rate Revolver Loans and 8.25%
per annum for Term Loans constituting Base Rate Loans.
(b) During an Insolvency Proceeding with respect to any Borrower, or
during any other Event of Default if Agent or Required Lenders in their
discretion so elect, Obligations shall bear interest at the Default Rate. Each
Borrower acknowledges that the cost and expense to Agent and each Lender due to
an Event of Default are difficult to ascertain and that the Default Rate is a
fair and reasonable estimate to compensate Agent and Lenders for such added cost
and expense.
(c) Interest accrued on the Loans shall be due and payable in
arrears, (i) on the first day of each calendar quarter and, for any LIBOR Loan,
the last day of its Interest Period; (ii) on any date of prepayment, with
respect to the principal amount of Loans being prepaid; and (iii) on the
Commitment Termination Date. Interest accrued on any other Obligations shall be
due and payable as provided in the Loan Documents and, if no payment date is
specified, shall be due and payable ON DEMAND. Notwithstanding the foregoing,
interest accrued at the Default Rate shall be due and payable ON DEMAND.
3.1.2. APPLICATION OF ADJUSTED LIBOR TO OUTSTANDING LOANS.
(a) Subject to delivery of a Notice of Conversion/Continuation, U.S.
Borrowers may on any Business Day elect to convert any portion of the Base Rate
Loans to, or to continue any LIBOR Loan at the end of its Interest Period as, a
LIBOR Loan, and Foreign Currency Borrowers may on any Business Day elect to
continue any LIBOR Loan at the end of its Interest Period as a LIBOR Loan.
During any Default or Event of Default, Agent may (and shall at the direction of
Required Lenders) declare that no Loan may be made, converted or continued as a
LIBOR Loan; PROVIDED, HOWEVER, THAT, during any Default or Event of Default,
Agent may, in its discretion, allow the Foreign Currency Borrowers, or any of
them, to borrow or continue Foreign Currency Loans as LIBOR Loans.
(b) Whenever Borrowers desire to convert or continue Loans as LIBOR
Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no
later than 11:00 a.m. at least two Business Days before the requested conversion
or continuation date. Promptly after receiving any such notice, Agent shall
notify each Lender thereof. Each Notice of Conversion/Continuation shall be
irrevocable, and shall specify the aggregate principal amount of Loans to be
converted or continued, whether such Loans are Foreign Currency Loans (in which
case, the Foreign Currency Loans may only be continued and may not be
converted), the conversion or continuation date (which shall be a Business Day),
and the duration of the Interest Period (which shall be deemed to be one month
if not specified). In no event may a Foreign Currency Borrower convert a LIBOR
Loan to a Base Rate Loan at any time. If, upon the expiration of any Interest
Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver a
Notice of Conversion/Continuation, they shall be deemed to have elected (i) in
the case of Loans that are not Foreign Currency Loans, to convert such Loans
into Base Rate Loans, and (ii) in the case of Foreign Currency Loans, to
continue such Loans as LIBOR Loans having a one month Interest Period.
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3.1.3. INTEREST PERIODS. In connection with the making, conversion
or continuation of any LIBOR Loans, Borrowers shall select an interest period
("INTEREST PERIOD") to apply, which interest period shall be one, two, or three
or six months; PROVIDED, HOWEVER, that:
(a) the Interest Period shall commence on the date the Loan is made
or continued as, or converted into, a LIBOR Loan, and shall expire on the
numerically corresponding day in the calendar month at its end;
(b) if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding day
falls after the last Business Day of such month, then the Interest Period shall
expire on the last Business Day of such month; and if any Interest Period would
expire on a day that is not a Business Day, the period shall expire on the next
Business Day; and
(c) no Interest Period applicable to a LIBOR Term Loan may extend
beyond a date on which Borrowers are required to make a scheduled payment of
principal on such Loan; and no Interest Period shall extend beyond the Revolver
Termination Date.
3.1.4. INTEREST RATE NOT ASCERTAINABLE. If Agent shall determine
that on any date for determining Adjusted LIBOR, due to any circumstance
affecting the London interbank market, adequate and fair means do not exist for
ascertaining such rate on the basis provided herein, then Agent shall
immediately notify Borrowers of such determination. Until Agent notifies
Borrowers that such circumstance no longer exists, the obligation of Lenders to
make LIBOR Loans shall be suspended, and no further Loans may be converted into
or continued as LIBOR Loans.
3.2. FEES.
3.2.1. UNUSED LINE FEE. Borrowers shall pay to Agent, for the Pro
Rata benefit of Lenders, a fee equal to 0.15% per annum times the amount by
which the Revolver Commitments exceed the Average Revolver Loan Balance for any
calendar quarter (or portion thereof that the Borrower Commitments are in
effect). Such fee shall be payable in arrears, on the first day of each calendar
quarter and on the Commitment Termination Date.
3.2.2. LC FACILITY FEES. Borrowers shall pay (a) to Agent, for the
Pro Rata benefit of Lenders, a fee equal to the applicable Letter of Credit fee
as set out in the definition of Applicable Margin times the average daily stated
amount of Letters of Credit, which fee shall be payable quarterly in arrears, on
the first day of each calendar quarter; (b) to Agent, for its own account, a
fronting fee equal to 0.125% of the stated amount of each Letter of Credit,
which fee shall be payable upon issuance of the Letter of Credit and on each
anniversary date of such issuance, and shall be payable on any increase in
stated amount made between any such dates; and (c) to Issuing Bank, for its own
account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred. During an Event of
Default, the fee payable under clause (a) shall be increased by 2% per annum.
3.2.3. CLOSING FEE. Borrowers shall pay to Agent, for the Pro Rata
benefit of the Lenders, a closing fee of $29,750, which shall be paid
concurrently with the funding of the initial Loans hereunder.
3.3. COMPUTATION OF INTEREST, FEES, YIELD PROTECTION. All interest,
as well as fees and other charges calculated on a per annum basis, shall be
computed for the actual days elapsed, based on a year of 360 days. Each
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determination by Agent of any interest, fees or interest rate hereunder shall be
final, conclusive and binding for all purposes, absent manifest error. All fees
shall be fully earned when due and shall not be subject to rebate or refund, nor
subject to proration except as specifically provided herein. All fees payable
under SECTION 3.2 are 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. A certificate as to amounts payable by Borrowers under SECTION 3.4,
3.6, 3.7, 3.9 or 5.9, submitted to Borrowers by Agent or the affected Lender, as
applicable, shall be final, conclusive and binding for all purposes, absent
manifest error.
3.4. REIMBURSEMENT OBLIGATIONS. Borrowers shall reimburse Agent for
all Extraordinary Expenses. Borrowers shall also reimburse Agent for all legal,
accounting, appraisal, consulting, and other fees, costs and expenses incurred
by it in connection with (a) negotiation and preparation of any Loan Documents,
including any amendment or other modification thereof; (b) administration of and
actions relating to any Collateral, Loan Documents and transactions contemplated
thereby, including any actions taken to perfect or maintain priority of Agent's
Liens on any Collateral, to maintain any insurance required hereunder or to
verify Collateral; and (c) subject to the limits of SECTION 10.1.1(B), each
inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agent's personnel or a third party. All legal, accounting
and consulting fees shall be charged to Borrowers by Agent's professionals at
their full hourly rates, regardless of any reduced or alternative fee billing
arrangements that Agent, any Lender or any of their Affiliates may have with
such professionals with respect to this or any other transaction. All amounts
reimbursable by Borrowers under this Section shall constitute Obligations
secured by the Collateral and shall be payable ON DEMAND.
3.5. ILLEGALITY. Notwithstanding anything to the contrary herein, if
(a) any change in any law or interpretation thereof by any Governmental
Authority makes it unlawful for a Lender to make or maintain a LIBOR Loan or to
maintain any Commitment with respect to LIBOR Loans or (b) a Lender determines
that the making or continuance of a LIBOR Loan has become impracticable as a
result of a circumstance that adversely affects the London interbank market or
the position of such Lender in such market, then such Lender shall give notice
thereof to Agent and Borrowers and may (i) declare that LIBOR Loans will not
thereafter be made by such Lender, whereupon any request for a LIBOR Loan from
such Lender shall be deemed to be a request for a Base Rate Loan unless such
Lender's declaration has been withdrawn (and it shall be withdrawn promptly upon
cessation of the circumstances described in clause (a) or (b) above); and/or
(ii) require that all outstanding LIBOR Loans made by such Lender be converted
to Base Rate Loans immediately, in which event all outstanding LIBOR Loans of
such Lender shall be immediately converted to Base Rate Loans.
3.6. INCREASED COSTS. If, by reason of (a) the introduction of or
any change (including any change by way of imposition or increase of Statutory
Reserves or other reserve requirements) in any law or interpretation thereof, or
(b) the compliance with any guideline or request from any Governmental Authority
or other Person exercising control over banks or financial institutions
generally (whether or not having the force of law):
(i) a Lender shall be subject to any Tax with respect to any
LIBOR Loan or Letter of Credit or its obligation to make LIBOR Loans,
issue Letters of Credit or participate in LC Obligations, or a change
shall result in the basis of taxation of any payment to a Lender with
respect to its LIBOR Loans or its obligation to make LIBOR Loans, issue
Letters of Credit or participate in LC Obligations (except for Excluded
Taxes); 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, a Lender shall
be imposed or deemed applicable, or any other condition affecting a
Lender's LIBOR Loans or obligation to make LIBOR Loans, issue Letters of
Credit or participate in LC Obligations shall be imposed on such Lender or
the London interbank market;
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and as a result there shall be an increase in the cost to such Lender of
agreeing to make or making, funding or maintaining LIBOR Loans, Letters of
Credit or participations in LC Obligations (except to the extent already
included in determination of Adjusted LIBOR), or there shall be a reduction in
the amount receivable by such Lender, then the Lender shall promptly notify
Borrowers and Agent of such event, and Borrowers shall, within five days
following demand therefor, pay such Lender the amount of such increased costs or
reduced amounts.
If a Lender determines that, because of circumstances described above or
any other circumstances arising hereafter affecting such Lender, the London
interbank market or the Lender's position in such market, Adjusted LIBOR or its
Applicable Margin, as applicable, will not adequately and fairly reflect the
cost to such Lender of funding LIBOR Loans, issuing Letters of Credit or
participating in LC Obligations, then (A) the Lender shall promptly notify
Borrowers and Agent of such event; (B) such Lender's obligation to make LIBOR
Loans, issue Letters of Credit or participate in LC Obligations shall be
immediately suspended, until each condition giving rise to such suspension no
longer exists; and (C) such Lender shall make a Base Rate Loan as part of any
requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for all
purposes, be considered part of such Borrowing.
3.7. CAPITAL ADEQUACY. If a Lender determines that any introduction
of or any change in a Capital Adequacy Regulation, any change in the
interpretation or administration of a Capital Adequacy Regulation by a
Governmental Authority charged with interpretation or administration thereof, or
any compliance by such Lender or any Person controlling such Lender with a
Capital Adequacy Regulation, increases the amount of capital required or
expected to be maintained by such Lender or Person (taking into consideration
its capital adequacy policies and desired return on capital) as a consequence of
such Lender's Commitments, Loans, participations in LC Obligations or other
obligations under the Loan Documents, then Borrowers shall, within five days
following demand therefor, pay such Lender an amount sufficient to compensate
for such increase. A Lender's demand for payment shall set forth the nature of
the occurrence giving rise to such compensation and a calculation of the amount
to be paid. In determining such amount, the Lender may use any reasonable
averaging and attribution method.
3.8. MITIGATION. Each Lender agrees that, upon becoming aware that
it is subject to SECTION 3.5, 3.6, 3.7 or 5.9, it will take reasonable measures
to reduce Borrowers' obligations under such Sections, including funding or
maintaining its Commitments or Loans through another office, as long as use of
such measures would not adversely affect the Lender's Commitments, Loans,
business or interests, and would not be inconsistent with any internal policy or
applicable legal or regulatory restriction.
3.9. FUNDING LOSSES. If for any reason (other than default by a
Lender) (a) any Borrowing of, or conversion to or continuation of, a LIBOR Loan
does not occur on the date specified therefor in a Notice of Borrowing or Notice
of Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required hereunder,
then Borrowers shall pay to Agent its customary administrative charge and to
each Lender all losses and expenses that it sustains as a consequence thereof,
including any loss or expense arising from liquidation or redeployment of funds
or from fees payable to terminate deposits of matching funds. Lenders shall not
be required to purchase Dollar deposits in the London interbank market or any
other offshore Dollar market to fund any LIBOR Loan, but the provisions hereof
shall be deemed to apply as if each Lender had purchased such deposits to fund
its LIBOR Loans.
3.10. MAXIMUM INTEREST. In no event shall interest, charges or other
amounts that are contracted for, charged or received by Agent and Lenders
pursuant to any Loan Documents and that are deemed interest under Applicable Law
("INTEREST") exceed the highest rate permissible under Applicable Law ("MAXIMUM
RATE"). If, in any month, any interest rate, absent the foregoing limitation,
would have exceeded the maximum rate, then the interest rate for that month
shall be the maximum rate and, if in a future month, that interest rate would
otherwise be less than the maximum rate, then the rate shall remain at the
maximum rate until the amount of interest actually paid equals the amount of
interest which would have accrued if it had not been limited by the maximum
rate. If, upon Full Payment of the Obligations, the total amount of interest
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actually paid under the Loan Documents is less than the total amount of interest
that would, but for this Section, have accrued under the Loan Documents, then
Borrowers shall, to the extent permitted by Applicable Law, pay to Agent, for
the account of Lenders, (a) the lesser of (i) the amount of interest that would
have been charged if the maximum rate had been in effect at all times, or (ii)
the amount of interest that would have accrued had the interest rate otherwise
set forth in the Loan Documents been in effect, MINUS (b) the amount of interest
actually paid under the Loan Documents. If a court of competent jurisdiction
determines that Agent or any Lender has received interest in excess of the
maximum amount allowed under Applicable Law, such excess shall be deemed
received on account of, and shall automatically be applied to reduce,
Obligations other than interest (regardless of any erroneous application thereof
by Agent or any Lender), and upon Full Payment of the Obligations, any balance
shall be refunded to Borrowers. In determining whether any excess interest has
been charged or received by Agent or any Lender, all interest at any time
charged or received from Borrowers in connection with the Loan Documents shall,
to the extent permitted by Applicable Law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of the Obligations.
SECTION 4. LOAN ADMINISTRATION
4.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS.
4.1.1. NOTICE OF BORROWING.
(a) Whenever Borrowers desire funding of a Borrowing of Revolver
Loans, Borrower Agent shall give Agent a Notice of Borrowing. Such notice must
be received by Agent no later than 11:00 a.m. (i) on the Business Day of the
requested funding date, in the case of Base Rate Loans, and (ii) at least three
Business Days prior to the requested funding date, in the case of LIBOR Loans.
Notices received after 11:00 a.m. shall be deemed received on the next Business
Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the
principal amount of the Borrowing, (B) the requested funding date (which must be
a Business Day), (C) whether the Borrowing is to be made as Base Rate Loans or
LIBOR Loans, and (D) in the case of LIBOR Loans, the duration of the applicable
Interest Period (which shall be deemed to be one month if not specified).
(b) Unless payment is otherwise timely made by Borrowers, the
becoming due of any Obligations (whether principal, interest, fees or other
charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and
Bank Product Debt) shall be deemed to be a request for Base Rate Revolver Loans
on the due date, in the amount of such Obligations. The proceeds of such
Revolver Loans shall be disbursed as direct payment of the relevant Obligation.
(c) If Borrowers establish a controlled disbursement account with
Agent or any Affiliate of Agent, then the presentation for payment of any check
or other item of payment drawn on such account at a time when there are
insufficient funds to cover it shall be deemed to be a request for Base Rate
Revolver Loans on the date of such presentation, in the amount of the check and
items presented for payment. The proceeds of such Revolver Loans may be
disbursed directly to the controlled disbursement account or other appropriate
account.
4.1.2. FUNDINGS BY LENDERS. Each Lender shall timely honor its
Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans that is properly requested hereunder. Except for Borrowings to be made as
Swingline Loans, Agent shall endeavor to notify Lenders of each Notice of
Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed
funding date for Base Rate Loans or by 3:00 p.m. at least two Business Days
before any proposed funding of LIBOR Loans. Each Lender shall fund to Agent such
Lender's Pro Rata share of the Borrowing to the account specified by Agent in
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immediately available funds not later than 2:00 p.m. on the requested funding
date, unless Agent's notice is received after the times provided above, in which
event Lender shall fund its Pro Rata share by 11:00 a.m. on the next Business
Day. Subject to its receipt of such amounts from Lenders, Agent shall disburse
the proceeds of the Revolver Loans as directed by Borrower Agent. Unless Agent
shall have received (in sufficient time to act) written notice from a Lender
that it does not intend to fund its Pro Rata share of a Borrowing, Agent may
assume that such Lender has deposited or promptly will deposit its share with
Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lender's
share of any Borrowing is not in fact received by Agent, then Borrowers agree to
repay to Agent ON DEMAND the amount of such share, together with interest
thereon from the date disbursed until repaid, at the rate applicable to such
Borrowing.
4.1.3. SWINGLINE LOANS; SETTLEMENT.
(a) Agent may, but shall not be obligated to, advance Swingline
Loans to U.S. Borrowers out of Agent's own funds, up to an aggregate outstanding
amount of $5,000,000, unless the funding is specifically required to be made by
all Lenders hereunder. Each Swingline Loan shall constitute a Revolver Loan for
all purposes, except that payments thereon shall be made to Agent for its own
account. The obligation of U.S. Borrowers to repay Swingline Loans shall be
evidenced by the records of Agent and need not be evidenced by any promissory
note.
(b) To facilitate administration of the Revolver Loans, Lenders and
Agent agree (which agreement is solely among them, and not for the benefit of or
enforceable by any Borrower) that settlement among them with respect to
Swingline Loans and other Revolver Loans may take place periodically on a date
determined from time to time by Agent, which shall occur at least once every
five Business Days. On each settlement date, settlement shall be made with each
Lender in accordance with the Settlement Report delivered by Agent to Lenders.
Between settlement dates, Agent may in its discretion apply payments on Revolver
Loans to Swingline Loans, regardless of any designation by any Borrower or any
provision herein to the contrary. Each Lender's obligation to make settlements
with Agent is absolute and unconditional, without offset, counterclaim or other
defense, and whether or not the Commitments have terminated, an Overadvance
exists, or the conditions in SECTION 6 are satisfied. If, due to an Insolvency
Proceeding with respect to a Borrower or otherwise, any Swingline Loan may not
be settled among Lenders hereunder, then each Lender shall be deemed to have
purchased from Agent a Pro Rata participation in each unpaid Swingline Loan and
shall transfer the amount of such participation to Agent, in immediately
available funds, within one Business Day after Agent's request therefor.
4.1.4. NOTICES. Each Borrower authorizes Agent and Lenders to
extend, convert or continue Loans, effect selections of interest rates, and
transfer funds to or on behalf of Borrowers based on telephonic or e-mailed
instructions. Borrowers shall confirm each such request by prompt delivery to
Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if
applicable, but if it differs in any material respect from the action taken by
Agent or Lenders, the records of Agent and Lenders shall govern. Neither Agent
nor any Lender shall have any liability for any loss suffered by a Borrower as a
result of Agent or any Lender acting upon its understanding of telephonic or
e-mailed instructions from a person believed in good faith by Agent or any
Lender to be a person authorized to give such instructions on a Borrower's
behalf.
4.2. DEFAULTING LENDER. If a Lender fails to make any payment to any
Credit Party that is required hereunder, Agent may (but shall not be required
to), in its discretion, retain payments that would otherwise be made to such
defaulting Lender hereunder, apply the payments to such Lender's defaulted
obligations or readvance the funds to Borrowers in accordance with this
Agreement. The failure of any Lender to fund a Loan or to make a payment in
respect of a LC Obligation shall not relieve any other Lender of its obligations
hereunder, and no Lender shall be responsible for default by another Lender.
Lenders and Agent agree (which agreement is solely among them, and not for the
benefit of or enforceable by any Borrower) that, solely for purposes of
determining a defaulting Lender's right to vote on matters relating to the Loan
Documents and to share in payments, fees and Collateral proceeds thereunder, a
defaulting Lender shall not be deemed to be a "Lender" until all its defaulted
obligations have been cured.
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4.3. NUMBER AND AMOUNT OF LIBOR LOANS; DETERMINATION OF RATE. For
ease of administration, all LIBOR Revolver Loans and all LIBOR Term Loans having
the same length and beginning date of their Interest Periods shall be aggregated
together, and such Loans shall be allocated among Lenders on a Pro Rata basis.
No more than 10 aggregated LIBOR Loans may be outstanding at any time, and each
aggregate LIBOR Loan when made, continued or converted shall be in a minimum
amount of $1,000,000, or an increment of $500,000 in excess thereof, or in such
lower minimum amount or incremental amount as Agent may determine in its
discretion. Upon determining Adjusted LIBOR for any Interest Period requested by
Borrowers, Agent shall promptly notify Borrowers thereof by telephone or
electronically and, if requested by Borrowers, shall confirm any telephonic
notice in writing.
4.4. BORROWER AGENT. Each Borrower hereby designates Bairnco
("BORROWER AGENT") as its representative and agent for all purposes under the
Loan Documents, including requests for Loans and Letters of Credit, designation
of interest rates, delivery or receipt of communications with Agent, Issuing
Bank or any Lender, preparation and delivery of Borrowing Base and financial
reports, receipt and payment of Obligations, requests for waivers, amendments or
other accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender. Borrower Agent hereby accepts such appointment. Agent and Lenders
shall be entitled to rely upon, and shall be fully protected in relying upon,
any notice or communication (including any notice of borrowing) delivered by
Borrower Agent on behalf of any Borrower. Agent and Lenders may give any notice
or communication with a Borrower hereunder to Borrower Agent on behalf of such
Borrower. Agent shall have the right, in its discretion, to deal exclusively
with Borrower Agent for any or all purposes under the Loan Documents. Each
Borrower agrees that any notice, election, communication, representation,
agreement or undertaking made on its behalf by Borrower Agent shall be binding
upon and enforceable against it.
4.5. ONE OBLIGATION. The Loans (including the Foreign Currency
Loans), LC Obligations and other Obligations shall constitute one general
obligation of U.S. Borrowers, the Foreign Currency Loans and other Obligations
relating to the Foreign Currency Loans shall constitute one general obligation
of the Foreign Currency Borrowers, and (unless otherwise expressly provided in
any Loan Document) the Loans (including the Foreign Currency Loans), LC
Obligations and other Obligations shall be secured by Agent's Lien upon all
Collateral; PROVIDED, HOWEVER, that each Credit Party shall be deemed to be a
creditor of, and the holder of a separate claim against, each Borrower to the
extent of any Obligations jointly or severally owed by such Borrower.
4.6. EFFECT OF TERMINATION. On the effective date of any termination
of the Commitments, all Obligations shall be immediately due and payable, and
any Lender may terminate its and its Affiliates' Bank Products (including, with
the consent of Agent, any Cash Management Services). All undertakings of
Borrowers contained in the Loan Documents shall survive any termination, and
Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents until Full Payment of the Obligations.
Notwithstanding Full Payment of the Obligations, Agent shall not be required to
terminate its Liens in any Collateral unless, with respect to any damages Agent
may incur as a result of the dishonor or return of Payment Items applied to
Obligations, Agent receives (a) a written agreement, executed by Borrowers and
any Person whose advances are used in whole or in part to satisfy the
Obligations, indemnifying Agent and Lenders from any such damages; or (b) such
Cash Collateral as Agent, in its discretion, deems necessary to protect against
any such damages. The provisions of SECTIONS 2.3, 3.4, 3.6, 3.7, 3.9, 5.5, 5.9,
12, 14.2 and this Section, and the obligation of each Obligor and Lender with
respect to each indemnity given by it in any Loan Document, shall survive Full
Payment of the Obligations and any release relating to this credit facility.
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SECTION 5. PAYMENTS
5.1. GENERAL PAYMENT PROVISIONS. All payments of Obligations shall
be made in Dollars, without offset, counterclaim or defense of any kind, free of
(and without deduction for) any Taxes, and in immediately available funds, not
later than 12:00 noon on the due date. Any payment after such time shall be
deemed made on the next Business Day. Borrowers may, at the time of payment,
specify to Agent the Obligations to which such payment is to be applied, but
Agent shall in all events retain the right to apply such payment in such manner
as Agent, subject to the provisions hereof, may determine to be appropriate. If
any payment under the Loan Documents shall be stated to be due on a day other
than a Business Day, the due date shall be extended to the next Business Day and
such extension of time shall be included in any computation of interest and
fees. Any payment of a LIBOR Loan prior to the end of its Interest Period shall
be accompanied by all amounts due under SECTION 3.9. Any prepayment of Loans
shall be applied first to Base Rate Loans and then to LIBOR Loans.
5.2. REPAYMENT OF REVOLVER LOANS. Revolver Loans shall be due and
payable in full on the Revolver Termination Date, unless payment is sooner
required hereunder. Revolver Loans may be prepaid from time to time, without
penalty or premium. If any Asset Disposition includes the disposition of
Accounts or Inventory, then Net Proceeds equal to the greater of (a) the net
book value of such Accounts and Inventory, or (b) the reduction in the Borrowing
Base upon giving effect to such disposition, shall be applied to the Revolver
Loans. Notwithstanding anything herein to the contrary, if an Overadvance
exists, Borrowers shall, on the sooner of Agent's demand or the first Business
Day after any Borrower has knowledge thereof, repay the outstanding Revolver
Loans in an amount sufficient to reduce the principal balance of Revolver Loans
to the Borrowing Base.
5.3. REPAYMENT OF TERM LOANS.
5.3.1. PAYMENT OF PRINCIPAL. The principal amount of the Term Loans
shall be repaid on the first Business Day of each month in consecutive monthly
installments of $93,284, commencing on December 1, 2006, and continuing through
November 1, 2011, with all principal, interest and other amounts owing with
respect to the Terms Loans shall be due and payable in full on the Term Loan
Maturity Date. Each installment shall be paid to Agent for the Pro Rata benefit
of Lenders. Once repaid, whether such repayment is voluntary or required, Term
Loans may not be reborrowed.
5.3.2. MANDATORY PREPAYMENTS.
(a) Concurrently with any Permitted Asset Disposition of Equipment
or Real Estate, Borrowers shall prepay Term Loans in an amount equal to the Net
Proceeds of such disposition;
(b) Concurrently with the receipt of any proceeds of insurance or
condemnation awards paid in respect of any Equipment or Real Estate, Borrowers
shall prepay Term Loans in an amount equal to such proceeds, subject to SECTION
8.6.2;
(c) Concurrently with any issuance of Equity Interests by a Borrower
other than sales by Bairnco of its Equity Interests in a public offering or to
its employees or directors pursuant to a stock option plan, Borrowers shall
prepay Term Loans in an amount equal to the net proceeds of such issuance; and
(d) On the Commitment Termination Date, Borrowers shall prepay all
Term Loans (unless sooner repaid hereunder).
5.3.3. OPTIONAL PREPAYMENTS. Borrowers may, at their option from
time to time, prepay the Term Loans. Borrowers shall give written notice to
Agent of an intended prepayment of Term Loans, which notice shall specify the
amount of the prepayment, shall be irrevocable once given, shall be given at
least 10 Business Days prior to the end of a month and shall be effective as of
the first day of the next month.
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5.3.4. INTEREST; APPLICATION OF PREPAYMENTS. Each prepayment of Term
Loans shall be accompanied by all interest accrued thereon and any amounts
payable under SECTION 3.9, and shall be applied to principal in inverse order of
maturity.
5.4. PAYMENT OF OTHER OBLIGATIONS. Obligations other than Loans,
including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers
as provided in the Loan Documents or, if no payment date is specified, ON
DEMAND.
5.5. MARSHALING; PAYMENTS SET ASIDE. None of Agent or Lenders shall
be under any obligation to marshal any assets in favor of any Obligor or against
any Obligations. If any Obligor makes a payment to Agent or Lenders, or if Agent
or any Lender receives payment from the proceeds of Collateral, exercise of
setoff or otherwise, and such payment is subsequently invalidated or required to
be repaid to a trustee, receiver or any other Person, then the Obligations
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 received and any enforcement or setoff had not occurred.
5.6. POST-DEFAULT ALLOCATION OF PAYMENTS.
5.6.1. ALLOCATION. Notwithstanding anything herein to the contrary,
during an Event of Default, monies to be applied to the Obligations, whether
arising from payments by Obligors, realization on Collateral, setoff or
otherwise, shall be allocated as follows:
(a) FIRST, to all costs and expenses, including Extraordinary
Expenses, owing to Agent;
(b) SECOND, to all amounts owing to Agent on Swingline Loans or
Protective Advances;
(c) THIRD, to all amounts owing to Issuing Bank on LC Obligations;
(d) FOURTH, to all Obligations constituting fees (excluding amounts
relating to Bank Products);
(e) FIFTH, to all Obligations constituting interest (excluding
amounts relating to Bank Products);
(f) SIXTH, to provide Cash Collateral for outstanding Letters of
Credit;
(g) SEVENTH, to all other Obligations, other than Bank Product Debt;
and
(h) LAST, to Bank Product Debt.
Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. The allocations set forth in this Section are
solely to determine the rights and priorities of Agent and Lenders as among
themselves, and may be changed by agreement among them without the consent of
any Obligor. This Section is not for the benefit of or enforceable by any
Borrower.
5.6.2. ERRONEOUS APPLICATION. Agent shall not be liable for any
application of amounts made by it in good faith and, if any such application is
subsequently determined to have been made in error, the sole recourse of any
Lender or other Person to which such amount should have been made shall be to
recover the amount from the Person that actually received it (and, if such
amount was received by any Lender, such Lender hereby agrees to return it).
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5.7. APPLICATION OF PAYMENTS. The ledger balance in the main
Dominion Account as of the end of a Business Day shall be applied to the
Obligations at the beginning of the next Business Day. Each Borrower irrevocably
waives the right to direct the application of any payments or Collateral
proceeds, and agrees that Agent shall have the continuing, exclusive right to
apply and reapply same against the Obligations, in such manner as Agent deems
advisable, notwithstanding any entry by Agent in its records. If, as a result of
Agent's receipt of Payment Items or proceeds of Collateral, a credit balance
exists, the balance shall not accrue interest in favor of Borrowers and shall be
made available to Borrowers as long as no Default or Event of Default exists.
5.8. LOAN ACCOUNT; ACCOUNT STATED.
5.8.1. LOAN ACCOUNT. Agent shall maintain in accordance with its
usual and customary practices an account or accounts ("LOAN ACCOUNT") evidencing
the Debt of Borrowers resulting from each Loan or issuance of a Letter of Credit
from time to time. Any failure of Agent to record anything in the Loan Account,
or any error in doing so, shall not limit or otherwise affect the obligation of
Borrowers to pay any amount owing hereunder. Agent may maintain a single Loan
Account in the name of Borrower Agent, and each Borrower confirms that such
arrangement shall have no effect on the joint and several character of its
liability for the Obligations.
5.8.2. ENTRIES BINDING. Entries made in the Loan Account shall
constitute presumptive evidence of the information contained therein. If any
information contained in the Loan Account is provided to or inspected by any
Person, then such information shall be conclusive and binding on such Person for
all purposes absent manifest error, except to the extent such Person notifies
Agent in writing within 30 days after receipt or inspection that specific
information is subject to dispute.
5.9. TAXES. If any Taxes (except Excluded Taxes) shall be payable by
any party due to the execution, delivery, issuance or recording of any Loan
Documents, or the creation or repayment of any Obligations, Borrowers shall pay
(and shall promptly reimburse Credit Parties for their payment of) all such
Taxes, including any interest and penalties thereon, and will indemnify and hold
harmless Indemnitees against all liability in connection therewith. If Borrowers
shall be required by Applicable Law to withhold or deduct any Taxes (except
Excluded Taxes) with respect to any sum payable under any Loan Documents, (a)
the sum payable to any Credit Party hall 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) Borrowers shall make such
withholding or deductions; (c) Borrowers shall pay the full amount withheld or
deducted to the relevant taxing or other authority in accordance with Applicable
Law; and (d) promptly after payment thereof, Borrowers shall deliver to Agent
copies of tax returns or filings, or other documentation satisfactory to Agent
in its discretion, evidencing such payment of all such Taxes.
5.10. WITHHOLDING TAX EXEMPTION. At least five Business Days prior
to the first date for payment of interest or fees hereunder to a Foreign Lender,
the Foreign Lender shall deliver to Borrowers and Agent two duly completed
copies of IRS Form W-8BEN or W-8ECI (or any subsequent replacement or substitute
form therefor), certifying that such Lender can receive payment of Obligations
without deduction or withholding of any United States federal income taxes. Each
Foreign Lender shall deliver to Borrowers and Agent two additional copies of
such form before the preceding form expires or becomes obsolete or after the
occurrence of any event requiring a change in the form, as well as any
amendments, extensions or renewals thereof as may be reasonably requested by
Borrowers or Agent, in each case, certifying that the Foreign Lender can receive
payment of Obligations without deduction or withholding of any such taxes,
unless an event (including any change in treaty or law) has occurred that
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renders such forms inapplicable or prevents the Foreign Lender from certifying
that it can receive payments without deduction or withholding of such taxes.
During any period that a Foreign Lender does not or is unable to establish that
it can receive payments without deduction or withholding of such taxes, other
than by reason of an event (including any change in treaty or law) that occurs
after it becomes a Lender, Agent may withhold taxes from payments to such
Foreign Lender at the applicable statutory and treaty rates, and Borrowers shall
not be required to pay any additional amounts under this Section as a result of
such withholding.
5.11. CURRENCY FLUCTUATIONS.
5.11.1. Not later than 1:00 p.m. on the last Business Day of each
calendar month or, in the event that the Exchange Rate fluctuates in excess of
10% during such calendar month, any other Business Day in the reasonable
discretion of Agent (the "Calculation Date"), Agent shall determine the Exchange
Rate as of such date. The Exchange Rate so determined shall become effective on
the first Business Day immediately following such determination (a "Reset Date")
and shall remain effective until the next succeeding Reset Date. Nothing
contained in this SECTION 5.11 shall be construed to require Agent to calculate
compliance under this SECTION 5.11 more frequently than once each month.
5.11.2. Not later than 4:00 p.m. on each Reset Date, Agent shall
determine the Dollar Equivalent of the Foreign Currency Loans.
5.11.3. If, on any Reset Date, the Total Revolver Exposure exceeds
the total amount of the Revolver Commitments on such date, the aggregate amount
of the Foreign Currency Loans on such date exceeds the Foreign Currency Sublimit
on such date (the amount of any such excess referred to herein as the "Excess
Amount") then (i) Agent shall give notice thereof to Borrowers and Lenders and
(ii) within 1 Business Day thereafter, Borrowers shall cause such excess to be
eliminated, either by repayment of Revolver Loans or depositing of Cash
Collateral with Agent with respect to LC Obligations and until such Excess
Amount is repaid, Lenders shall not have any obligation to make any Loans.
5.12. NATURE AND EXTENT OF EACH BORROWER'S LIABILITY.
5.12.1. JOINT AND SEVERAL LIABILITY. Each (i) U.S. Borrower agrees
that it is jointly and severally liable for, and absolutely and unconditionally
guarantees to Agent and Lenders the prompt payment and performance of, all
Obligations and all agreements under the Loan Documents, and (ii) each Foreign
Currency Borrower agrees that it is jointly and severally liable for, and
absolutely and unconditionally guarantees to Agent and Lenders the prompt
payment and performance of, all Foreign Currency Loans and other Obligations
relating to the Foreign Currency Loans, in each case regardless of which
Borrower received the proceeds of any Loans or other extensions of credit
hereunder or the amount of such Loans or other extensions of credit or the
manner in which any Credit Party accounts for such Loans or other extensions of
credit on its books and records, it being acknowledged and agreed that Loans
(including Foreign Currency Loans) and other extensions of credit to any
Borrower inure to the mutual benefit of all U.S. Borrowers and that Loans and
other extensions of credit to any Foreign Currency Borrower inure to the mutual
benefit of all Foreign Currency Borrowers. Each Borrower agrees that its
guaranty obligations hereunder constitute a continuing guaranty of payment and
performance and not of collection, that such obligations shall not be discharged
until Full Payment of the Obligations, and that such obligations are absolute
and unconditional, irrespective of (a) the genuineness, validity, regularity,
enforceability, subordination or any future modification of, or change in, any
Obligations or Loan Document, or any other document, instrument or agreement to
which any Obligor is or may become a party or liable; (b) the absence of any
action to enforce this Agreement (including this Section) or any other Loan
Document, or any waiver, consent or indulgence of any kind by any Credit Party
with respect thereto; (c) the existence, value or condition of, or failure to
perfect a Lien or to preserve rights against, any security or guaranty for the
Obligations or any action, or the absence of any action, by Agent or any Lender
in respect thereof (including the release of any security or guaranty); (d) the
insolvency of any Obligor; (e) any Credit Party's election in an Insolvency
Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f)
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any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession
under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of
any claims of any Credit Party against any Obligor for the repayment of any
Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any
other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, except Full Payment of
all Obligations.
5.12.2. WAIVERS.
(a) Each Borrower expressly waives all rights that it may have now
or in the future under any statute, at common law, in equity or otherwise, to
compel Agent or Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any Obligations
before, or as a condition to, proceeding against such Borrower. It is agreed
among each Borrower, Agent and Lenders that the provisions of this Section are
of the essence of the transaction contemplated by the Loan Documents and that,
but for such provisions, Agent and Lenders would decline to make Loans and issue
Letters of Credit. Notwithstanding anything to the contrary in any Loan
Document, and except as set forth in SECTION 5.11.3, each Borrower expressly
waives all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set off, as well as all defenses
available to a surety, guarantor or accommodation co-obligor. Each Borrower
acknowledges that its guaranty pursuant to this Section is necessary to the
conduct and promotion of its business, and can be expected to benefit such
business.
(b) Agent and Lenders may, in their discretion, pursue such rights
and remedies as they deem appropriate, including realization upon Collateral or
any Real Estate by judicial foreclosure or non-judicial sale or enforcement,
without affecting any rights and remedies under this SECTION 5.12. If, in the
exercise of any rights or remedies, Agent or any Lender shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against
any Borrower or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or otherwise, each Borrower consents to
such action by Agent or such Lender and waives any claim based upon such action,
even if the action may result in loss of any rights of subrogation that any
Borrower might otherwise have had but for such action. Any election of remedies
that results in denial or impairment of the right of Agent or any Lender to seek
a deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. Each Borrower waives all
rights and defenses arising out of an election of remedies, such as nonjudicial
foreclosure with respect to any security for the Obligations, even though that
election of remedies destroys such Borrower's rights of subrogation against any
other Person. If Agent bids at any foreclosure or trustee's sale or at any
private sale, Agent may bid all or a portion of the Obligations and the amount
of such bid need not be paid by Agent but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Agent or
any other Person is the successful bidder, shall be conclusively deemed to be
the fair market value of the Collateral, and the difference between such bid
amount and the remaining balance of the Obligations shall be conclusively deemed
to be the amount of the Obligations guaranteed under this SECTION 5.12,
notwithstanding that any present or future law or court decision may have the
effect of reducing the amount of any deficiency claim to which Agent or any
Lender might otherwise be entitled but for such bidding at any such sale.
5.12.3. NO REDUCTION IN LIABILITY FOR OBLIGATIONS. No payment or
payments made by an Obligor or received or collected by any Credit Party or any
other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, release or otherwise
affect the liability of any Borrower under this Agreement for any remaining
Obligations, each of whom shall remain jointly and severally liable for the
payment and performance of all Obligations until Full Payment of such
Obligations.
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5.12.4. EXTENT OF LIABILITY; CONTRIBUTION.
(a) Notwithstanding anything herein to the contrary, each Borrower's
liability under this SECTION 5.12 shall be limited to the greater of (i) all
amounts for which such Borrower is primarily liable, as described below, and
(ii) such Borrower's Allocable Amount.
(b) If any Borrower makes a payment under this SECTION 5.12 of any
Obligations (other than amounts for which such Borrower is primarily liable) (a
"GUARANTOR PAYMENT") that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower's Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment. The "ALLOCABLE
AMOUNT" for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this SECTION 5.12 without rendering such
payment voidable or avoidable under Section 548 of the Bankruptcy Code or under
any applicable state fraudulent transfer or conveyance act, or similar statute
or common law.
(c) Nothing contained in this SECTION 5.12 shall limit the liability
of any Borrower to pay Loans made directly or indirectly to that Borrower
(including Loans advanced to any other Borrower and then re-loaned or otherwise
transferred to, or for the benefit of, such Borrower), LC Obligations relating
to Letters of Credit issued to support such Borrower's business, and all accrued
interest, fees, expenses and other related Obligations with respect thereto, for
which such Borrower shall be primarily liable for all purposes hereunder. Agent
and Lenders shall have the right, at any time in their discretion, to condition
Loans and Letters of Credit upon a separate calculation of borrowing
availability for each Borrower and to restrict the disbursement and use of such
Loans and Letters of Credit to such Borrower.
5.12.5. JOINT ENTERPRISE. Each Borrower has requested that Agent and
Lenders make this credit facility available to Borrowers on a combined basis, in
order to finance Borrowers' business most efficiently and economically.
Borrowers' business is a mutual and collective enterprise, and Borrowers believe
that consolidation of their credit facility will enhance the borrowing power of
each Borrower and ease the administration of their relationship with Lenders,
all to the mutual advantage of Borrowers. Borrowers acknowledge and agree that
Agent's and Lenders' willingness to extend credit to Borrowers and to administer
the Collateral on a combined basis, as set forth herein, is done solely as an
accommodation to Borrowers and at Borrowers' request.
5.12.6. SUBORDINATION. Each U.S. Borrower hereby subordinates any
claims, including any right of payment, subrogation, contribution and indemnity,
that it may have at any time against any other Obligor, howsoever arising, to
the Full Payment of all Obligations. Each Foreign Currency Borrower hereby
subordinates any claims, including any right of payment, subrogation,
contribution and indemnity, that it may have at any time against any other
Foreign Currency Borrower, howsoever arising, to the Full Payment of all Foreign
Currency Loans and other Obligations relating to the Foreign Currency Loans.
SECTION 6. CONDITIONS PRECEDENT
6.1. CONDITIONS PRECEDENT TO INITIAL LOANS. In addition to the
conditions set forth in SECTION 6.2, Lenders shall not be required to fund any
requested Loan, issue any Letter of Credit, or otherwise extend credit to
Borrowers hereunder, until the date ("CLOSING DATE") that each of the following
conditions has been satisfied:
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(a) Notes shall have been executed by Borrowers and delivered to
each Lender that requests issuance of a Note. Each other Loan Document shall
have been duly executed and delivered to Agent by each of the signatories
thereto, and each Obligor shall be in compliance with all terms thereof.
(c) Agent shall have received acknowledgments of all filings or
recordations necessary to perfect its Liens in the Collateral, as well as UCC
and Lien searches and other evidence satisfactory to Agent that such Liens are
the only Liens upon the Collateral, except Permitted Liens.
(c) Agent shall have received the Related Real Estate Documents for
all Real Estate subject to a Mortgage.
(d) Agent shall have received duly executed agreements establishing
each Dominion Account and related lockbox, in form and substance, and with
financial institutions, satisfactory to Agent.
(e) Agent shall have received certificates, in form and substance
satisfactory to it, from a knowledgeable Senior Officer of each Borrower
certifying that, after giving effect to the initial Loans and transactions
hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default
exists; (iii) the representations and warranties set forth in SECTION 9 are true
and correct; and (iv) such Borrower has complied with all agreements and
conditions to be satisfied by it under the Loan Documents.
(f) Agent shall have received a certificate of a duly authorized
officer of each Obligor, certifying (i) that attached copies of such Obligor's
Organic Documents are true and complete, and in full force and effect, without
amendment except as shown, (ii) that an attached copy of resolutions authorizing
execution and delivery of the Loan Documents is true and complete, and that such
resolutions are in full force and effect, were duly adopted, have not been
amended, modified or revoked, and constitute all resolutions adopted with
respect to this credit facility, and (iii) to the title, name and signature of
each Person authorized to sign the Loan Documents. Agent may conclusively rely
on this certificate until it is otherwise notified by the applicable Obligor in
writing.
(g) Agent shall have received a written opinion of Holland & Knight,
as well as any local counsel to Borrowers or Agent, in form and substance
satisfactory to Agent.
(h) Agent shall have received copies of the charter documents of
each Obligor, certified as appropriate by the Secretary of State or another
official of such Obligor's jurisdiction of organization. Agent shall have
received good standing certificates for each Obligor, issued by the Secretary of
State or other appropriate official of such Obligor's jurisdiction of
organization and each jurisdiction where such Obligor's conduct of business or
ownership of Property necessitates qualification.
(i) Agent shall have received copies of policies or certificates of
insurance for the insurance policies carried by Borrowers, all in compliance
with the Loan Documents.
(j) Agent shall have completed its business, financial and legal due
diligence of Obligors, with results satisfactory to Agent. No material adverse
change in the financial condition of any Obligor or in the quality, quantity or
value of any Collateral shall have occurred since December 31, 2005. Borrowers
shall have entered into an extension of its existing collective bargaining
agreement with the United Foods and Commercial Workers Local 266 for Borrowers'
Bear, Delaware manufacturing facility or a new collective bargaining agreement
with such union, for a period consistent with the period of previous collective
bargaining agreements with such union.
(k) Borrowers shall have paid all fees and expenses to be paid to
Agent and Lenders on the Closing Date.
(l) Agent shall have received a Borrowing Base Certificate prepared
as of the Closing Date. Upon giving effect to the initial funding of Loans and
issuance of Letters of Credit, the consummation of the Asset Purchase and the
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payment by Borrowers of all fees and expenses incurred in connection herewith
and therewith and after increasing the Availability Reserve in the amount of
payables of each Borrower stretched beyond such Borrower's customary payment
practices, Availability shall be at least $3,000,000.
(m) Agent shall have received from the owner of the Acquired
Residential Properties a negative pledge agreement with respect to such Real
Estate, in form and substance satisfactory to Agent.
6.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Agent, Issuing
Bank and Lenders shall not be required to fund any Loans, arrange for issuance
of any Letters of Credit or grant any other accommodation to or for the benefit
of Borrowers, unless the following conditions are satisfied:
(a) No Default or Event of Default shall exist at the time of, or
result from, such funding, issuance or grant;
(b) The representations and warranties of each Obligor in the Loan
Documents shall be true and correct on the date of, and upon giving effect to,
such funding, issuance or grant (except for representations and warranties that
expressly relate to an earlier date);
(c) All conditions precedent in any other Loan Document shall be
satisfied;
(d) No event shall have occurred or circumstance exist that has or
could reasonably be expected to have a Material Adverse Effect; and
(e) With respect to issuance of a Letter of Credit, the LC
Conditions shall be satisfied.
Each request (or deemed request) by Borrowers for funding of a Loan, issuance of
a Letter of Credit or grant of an accommodation shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or grant. As an
additional condition to any funding, issuance or grant, Agent shall have
received such other information, documents, instruments and agreements as it
deems appropriate in connection therewith.
6.3. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Agent, Issuing Bank
or Lenders fund any Loans, arrange for issuance of any Letters of Credit or
grant any other accommodation when any conditions precedent are not satisfied
(regardless of whether the lack of satisfaction was known or unknown at the
time), it shall not operate as a waiver of (a) the right of Agent, Issuing Bank
and Lenders to insist upon satisfaction of all conditions precedent with respect
to any subsequent funding, issuance or grant; nor (b) any Default or Event of
Default due to such failure of conditions or otherwise.
SECTION 7. COLLATERAL
7.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all Obligations, each U.S. Borrower hereby grants to Agent, for
the benefit of Secured Parties, a continuing security interest in and Lien upon
all Property of such Borrower, including all of the following Property, whether
now owned or hereafter acquired, and wherever located:
(a) all Accounts;
(b) all Chattel Paper, including electronic chattel paper;
(c) all Commercial Tort Claims;
(d) all Deposit Accounts;
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(e) all Documents;
(f) all General Intangibles, including Payment Intangibles, Software
and Intellectual Property;
(g) all Goods, including Inventory, Equipment and fixtures;
(h) all Instruments;
(i) all Investment Property;
(j) all Letter-of-Credit Rights;
(k) all Supporting Obligations;
(l) all monies, whether or not in the possession or under the
control of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender,
including any Cash Collateral;
(m) all accessions to, substitutions for, and all replacements,
products, and cash and non-cash proceeds of the foregoing, including proceeds of
and unearned premiums with respect to insurance policies, and claims against any
Person for loss, damage or destruction of any Collateral; and
(n) all books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs and computer records)
pertaining to the foregoing.
7.2. LIEN ON DEPOSIT ACCOUNTS; CASH COLLATERAL.
7.2.1. DEPOSIT ACCOUNTS. To further secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
of such Borrower's right, title and interest in and to each Deposit Account of
such Borrower and any deposits or other sums at any time credited to any such
Deposit Account, including any sums in any blocked or lockbox accounts or in any
accounts into which such sums are swept. Each Borrower authorizes and directs
each bank or other depository to deliver to Agent, on a daily basis, all
balances in each Deposit Account maintained by such Borrower with such
depository for application to the Obligations then outstanding. Each Borrower
irrevocably appoints Agent as such Borrower's attorney-in-fact to collect such
balances to the extent any such delivery is not so made.
7.2.2. CASH COLLATERAL. Any Cash Collateral may be invested, in
Agent's discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement, understanding or course of dealing with any
Borrower, and shall have no responsibility for any investment or loss. Each
Borrower hereby grants to Agent, for the benefit of Secured Parties, a security
interest in all Cash Collateral held from time to time and all proceeds thereof,
as security for the Obligations, whether such Cash Collateral is held in the
Cash Collateral Account or elsewhere. Agent may apply Cash Collateral to the
payment of any Obligations, in such order as Agent may elect, as they become due
and payable. The Cash Collateral Account and all Cash Collateral shall be under
the sole dominion and control of Agent. No Borrower or other Person claiming
through or on behalf of any Borrower shall have any right to any Cash
Collateral, until Full Payment of all Obligations.
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7.3. REAL ESTATE COLLATERAL.
7.3.1. LIEN ON REAL ESTATE. The Obligations shall also be secured by
Mortgages upon all Real Estate owned by U.S. Borrowers, including the Real
Estate located at the location described on SCHEDULE 7.3. The Mortgages shall be
duly recorded, at Borrowers' expense, in each office where such recording is
required to constitute a fully perfected Lien on the Real Estate covered
thereby. If any U.S. Borrower acquires Real Estate hereafter, such Borrower
shall, within 30 days, execute, deliver and record a Mortgage sufficient to
create a first priority Lien in favor of Agent on such Real Estate, and shall
deliver all Related Real Estate Documents.
7.3.2. COLLATERAL ASSIGNMENT OF LEASES. To further secure the prompt
payment and performance of all Obligations, each Borrower hereby transfers and
assigns to Agent, for the benefit of Secured Parties, all of such Borrower's
right, title and interest in, to and under all now or hereafter existing leases
of real Property to which such Borrower is a party, whether as lessor or lessee,
and all extensions, renewals and modifications thereof.
7.4. OTHER COLLATERAL.
7.4.1. COMMERCIAL TORT CLAIMS. Borrowers shall promptly notify Agent
in writing if any U.S. Borrower has a Commercial Tort Claim (other than, as long
as no Default or Event of Default exists, a Commercial Tort Claim for less than
$100,000) and, upon Agent's request, shall promptly execute such documents and
take such actions as Agent deems appropriate to confer upon Agent (for the
benefit of Secured Parties) a duly perfected, first priority Lien upon such
claim.
7.4.2. CERTAIN AFTER-ACQUIRED COLLATERAL. Borrowers shall promptly
notify Agent in writing if, after the Closing Date, any U.S. Borrower obtains
any interest in any Collateral consisting of Deposit Accounts, Chattel Paper,
Documents, Instruments, Intellectual Property, Investment Property or
Letter-of-Credit Rights and, upon Agent's request, shall promptly execute such
documents and take such actions as Agent deems appropriate to effect Agent's
duly perfected, first priority Lien upon such Collateral, including obtaining
any appropriate possession, control agreement or Lien Waiver. If any Collateral
is in the possession of a third party, at Agent's request, Borrowers shall
obtain an acknowledgment that such third party holds the Collateral for the
benefit of Agent.
7.5. NO ASSUMPTION OF LIABILITY. The Lien on Collateral granted
hereunder is given as security only and shall not subject Agent or any Lender
to, or in any way modify, any obligation or liability of Borrowers relating to
any Collateral.
7.6. FURTHER ASSURANCES. Promptly upon request, Borrowers shall
deliver such instruments, assignments, title certificates, or other documents or
agreements, and shall take such actions, as Agent deems appropriate under
Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise
to give effect to the intent of this Agreement. Each Borrower authorizes Agent
to file any financing statement that indicates the Collateral as "all assets" or
"all personal property" of such Borrower, or words to similar effect, and
ratifies any action taken by Agent before the Closing Date to effect or perfect
its Lien on any Collateral.
7.7. FOREIGN SUBSIDIARY STOCK. Notwithstanding SECTION 7.1, the
Collateral shall include only 65% of the voting stock of any Foreign Subsidiary.
SECTION 8. COLLATERAL ADMINISTRATION
8.1. BORROWING BASE CERTIFICATES. On the Closing Date and on or
before the third Business Day of each week after the Closing Date, Borrowers
shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a
Borrowing Base Certificate prepared as of the close of business of the previous
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week, and at such other times as Agent may request. Borrowers shall include a
recalculation of Eligible Accounts and Eligible Inventory in each Borrowing Base
Certificate delivered during the second week of each month. All calculations of
Availability in any Borrowing Base Certificate shall originally be made by
Borrowers and certified by a Senior Officer, provided that Agent may from time
to time review and adjust any such calculation (a) to reflect its reasonable
estimate of declines in value of any Collateral, due to collections received in
the Dominion Account or otherwise; (b) to adjust advance rates to reflect
changes in quality, mix and other factors affecting Collateral; and (c) to the
extent the calculation is not made in accordance with this Agreement or does not
accurately reflect the Availability Reserve. In no event shall the Borrowing
Base on any date be deemed to exceed the amounts shown on the Borrowing Base
Certificate last received by Agent prior to such date, as the calculation in
such Borrowing Base Certificate may be adjusted from time to time by Agent as
herein authorized.
8.2. ADMINISTRATION OF ACCOUNTS.
8.2.1. RECORDS AND SCHEDULES OF ACCOUNTS. Each Borrower shall keep
accurate and complete records of its Accounts, including all payments and
collections thereon, and shall submit to Agent, on such periodic basis as Agent
may request, a sales and collections report, in form satisfactory to Agent. Each
Borrower shall also provide to Agent, on or before the 15th day of each month, a
detailed aged trial balance of all Accounts as of the end of the preceding
month, specifying each Account's Account Debtor name and address, amount,
invoice date and/or due date, showing any discount, allowance, credit,
authorized return or dispute, and including such proof of delivery, copies of
invoices and invoice registers, copies of related documents, repayment
histories, status reports and other information as Agent may reasonably request.
If Accounts in an aggregate face amount of $250,000 or more cease to be Eligible
Accounts, Borrowers shall notify Agent of such occurrence promptly (and in any
event within three Business Days) after any Borrower has knowledge thereof.
8.2.2. TAXES. If an Account of any Borrower includes a charge for
any Taxes, Agent is authorized, in its discretion, to pay the amount thereof to
the proper taxing authority for the account of such Borrower and to charge
Borrowers therefor; PROVIDED, HOWEVER, that no Credit Party shall be liable for
any Taxes that may be due from Borrowers or with respect to any Collateral.
8.2.3. ACCOUNT VERIFICATION. Whether or not a Default or Event of
Default exists, Agent shall have the right at any time, in the name of Agent,
any designee of Agent or any Borrower to verify the validity, amount or any
other matter relating to any Accounts of Borrowers by mail, telephone or
otherwise. Borrowers shall cooperate fully with Agent in an effort to facilitate
and promptly conclude any such verification process.
8.2.4. MAINTENANCE OF DOMINION ACCOUNT. Borrowers shall maintain
Dominion Accounts pursuant to lockbox or other arrangements acceptable to Agent.
Borrowers shall obtain an agreement (in form and substance satisfactory to
Agent) from each lockbox servicer and Dominion Account bank, establishing
Agent's control over and Lien in the lockbox or Dominion Account, requiring
immediate deposit of all remittances received in the lockbox to a Dominion
Account and, if such Dominion Account is not maintained with Bank of America,
requiring immediate transfer of all funds in the Dominion Account to a Dominion
Account maintained with Bank of America, and waiving offset rights of such
servicer or bank against any funds in the lockbox or Dominion Account, except
offset rights for customary administrative charges and for Payment Items
dishonored or returned for insufficient funds, on terms acceptable to Agent. No
Credit Party assumes any responsibility to Borrowers for any lockbox arrangement
or Dominion Account, including any claim of accord and satisfaction or release
with respect to any Payment Items accepted by any bank.
8.2.5. PROCEEDS OF COLLATERAL. Borrowers shall request in writing
and otherwise take all reasonable steps to ensure that all payments on Accounts
or otherwise relating to Collateral are made directly to a Dominion Account (or
a lockbox relating to a Dominion Account). If any Borrower or Subsidiary
receives cash or Payment Items with respect to any Collateral, it shall hold
same in trust for Agent and promptly (not later than the next Business Day)
deposit same into a Dominion Account.
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8.3. ADMINISTRATION OF INVENTORY.
8.3.1. RECORDS AND REPORTS OF INVENTORY. Each Borrower shall keep
accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Agent inventory reports in form
satisfactory to Agent, on such periodic basis as Agent may request. Each
Borrower shall conduct either a physical inventory at least once per calendar
year or periodic cycle counts consistent with historical practices (provided
that, each Borrower shall conduct a physical inventory when requested by Agent
from time to time at any time that an Event of Default exists), and shall
provide to Agent a report based on each such inventory and count promptly upon
completion thereof, together with such supporting information as Agent may
request. Agent may participate in and observe each inventory or physical count.
8.3.2. RETURNS OF INVENTORY. No Borrower shall return any Inventory
to a supplier, vendor or other Person, whether for cash, credit or otherwise,
unless (a) such return is in the Ordinary Course of Business; (b) no Default,
Event of Default or Overadvance exists or would result therefrom; (c) Agent is
promptly notified if the aggregate Value of all Inventory returned in any month
exceeds $250,000; and (d) any payment received by a Borrower for a return is
promptly remitted to Agent for application to the Obligations.
8.3.3. ACQUISITION, SALE AND MAINTENANCE. No Borrower shall acquire
or accept any Inventory on consignment or approval, and each Borrower shall take
all steps to assure that all Inventory is produced in accordance with Applicable
Law, including the FLSA. No Borrower shall sell any Inventory on approval or any
other basis under which the customer may return or require a Borrower to
repurchase such Inventory. Borrowers shall use, store and maintain all Inventory
with reasonable care and caution, in accordance with applicable standards of any
insurance and in conformity with all Applicable Law, and shall make current rent
payments (within applicable grace periods provided for in leases) at all
locations where any Collateral is located.
8.4. ADMINISTRATION OF EQUIPMENT.
8.4.1. RECORDS AND SCHEDULES OF EQUIPMENT. Each Borrower shall keep
accurate and complete records of its Equipment, including kind, quality,
quantity, cost, acquisitions and dispositions thereof, and shall submit to
Agent, on such periodic basis as Agent may request, a current schedule thereof,
in form satisfactory to Agent. Promptly upon request, Borrowers shall deliver to
Agent evidence of their ownership or interests in any Equipment.
8.4.2. DISPOSITIONS OF EQUIPMENT. No Borrower shall sell, lease or
otherwise dispose of any Equipment, without the prior written consent of Agent,
other than (a) a Permitted Asset Disposition; and (b) replacement of Equipment
that is worn, damaged or obsolete with Equipment of like function and value, if
the replacement Equipment is acquired substantially contemporaneously with such
disposition and is free of Liens.
8.4.3. CONDITION OF EQUIPMENT. The Equipment is in good operating
condition and repair, and all necessary replacements and repairs have been made
so that the value and operating efficiency of the Equipment is preserved at all
times, reasonable wear and tear excepted. Each Borrower shall ensure that the
Equipment is mechanically and structurally sound, and capable of performing the
functions for which it was designed, in accordance with the manufacturer's
published and recommended specifications. No Borrower shall permit any Equipment
to become affixed to real Property unless any landlord or mortgagee delivers a
Lien Waiver or similar instrument.
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8.5. ADMINISTRATION OF DEPOSIT ACCOUNTS; OTHER ACCOUNT MATTERS..
SCHEDULE 8.5 sets forth all Deposit Accounts maintained by Borrowers, including
all Dominion Accounts. Each Borrower shall take all actions necessary to
establish Agent's control of each such Deposit Account (other than an account
exclusively used for payroll, payroll taxes or employee benefits, or an account
containing not more that $10,000 at any time). Each Borrower shall be the sole
account holder of each Deposit Account and shall not allow any other Person
(other than Agent) to have control over a Deposit Account or any Property
deposited therein. Each Borrower shall promptly notify Agent of any opening or
closing of a Deposit Account and, with the consent of Agent, will amend SCHEDULE
8.5 to reflect same. Each U.S. Borrower shall maintain each of its lockbox and
collection accounts, and, where feasible, each of its disbursement accounts at
Bank of America. Borrowers shall cause all collected available funds in the
Kasco Lockbox Account to be transferred daily commencing on the Closing Date, to
Agent in accordance with wire transfer instructions from time to time provided
by Agent to Borrower Agent, and shall cause the Kasco Lockbox Account to be
transferred to Bank of America on or before April 6, 2007.
8.6. GENERAL PROVISIONS.
8.6.1. LOCATION OF COLLATERAL. All tangible items of Collateral,
other than Inventory in transit, shall at all times be kept by Borrowers at the
business locations set forth in SCHEDULE 8.6.1, except that Borrowers may (a)
make sales or other dispositions of Collateral in accordance with SECTION
10.2.7; and (b) move Collateral to another location in the United States, upon
30 Business Days prior written notice to Agent.
8.6.2. INSURANCE OF COLLATERAL; CONDEMNATION PROCEEDS.
(a) Each Borrower shall maintain insurance with respect to the
Collateral, covering casualty, hazard, public liability, theft, malicious
mischief, and such other risks, in such amounts, with such endorsements, and
with such insurers (rated A VII or better by A.M. Best Rating Guide) as are
satisfactory to Agent. All proceeds under each policy shall be payable to Agent.
From time to time upon request, Borrowers shall deliver to Agent the originals
or certified copies of its insurance policies and updated flood plain searches.
Unless Agent shall agree otherwise, each policy shall include satisfactory
endorsements (i) showing Agent as sole loss payee or additional insured, as
appropriate; (ii) requiring 30 days prior written notice to Agent in the event
of cancellation of the policy for any reason whatsoever; and (iii) specifying
that the interest of Agent shall not be impaired or invalidated by any act or
neglect of any Borrower or the owner of the Property, nor by the occupation of
the premises for purposes more hazardous than are permitted by the policy. If
any Borrower fails to provide and pay for such insurance, Agent may, at its
option, but shall not be required to, procure the insurance and charge Borrowers
therefor. Each Borrower agrees to deliver to Agent, promptly as rendered, copies
of all reports made to insurance companies. While no Event of Default exists,
Borrowers may settle, adjust or compromise any insurance claim, as long as the
proceeds are delivered to Agent. If an Event of Default exists, only Agent shall
be authorized to settle, adjust and compromise such claims.
(b) Any proceeds of insurance (other than proceeds from workers'
compensation or D&O insurance) and any awards arising from condemnation of any
Collateral shall be paid to Agent. Any such proceeds or awards that relate to
Inventory shall be applied to payment of the Revolver Loans, and then to any
other Obligations outstanding, other than Term Loans. Subject to clause (c)
below, any proceeds or awards that relate to Equipment or Real Estate shall be
applied first to Term Loans, then to Revolver Loans and then to other
Obligations.
(c) If requested by Borrowers in writing within 15 days after
Agent's receipt of any insurance proceeds or condemnation awards relating to any
loss or destruction of Equipment or Real Estate, Borrowers may use such proceeds
or awards to repair or replace such Equipment or Real Estate (and until so used,
the proceeds shall be held by Agent as Cash Collateral) as long as (i) no
Default or Event of Default exists; (ii) such repair or replacement is promptly
undertaken and concluded, in accordance with plans satisfactory to Agent; (iii)
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replacement buildings are constructed on the sites of the original casualties
and are of comparable size, quality and utility to the destroyed buildings; (iv)
the repaired or replaced Property is free of Liens, other than Permitted Liens
that are not Purchase Money Liens; (v) Borrowers comply with disbursement
procedures for such repair or replacement as Agent may reasonably require; and
(vi) the aggregate amount of such proceeds or awards from any single casualty or
condemnation does not exceed $7,000,000.
8.6.3. PROTECTION OF COLLATERAL. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes payable with respect to any Collateral (including any 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 Borrowers. Agent shall
not be liable or responsible in any way for the safekeeping of any Collateral,
for any loss or damage thereto (except for reasonable care in its custody while
Collateral is in Agent's actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency or other Person whatsoever, but the same shall be at Borrowers' sole
risk.
8.6.4. DEFENSE OF TITLE TO COLLATERAL. Each Borrower shall at all
times defend its title to Collateral and Agent's Liens therein against all
Persons, claims and demands whatsoever, except Permitted Liens.
8.7. POWER OF ATTORNEY. Each Borrower hereby irrevocably constitutes
and appoints Agent (and all Persons designated by Agent) as such Borrower's true
and lawful attorney (and agent-in-fact) for the purposes provided in this
Section. Agent, or Agent's designee, may, without notice and in either its or a
Borrower's name, but at the cost and expense of Borrowers:
(a) Endorse a Borrower's name on any Payment Item or other proceeds
of Collateral (including proceeds of insurance) that come into Agent's
possession or control; and
(b) During an Event of Default, (i) notify any Account Debtors of
the assignment of their Accounts, demand and enforce payment of Accounts, by
legal proceedings or otherwise, and generally exercise any rights and remedies
with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or
release any Accounts or other Collateral, or any legal proceedings brought to
collect Accounts or Collateral; (iii) sell or assign any Accounts and other
Collateral upon such terms, for such amounts and at such times as Agent deems
advisable; (iv) take control, in any manner, of any proceeds of Collateral; (v)
prepare, file and sign a Borrower's name to a proof of claim or other document
in a bankruptcy of an Account Debtor, or to any notice, assignment or
satisfaction of Lien or similar document; (vi) receive, open and dispose of mail
addressed to a Borrower, and notify postal authorities to change the address for
delivery thereof to such address as Agent may designate; (vii) endorse any
Chattel Paper, Document, Instrument, invoice, freight ▇▇▇▇, ▇▇▇▇ of lading, or
similar document or agreement relating to any Accounts, Inventory or other
Collateral; (viii) use a Borrower's stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (ix) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to any Collateral; (x) make and adjust
claims under policies of insurance; (xi) take any action as may be necessary or
appropriate to obtain payment under any letter of credit or banker's acceptance
for which a Borrower is a beneficiary; and (xii) take all other actions as Agent
deems appropriate to fulfill any Borrower's obligations under the Loan
Documents.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Agent and
Lenders to enter into this Agreement and to make available the Commitments,
Loans and Letters of Credit, each Borrower represents and warrants to the Credit
Parties that:
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9.1.1. ORGANIZATION AND QUALIFICATION. Each Borrower and Subsidiary
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each Borrower and Subsidiary is duly
qualified, authorized to do business and in good standing as a foreign
corporation in each jurisdiction where failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
9.1.2. POWER AND AUTHORITY. Each Obligor is duly authorized to
execute, deliver and perform its Loan Documents. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of Equity
Interests of any Obligor, other than those already obtained; (b) contravene the
Organic Documents of any Obligor; (c) violate or cause a default under any
Applicable Law or Material Contract; or (d) result in or require the imposition
of any Lien (other than Permitted Liens) on any Property of any Obligor.
9.1.3. ENFORCEABILITY. Each Loan Document is a legal, valid and
binding obligation of each Obligor party thereto, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.
9.1.4. CAPITAL STRUCTURE. SCHEDULE 9.1.4 shows, for each Borrower
and Subsidiary, its name, its jurisdiction of organization, its authorized and
issued Equity Interests, the holders of its Equity Interests, and all agreements
binding on such holders with respect to their Equity Interests. Each Borrower
has good title to its Equity Interests in its Subsidiaries, subject only to
Agent's Lien, and all such Equity Interests are duly issued, fully paid and
non-assessable. There are no outstanding options to purchase, warrants,
subscription rights, agreements to issue or sell, convertible interests, phantom
rights or powers of attorney relating to any Equity Interests of any Borrower or
Subsidiary.
9.1.5. CORPORATE NAMES; LOCATIONS. During the five years preceding
the Closing Date, except as shown on SCHEDULE 9.1.5, no Borrower or Subsidiary
has been known as or used any corporate, fictitious or trade names, has been the
surviving corporation of a merger or combination, or has acquired any
substantial part of the assets of any Person. The chief executive offices and
other places of business of Borrowers and Subsidiaries are shown on SCHEDULE
8.6.1. During the five years preceding the Closing Date, no Borrower or
Subsidiary has had any other office or place of business.
9.1.6. TITLE TO PROPERTIES; PRIORITY OF LIENS. Each Borrower and
Subsidiary has good and marketable title to (or valid leasehold interests in)
all of its Real Estate, and good title to all of its personal Property,
including all Property reflected in any financial statements delivered to Agent
or Lenders, in each case free of Liens except Permitted Liens. Each Borrower and
Subsidiary has paid and discharged all lawful claims that, if unpaid, could
become a Lien on its Properties, other than Permitted Liens. All Liens of Agent
in the Collateral are duly perfected, first priority Liens, subject only to
Permitted Liens that are expressly allowed to have priority over Agent's Liens.
9.1.7. ACCOUNTS. Agent may rely, in determining which Accounts are
Eligible Accounts, on all statements and representations made by Borrowers with
respect thereto. Borrowers warrant, with respect to each Account at the time it
is shown as an Eligible Account in a Borrowing Base Certificate, that:
(a) it is genuine and in all respects what it purports to be, and is
not evidenced by a judgment;
(b) it arises out of a completed, BONA FIDE sale and delivery of
goods or rendition of services in the Ordinary Course of Business, and
substantially in accordance with any purchase order, contract or other document
relating thereto;
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(c) it is for a sum certain, maturing as stated in the invoice
covering such sale or rendition of services, a copy of which has been furnished
or is available to Agent on request;
(d) it is not subject to any offset, Lien (other than Agent's Lien),
deduction, defense, dispute, counterclaim or other adverse condition except as
arising in the Ordinary Course of Business and disclosed to Agent; and it is
absolutely owing by the Account Debtor, without contingency in any respect;
(e) no purchase order, agreement, document or Applicable Law
restricts assignment of the Account to Agent (regardless of whether, under the
UCC, the restriction is ineffective);
(f) no extension, compromise, settlement, modification, credit,
deduction or return has been authorized with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business for prompt
payment that are reflected on the face of the invoice related thereto and in the
reports submitted to Agent hereunder; and
(g) to the best of Borrowers' knowledge, (i) there are no facts or
circumstances that are reasonably likely to impair the enforceability or
collectibility of such Account; (ii) the Account Debtor had the capacity to
contract when the Account arose, continues to meet the applicable Borrower's
customary credit standards, is Solvent, is not contemplating or subject to an
Insolvency Proceeding, and has not failed, or suspended or ceased doing
business; and (iii) there are no proceedings or actions threatened or pending
against any Account Debtor that could reasonably be expected to have a material
adverse effect on the Account Debtor's financial condition.
9.1.8. FINANCIAL STATEMENTS. The consolidated and consolidating
balance sheets, and related statements of income, cash flow and shareholder's
equity, of Borrowers and Subsidiaries that have been and are hereafter delivered
to Agent and Lenders, are prepared in accordance with GAAP, and fairly present
the financial positions and results of operations of Borrowers and Subsidiaries
at the dates and for the periods indicated. All projections delivered from time
to time to Agent and Lenders have been prepared in good faith, based on
reasonable assumptions in light of the circumstances at such time. Since
December 31, 2005, there has been no change in the condition, financial or
otherwise, of any Borrower or Subsidiary that could reasonably be expected to
have a Material Adverse Effect. No financial statement delivered to Agent or
Lenders at any time contains any untrue statement of a material fact, nor fails
to disclose any material fact necessary to make such statement not materially
misleading. Each Borrower and Subsidiary is Solvent.
9.1.9. SURETY OBLIGATIONS. No Borrower or Subsidiary is obligated as
surety or indemnitor under any bond or other contract that assures payment or
performance of any obligation of any Person, except as permitted hereunder.
9.1.10. TAXES. Each Borrower and Subsidiary has filed all federal,
state and local tax returns and other reports that it is required by law to
file, and has paid, or made provision for the payment of, all Taxes upon it, its
income and its Properties that are due and payable, except to the extent being
Properly Contested. The provision for Taxes on the books of each Borrower and
Subsidiary is adequate for all years not closed by applicable statutes, and for
its current Fiscal Year.
9.1.11. BROKERS. There are no brokerage commissions, finder's fees
or investment banking fees payable in connection with any transactions
contemplated by the Loan Documents.
9.1.12. INTELLECTUAL PROPERTY. Each Borrower and Subsidiary owns or
has the lawful right to use all Intellectual Property necessary for the conduct
of its business, without conflict with any rights of others. There is no pending
or, to any Borrower's knowledge, threatened Intellectual Property Claim with
respect to any Borrower, any Subsidiary or any of their Property (including any
Intellectual Property). Except as disclosed on SCHEDULE 9.1.12, no Borrower or
Subsidiary pays or owes any Royalty or other compensation to any Person with
respect to any Intellectual Property. All Intellectual Property owned, used or
licensed by, or otherwise subject to any interests of, any Borrower or
Subsidiary is shown on SCHEDULE 9.1.12.
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9.1.13. GOVERNMENTAL APPROVALS. Each Borrower and Subsidiary has, is
in compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties. All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and Borrowers and Subsidiaries have complied
with all foreign and domestic laws with respect to the shipment and importation
of any goods or Collateral, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
9.1.14. COMPLIANCE WITH LAWS. Each Borrower and Subsidiary has duly
complied, and its Properties and business operations are in compliance, in all
material respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. There have been no
citations, notices or orders of material noncompliance issued to any Borrower or
Subsidiary under any Applicable Law. No Inventory has been produced in violation
of the FLSA.
9.1.15. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on
SCHEDULE 9.1.15, no Borrower's or Subsidiary's past or present operations, Real
Estate or other Properties are subject to any federal, state or local
investigation to determine whether any remedial action is needed to address any
environmental pollution, hazardous material or environmental clean-up. No
Borrower or Subsidiary has received any Environmental Notice. No Borrower or
Subsidiary has any contingent liability with respect to any Environmental
Release, environmental pollution or hazardous material on any Real Estate now or
previously owned, leased or operated by it. The representations and warranties
contained in the Environmental Agreement are true and correct on the Closing
Date.
9.1.16. BURDENSOME CONTRACTS. No Borrower or Subsidiary is a party
or subject to any contract, agreement or charter restriction that could
reasonably be expected to have a Material Adverse Effect. No Borrower or
Subsidiary is party or subject to any Restrictive Agreement, except as shown on
SCHEDULE 9.1.16, none of which prohibit the execution or delivery of any Loan
Documents by an Obligor nor the performance by an Obligor of any obligations
thereunder.
9.1.17. LITIGATION. Except as shown on SCHEDULE 9.1.17, there are no
proceedings or investigations pending or, to any Borrower's knowledge,
threatened against any Borrower or Subsidiary, or any of their businesses,
operations, Properties, prospects or conditions, that (a) relate to any Loan
Documents or transactions contemplated thereby; or (b) could reasonably be
expected to have a Material Adverse Effect if determined adversely to any
Borrower or Subsidiary. No Borrower or Subsidiary is in default with respect to
any order, injunction or judgment of any Governmental Authority.
9.1.18. NO DEFAULTS. No event or circumstance has occurred or exists
that constitutes a Default or Event of Default. No Borrower or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default, under any
Material Contract or in the payment of any Borrowed Money. There is no basis
upon which any party (other than a Borrower or Subsidiary) could terminate a
Material Contract prior to its scheduled termination date.
9.1.19. ERISA. Except as disclosed on SCHEDULE 9.1.19, no Borrower
or Subsidiary has any Multiemployer Plan or Foreign Plan. Each Borrower and
Subsidiary is in full compliance with the requirements of all Applicable Law,
including ERISA, relating to each Multiemployer Plan and Foreign Plan. No fact
or situation exists that could reasonably be expected to result in a Material
Adverse Effect in connection with any Multiemployer Plan or Foreign Plan. No
Borrower or Subsidiary has any withdrawal liability in connection with a
Multiemployer Plan or Foreign Plan. All employer and employee contributions to
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Foreign Plans, to the extent required by law or the terms of such plans, have
been made or accrued in accordance with normal accounting principles. The fair
market value of the assets of each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through insurance and/or the book reserve
established for each Foreign Plan, together with any accrued contributions, are
sufficient to provide the accrued benefit obligations of all participants in
such plans according to the actuarial assumptions and valuations most recently
used to account for such obligations in accordance with applicable generally
accepted accounting principles. Each Foreign Plan required to be registered has
been registered and is maintained in good standing with all applicable
regulatory authorities.
9.1.20. TRADE RELATIONS. There exists no actual or threatened
termination, limitation or modification of any business relationship between any
Borrower or Subsidiary and any customer or supplier, or any group of customers
or suppliers, who individually or in the aggregate are material to the business
of such Borrower or Subsidiary. There exists no condition or circumstance that
could reasonably be expected to impair the ability of any Borrower or Subsidiary
to conduct its business at any time hereafter in substantially the same manner
as conducted on the Closing Date.
9.1.21. LABOR RELATIONS. Except as described on SCHEDULE 9.1.21, no
Borrower or Subsidiary is party to or bound by any collective bargaining
agreement, management agreement or consulting agreement. There are no material
grievances, disputes or controversies with any union or other organization of
any Borrower's or Subsidiary's employees, or, to any Borrower's knowledge, any
asserted or threatened strikes, work stoppages or demands for collective
bargaining.
9.1.22. PAYABLE PRACTICES. No Borrower or Subsidiary has made any
material change in its historical accounts payable practices from those in
effect on the Closing Date.
9.1.23. NOT A REGULATED ENTITY. No Obligor is (a) an "investment
company" or a "person directly or indirectly controlled by or acting on behalf
of an investment company" within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Federal Power Act, the Interstate
Commerce Act, any public utilities code or any other Applicable Law regarding
its authority to incur Debt.
9.1.24. MARGIN STOCK. No Borrower or Subsidiary is engaged,
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No Loan
proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or
to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock
or for any related purpose governed by Regulations T, U or X of the Board of
Governors.
9.1.25. PLAN ASSETS. No Borrower is an entity deemed to hold "plan
assets" within the meaning of 29 C.F.R. ss.2510.3-101 of any "employee benefit
plan" (as defined in Section 3(3) of ERISA) that is subject to Title I oF ERISA
or any "plan" (within the meaning of Section 4975 of the Internal Revenue Code),
and neither the execution of this Agreement nor the funding of any Loans gives
rise to a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
9.2. COMPLETE DISCLOSURE. No Loan Document contains any untrue
statement of a material fact, nor fails to disclose any material fact necessary
to make the statements contained therein not materially misleading. There is no
fact or circumstance that any Obligor has failed to disclose to Agent in writing
that could reasonably be expected to have a Material Adverse Effect.
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SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
10.1. AFFIRMATIVE COVENANTS. For so long as any Commitments or
Obligations are outstanding, each Borrower shall, and shall cause each
Subsidiary to:
10.1.1. INSPECTIONS; APPRAISALS.
(a) Permit Agent from time to time, subject (except when a Default
or Event of Default exists) to reasonable notice and normal business hours, to
visit and inspect the Properties of any Borrower or Subsidiary, inspect, audit
and make extracts from any Borrower's or Subsidiary's books and records, and
discuss with its officers, employees, agents, advisors and independent
accountants such Borrower's or Subsidiary's business, financial condition,
assets, prospects and results of operations. Lenders may participate in any such
visit or inspection, at their own expense. No Credit Party shall have any duty
to any Borrower to make any inspection, nor to share any results of any
inspection, appraisal or report with any Borrower. To the extent any appraisal
or other information is shared by Agent or a Lender with any Borrower, such
Borrower acknowledges that it was prepared by Agent and Lenders for their
purposes and Borrowers shall not be entitled to rely upon it.
(b) Reimburse Agent for all charges, costs and expenses of Agent in
connection with (i) examinations of any Obligor's books and records or any other
financial or Collateral matters as Agent deems appropriate, in the amount of
$15,000 for such examinations prior to the Closing Date and up to $15,000 per
Loan Year; (ii) appraisals of Inventory; and (iii) appraisals of Real Estate and
Equipment and environmental site assessments of Real Estate in excess of the
Initial Real Estate Assessments Costs; PROVIDED, HOWEVER, that if an examination
or appraisal is initiated during a Default or Event of Default, all charges,
costs and expenses therefor shall be reimbursed by Borrowers without regard to
such limits. Subject to the foregoing, Borrowers shall pay Agent's then standard
charges for each day that an employee of Agent or its Affiliates is engaged in
any examination activities, and shall pay the standard charges of Agent's
internal appraisal group. This Section shall not be construed to limit Agent's
right to conduct examinations or to obtain appraisals at any time in its
discretion, nor to use third parties for such purposes.
10.1.2. FINANCIAL AND OTHER INFORMATION. Keep adequate records and
books of account with respect to its business activities, in which proper
entries are made in accordance with GAAP reflecting all financial transactions;
and furnish to Agent and Lenders:
(a) as soon as available, and in any event within 105 days after the
close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and
the related statements of income, cash flow and shareholders' equity for such
Fiscal Year, on consolidated and consolidating bases for Borrowers and
Subsidiaries, which consolidated statements shall be audited and certified
(without qualification as to scope, "going concern" or similar items) by a firm
of independent certified public accountants of recognized standing selected by
Borrowers and acceptable to Agent, and shall set forth in comparative form
corresponding figures for the preceding Fiscal Year and other information
acceptable to Agent;
(b) as soon as available, and in any event within 30 days after the
end of each month (but within 45 days after the last month in a Fiscal Year),
unaudited balance sheets as of the end of such month and the related statements
of income and cash flow for such month and for the portion of the Fiscal Year
then elapsed, on consolidated and consolidating bases for Borrowers and
Subsidiaries, setting forth in comparative form corresponding figures for the
preceding Fiscal Year and certified by the chief financial officer of Borrower
Agent as prepared in accordance with GAAP and fairly presenting the financial
position and results of operations for such month and period, subject to normal
year-end adjustments and the absence of footnotes;
(c) concurrently with delivery of financial statements under clauses
(a) and (b) above, or more frequently if requested by Agent while a Default or
Event of Default exists, a Compliance Certificate executed by the chief
financial officer of Borrower Agent;
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(d) concurrently with delivery of financial statements under clause
(a) above, copies of all management letters and other material reports submitted
to Borrowers by their accountants in connection with such financial statements;
(e) not later than 30 days prior to the end of each Fiscal Year,
projections of Borrowers' consolidated balance sheets, results of operations,
cash flow and Availability for the next Fiscal Year, month by month;
(f) at Agent's request, a listing of each Borrower's trade payables,
specifying the trade creditor and balance due, and a detailed trade payable
aging, all in form satisfactory to Agent;
(g) promptly after the sending or filing thereof, copies of any
proxy statements, financial statements or reports that any Borrower has made
generally available to its shareholders; copies of any regular, periodic and
special reports or registration statements or prospectuses that any Borrower
files with the Securities and Exchange Commission or any other Governmental
Authority, or any securities exchange; and copies of any press releases or other
statements made available by a Borrower to the public concerning material
changes to or developments in the business of such Borrower;
(h) promptly after the sending or filing thereof, copies of any
annual report to be filed in connection with each Plan or Foreign Plan;
(i) such other reports and information (financial or otherwise) as
Agent may request from time to time in connection with any Collateral or any
Borrower's, Subsidiary's or other Obligor's financial condition or business; and
10.1.3. NOTICES. Notify Agent and Lenders in writing, promptly after
a Borrower's obtaining knowledge thereof, of any of the following that affects
an Obligor: (a) the threat or commencement of any proceeding or investigation,
whether or not covered by insurance, if an adverse determination could have a
Material Adverse Effect; (b) any pending or threatened labor dispute, strike or
walkout, or the expiration of any material labor contract; (c) any default under
or termination of a Material Contract; (d) the existence of any Default or Event
of Default; (e) any judgment in an amount exceeding $250,000; (f) the assertion
of any Intellectual Property Claim, if an adverse resolution could have a
Material Adverse Effect; (g) any violation or asserted violation of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an
adverse resolution could have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased or occupied by an
Obligor; or receipt of any Environmental Notice; (i) the discharge of or any
withdrawal or resignation by Borrowers' independent accountants; or (j) any
opening of a new office or place of business, at least 30 days prior to such
opening.
10.1.4. LANDLORD AND STORAGE AGREEMENTS. Upon request, provide Agent
with copies of all existing agreements, and promptly after execution thereof
provide Agent with copies of all future agreements, between an Obligor and any
landlord, warehouseman, processor, shipper, bailee or other Person that owns any
premises at which any Collateral may be kept or that otherwise may possess or
handle any Collateral.
10.1.5. COMPLIANCE WITH LAWS. Comply with all Applicable Laws,
including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws
regarding collection and payment of Taxes, and maintain all Governmental
Approvals necessary to the ownership of its Properties or conduct of its
business, unless failure to comply (other than failure to comply with
Anti-Terrorism Laws) or maintain could not reasonably be expected to have a
Material Adverse Effect. Without limiting the generality of the foregoing, if
any Environmental Release occurs at or on any Properties of any Borrower or
Subsidiary, it shall act promptly and diligently to investigate and report to
Agent and all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, whether or
not directed to do so by any Governmental Authority.
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10.1.6. TAXES. Pay and discharge all Taxes prior to the date on
which they become delinquent or penalties attach, unless such Taxes are being
Properly Contested.
10.1.7. INSURANCE. In addition to the insurance required hereunder
with respect to Collateral, maintain insurance with insurers (rated A VII or
better by Best Rating Guide) satisfactory to Agent, (a) with respect to the
Properties and business of Borrowers and Subsidiaries of such type (including
product liability, workers' compensation, larceny, embezzlement, or other
criminal misappropriation insurance), in such amounts, and with such coverages
and deductibles as are customary for companies similarly situated, and (b)
business interruption insurance in an amount, with deductibles and subject to an
Insurance Assignment satisfactory to Agent.
10.1.8. LICENSES. Keep each License affecting any Collateral
(including the manufacture, distribution or disposition of Inventory) or any
other material Property of Borrowers and Subsidiaries in full force and effect;
promptly notify Agent of any proposed modification to any such License, or entry
into any new License, in each case at least 30 days prior to its effective date;
pay all Royalties when due; and notify Agent of any default or breach asserted
by any Person to have occurred under any License.
10.1.9. FUTURE SUBSIDIARIES. Promptly notify Agent upon any Person
becoming a Subsidiary and, if such Person is not a Foreign Subsidiary, cause it
to guaranty the Obligations in a manner satisfactory to Agent, and to execute
and deliver such documents, instruments and agreements and to take such other
actions as Agent shall require to evidence and perfect a Lien in favor of Agent
(for the benefit of Secured Parties) on all assets of such Person, including
delivery of such legal opinions, in form and substance satisfactory to Agent, as
it shall deem appropriate.
10.1.10. POST-CLOSING OBLIGATIONS.
(a) On or before December 8, 2006, Borrowers shall deliver to Agent
a Lien Waiver, duly executed by the landlord for Borrower's leased premises
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇.
(b) On or before December 8, 2006, Borrowers shall deliver to Agent
and Agent shall have received and found acceptable zoning endorsements with
respect to Borrowers' Real Estate and improvements thereon located in Bear,
Delaware and Atlanta, Georgia (other than the Acquired Residential Properties).
10.2. NEGATIVE COVENANTS. For so long as any Commitments or
Obligations are outstanding, each Borrower shall not, and shall cause each
Subsidiary not to:
10.2.1. PERMITTED DEBT. Create, incur, guarantee or suffer to exist
any Debt, except:
(a) the Obligations;
(b) Subordinated Debt;
(c) Permitted Purchase Money Debt;
(d) Borrowed Money (other than the Obligations, Subordinated Debt
and Permitted Purchase Money Debt), but only to the extent outstanding on the
Closing Date and not satisfied with proceeds of the initial Loans;
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(e) Bank Product Debt;
(f) Debt that is in existence when a Person becomes a Subsidiary or
that is secured by an asset when acquired by a Borrower or Subsidiary, as long
as such Debt was not incurred in contemplation of such Person becoming a
Subsidiary or such acquisition, and does not exceed $1,000,000 in the aggregate
at any time;
(g) Permitted Contingent Obligations;
(h) Refinancing Debt as long as each Refinancing Condition is
satisfied; and
(i) Debt that is not included in any of the preceding clauses of
this Section, is not secured by a Lien and does not exceed $1,000,000 in the
aggregate at any time.
10.2.2. PERMITTED LIENS. Create or suffer to exist any Lien upon any
of its Property, except the following (collectively, "PERMITTED LIENS"):
(a) Liens in favor of Agent;
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
(c) Liens for Taxes not yet due or being Properly Contested;
(d) statutory Liens (other than Liens for Taxes or imposed under
ERISA) arising in the Ordinary Course of Business, but only if (i) payment of
the obligations secured thereby is not yet due or is being Properly Contested,
and (ii) such Liens do not materially impair the value or use of the Property or
materially impair operation of the business of any Borrower or Subsidiary;
(e) Liens incurred or deposits made in the Ordinary Course of
Business to secure the performance of tenders, bids, leases, contracts (except
those relating to Borrowed Money), statutory obligations and other similar
obligations, or arising as a result of progress payments under government
contracts, as long as such Liens are at all times junior to Agent's Liens;
(f) Liens arising by virtue of a judgment or judicial order against
any Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as long
as such Liens are (i) in existence for less than 20 consecutive days or being
Properly Contested, and (ii) at all times junior to Agent's Liens;
(g) easements, rights-of-way, restrictions, covenants or other
agreements of record, and other similar charges or encumbrances on Real Estate,
that do not secure any monetary obligation and do not interfere with the
Ordinary Course of Business;
(h) normal and customary rights of setoff upon deposits in favor of
depository institutions, and Liens of a collecting bank on Payment Items in the
course of collection; and
(i) existing Liens shown on SCHEDULE 10.2.2.
10.2.3. [RESERVED.]
10.2.4. DISTRIBUTIONS. Declare or make any Distributions, except (i)
Upstream Payments; and (ii) subject to the satisfaction of the Distribution
Conditions, additional Distributions.
10.2.5. UPSTREAM PAYMENTS. Create or suffer to exist any encumbrance
or restriction on the ability of a Subsidiary to make any Upstream Payment,
except for restrictions under the Loan Documents, under Applicable Law or in
effect on the Closing Date as shown on SCHEDULE 9.1.16.
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10.2.6. RESTRICTED INVESTMENTS. Make any Restricted Investment.
10.2.7. DISPOSITION OF ASSETS. Make any Asset Disposition, except a
Permitted Asset Disposition, a disposition of Equipment under SECTION 8.4.2, or
a transfer of Property by a Subsidiary or Obligor to a Borrower.
10.2.8. LOANS. Make any loans or other advances of money to any
Person, except (a) advances to an officer or employee for salary, travel
expenses, commissions and similar items in the Ordinary Course of Business; (b)
prepaid expenses and extensions of trade credit made in the Ordinary Course of
Business; (c) deposits with financial institutions permitted hereunder; and (d)
as long as no Default or Event of Default exists, (i) intercompany loans by a
Borrower to another Borrower, and (ii) intercompany loans by any Obligor to an
Affiliate that is not an Obligor and LC Obligations of a Borrower incurred for
the benefit of an Affiliate that is not an Obligor in the aggregate amount of
$8,000,000 at any time outstanding.
10.2.9. RESTRICTIONS ON PAYMENT OF CERTAIN DEBT. Make any payments
(whether voluntary or mandatory, or a prepayment, redemption, retirement,
defeasance or acquisition) with respect to any (a) Subordinated Debt, except
regularly scheduled payments of principal, interest and fees, but only to the
extent permitted under any subordination agreement relating to such Debt (and a
Senior Officer of Borrower Agent shall certify to Agent, not less than five
Business Days prior to the date of payment, that all conditions under such
agreement have been satisfied); or (b) Borrowed Money (other than the
Obligations) prior to its due date under the agreements evidencing such Debt as
in effect on the Closing Date (or as amended thereafter with the consent of
Agent).
10.2.10. FUNDAMENTAL CHANGES. Merge, combine or consolidate with any
Person, or liquidate, wind up its affairs or dissolve itself, in each case
whether in a single transaction or in a series of related transactions, except
for mergers or consolidations of a wholly-owned Subsidiary with another
wholly-owned Subsidiary or into a Borrower; change its name or conduct business
under any fictitious name; change its tax, charter or other organizational
identification number; or change its form or state of organization.
10.2.11. SUBSIDIARIES. Form or acquire any Subsidiary after the
Closing Date, except in accordance with SECTIONS 10.1.9 and 10.2.6; or permit
any existing Subsidiary to issue any additional Equity Interests except
director's qualifying shares.
10.2.12. ORGANIC DOCUMENTS. Amend, modify or otherwise change any of
its Organic Documents as in effect on the Closing Date.
10.2.13. TAX CONSOLIDATION. File or consent to the filing of any
consolidated income tax return with any Person other than Borrowers and
Subsidiaries.
10.2.14. ACCOUNTING CHANGES. Make any material change in accounting
treatment or reporting practices, except as required by GAAP and in accordance
with SECTION 1.2; or change its Fiscal Year.
10.2.15. RESTRICTIVE AGREEMENTS. Become a party to any Restrictive
Agreement, except (a) a Restrictive Agreement as in effect on the Closing Date
and shown on SCHEDULE 9.1.16; (b) a Restrictive Agreement relating to secured
Debt permitted hereunder, if such restrictions apply only to the collateral for
such Debt; and (c) customary provisions in leases and other contracts
restricting assignment thereof.
10.2.16. HEDGING AGREEMENTS. Enter into any Hedging Agreement,
except to hedge risks arising in the Ordinary Course of Business and not for
speculative purposes.
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10.2.17. CONDUCT OF BUSINESS. Engage in any business, other than its
business as conducted on the Closing Date and any activities incidental thereto.
10.2.18. AFFILIATE TRANSACTIONS. Enter into or be party to any
transaction with an Affiliate, except (a) transactions contemplated by the Loan
Documents; (b) payment of reasonable compensation to officers and employees for
services actually rendered, and loans and advances permitted by SECTION 10.2.8;
(c) payment of customary directors' fees and indemnities; (d) transactions
solely among Borrowers; (e) transactions with Affiliates that were consummated
prior to the Closing Date, as shown on SCHEDULE 10.2.18; and (f) transactions
with Affiliates in the Ordinary Course of Business, upon fair and reasonable
terms fully disclosed to Agent and no less favorable than would be obtained in a
comparable arm's-length transaction with a non-Affiliate.
10.2.19. PLANS. Become party to any Multiemployer Plan or Foreign
Plan, other than any in existence on the Closing Date.
10.2.20. AMENDMENTS TO SUBORDINATED DEBT. Amend, supplement or
otherwise modify any document, instrument or agreement relating to any
Subordinated Debt, if such modification (a) increases the principal balance of
such Debt, or increases any required payment of principal or interest; (b)
accelerates the date on which any installment of principal or any interest is
due, or adds any additional redemption, put or prepayment provisions; (c)
shortens the final maturity date or otherwise accelerates amortization; (d)
increases the interest rate; (e) increases or adds any fees or charges; (f)
modifies any covenant in a manner or adds any representation, covenant or
default that is more onerous or restrictive in any material respect for any
Borrower or Subsidiary, or that is otherwise materially adverse to any Borrower,
any Subsidiary or Lenders; or (g) results in the Obligations not being fully
benefited by the subordination provisions thereof.
10.3. FINANCIAL COVENANTS. For so long as any Commitments or Obligations
are outstanding, Borrowers shall maintain a Fixed Charge Coverage Ratio of not
less than 1.0 to 1.0.
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1. EVENTS OF DEFAULT. Each of the following shall be an "EVENT OF
DEFAULT" hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:
(a) Any Borrower fails to pay any Obligations when due (whether at
stated maturity, on demand, upon acceleration or otherwise);
(b) Any representation, warranty or other written statement of any
Obligor made in connection with any Loan Documents or transactions contemplated
thereby is incorrect or misleading in any material respect when given;
(c) Any Borrower breaches or fail to perform any covenant contained
in SECTION 7.2, 7.3, 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.2 or
10.3;
(d) Any Obligor breaches or fails to perform any other covenant
contained in any Loan Documents, and such breach or failure is not cured within
15 days after a Senior Officer of such Obligor has knowledge thereof or receives
notice thereof from Agent, whichever is sooner; PROVIDED, HOWEVER, that such
notice and opportunity to cure shall not apply if the breach or failure to
perform is not capable of being cured within such period or is a willful breach
by an Obligor;
(e) Any Guarantor repudiates, revokes or attempts to revoke its
Guaranty; any Obligor denies or contests the validity or enforceability of any
Loan Documents or Obligations, or the perfection or priority of any Lien granted
to Agent; or any Loan Document ceases to be in full force or effect for any
reason (other than a waiver or release by Agent and Lenders);
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(f) Any breach or default of an Obligor occurs under any document,
instrument or agreement to which it is a party or by which it or any of its
Properties is bound, relating to any Debt (other than the Obligations) in excess
of $250,000, if the maturity of or any payment with respect to such Debt may be
accelerated or demanded due to such breach;
(g) Any judgment or order for the payment of money is entered
against an Obligor in an amount that exceeds, individually or cumulatively with
all unsatisfied judgments or orders against all Obligors, $250,000 (net of any
insurance coverage therefor acknowledged in writing by the insurer), unless a
stay of enforcement of such judgment or order is in effect, by reason of a
pending appeal or otherwise;
(h) Any loss, theft, damage or destruction occurs with respect to
any Collateral if the amount not covered by insurance exceeds the greater of (i)
$500,000 or (ii) the amount of Borrowers' self-insured retention with respect to
its property and casualty insurance, PROVIDED THAT such amount shall not exceed
the amount of which Borrowers shall have given written notice to Agent not less
than 30 days prior to the date of such self insured retention amount becoming
effective;
(i) Any Obligor is enjoined, restrained or in any way prevented by
any Governmental Authority from conducting any material part of its business;
any Obligor suffers the loss, revocation or termination of any material license,
permit, lease or agreement necessary to its business; there is a cessation of
any material part of an Obligor's business for a material period of time; any
material Collateral or Property of an Obligor is taken or impaired through
condemnation; any Obligor agrees to or commences any liquidation, dissolution or
winding up of its affairs; or any Obligor ceases to be Solvent;
(j) Any Insolvency Proceeding is commenced by any Obligor; an
Insolvency Proceeding is commenced against any Obligor and: such Obligor
consents to the institution of the proceeding against it, the petition
commencing the proceeding is not timely controverted by such Obligor, such
petition is not dismissed within 30 days after its filing, or an order for
relief is entered in the proceeding; a trustee (including an interim trustee) is
appointed to take possession of any substantial Property of or to operate any of
the business of any Obligor; or any Obligor makes an offer of settlement,
extension or composition to its unsecured creditors generally;
(k) A Reportable Event occurs that constitutes grounds for
termination by the Pension Benefit Guaranty Corporation of any Multiemployer
Plan or appointment of a trustee for any Multiemployer Plan; any Multiemployer
Plan is terminated or any such trustee is requested or appointed; any Obligor is
in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from any withdrawal therefrom; or any
event similar to the foregoing occurs or exists with respect to a Foreign Plan;
(l) Any Obligor or any of its Senior Officers is criminally indicted
or convicted for (i) a felony committed in the conduct of such Obligor's
business, or (ii) any state or federal law (including the Controlled Substances
Act, Money Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act) that could lead to forfeiture of any material Property or any
Collateral; or
(m) A Change of Control occurs; or any event occurs or condition
exists that has a Material Adverse Effect;
11.2. REMEDIES UPON DEFAULT. If an Event of Default described in
SECTION 11.1(J) occurs with respect to any Borrower, then to the extent
permitted by Applicable Law, all Obligations shall become automatically due and
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payable and all Commitments shall terminate, without any action by Agent or
notice of any kind. In addition, or if any other Event of Default exists, Agent
may in its discretion (and shall upon written direction of Required Lenders) do
any one or more of the following from time to time:
(a) declare any Obligations immediately due and payable, whereupon
they shall be due and payable without diligence, presentment, demand, protest or
notice of any kind, all of which are hereby waived by Borrowers to the fullest
extent permitted by law;
(b) terminate, reduce or condition any Commitment, or make any
adjustment to the Borrowing Base;
(c) require Obligors to Cash Collateralize LC Obligations, Bank
Product Debt and other Obligations that are contingent or not yet due and
payable, and, if Obligors fail promptly to deposit such Cash Collateral, Agent
may (and shall upon the direction of Required Lenders) advance the required Cash
Collateral as Revolver Loans (whether or not an Overadvance exists or is created
thereby, or the conditions in SECTION 6 are satisfied); and
(d) exercise any other rights or remedies afforded under any
agreement, by law, at equity or otherwise, including the rights and remedies of
a secured party under the UCC. Such rights and remedies include the rights to
(i) take possession of any Collateral; (ii) require Borrowers to assemble
Collateral, at Borrowers' expense, and make it available to Agent at a place
designated by Agent; (iii) enter any premises where Collateral is located and
store Collateral on such premises until sold (and if the premises are owned or
leased by a Borrower, Borrowers agree not to charge for such storage); and (iv)
sell or otherwise dispose of any Collateral in its then condition, or after any
further manufacturing or processing thereof, at public or private sale, with
such notice as may be required by Applicable Law, in lots or in bulk, at such
locations, all as Agent, in its discretion, deems advisable. Each Borrower
agrees that 10 days notice of any proposed sale or other disposition of
Collateral by Agent shall be reasonable. Agent shall have the right to conduct
such sales on any Obligor's premises, without charge, and such sales may be
adjourned from time to time in accordance with Applicable Law. Agent shall have
the right to sell, lease or otherwise dispose of any Collateral for cash, credit
or any combination thereof, and Agent may purchase any Collateral at public or,
if permitted by law, private sale and, in lieu of actual payment of the purchase
price, may set off the amount of such price against the Obligations.
11.3. LICENSE. Agent is hereby granted an irrevocable, non-exclusive
license or other right to use, license or sub-license (without payment of
royalty or other compensation to any Person) any or all Intellectual Property of
Borrowers, computer hardware and software, trade secrets, brochures, customer
lists, promotional and advertising materials, labels, packaging materials and
other Property, in advertising for sale, marketing, selling, collecting,
completing manufacture of, or otherwise exercising any rights or remedies with
respect to, any Collateral. Each Borrower's rights and interests under
Intellectual Property shall inure to Agent's benefit.
11.4. SETOFF. Agent, Lenders and their Affiliates are each
authorized by Borrowers at any time during an Event of Default, without notice
to Borrowers or any other Person, to set off and to appropriate and apply any
deposits (general or special), funds, claims, obligations, liabilities or other
Debt at any time held or owing by Agent, any Lender or any such Affiliate to or
for the account of any Obligor against any Obligations, whether or not demand
for payment of such Obligation has been made, any Obligations have been declared
due and payable, are then due, or are contingent or unmatured, or the Collateral
or any guaranty or other security for the Obligations is adequate.
11.5. REMEDIES CUMULATIVE; NO WAIVER.
11.5.1. CUMULATIVE RIGHTS. All covenants, conditions, provisions,
warranties, guaranties, indemnities and other undertakings of Borrowers
contained in the Loan Documents are cumulative and not in derogation or
substitution of each other. In particular, the rights and remedies of Credit
Parties are cumulative, may be exercised at any time and from time to time,
concurrently or in any order, and shall not be exclusive of any other rights or
remedies that any Credit Party may have, whether under any agreement, by law, at
equity or otherwise.
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11.5.2. WAIVERS. The failure or delay of any Credit Party to require
strict performance by Borrowers with any terms of the Loan Documents, or to
exercise any rights or remedies with respect to Collateral or otherwise, shall
not operate as a waiver thereof nor as establishment of a course of dealing. All
rights and remedies shall continue in full force and effect until Full Payment
of all Obligations. No modification of any terms of any Loan Documents
(including any waiver thereof) shall be effective, unless such modification is
specifically provided in a writing directed to Borrowers and executed by Agent
or the requisite Lenders, and such modification shall be applicable only to the
matter specified. No waiver of any Default or Event of Default shall constitute
a waiver of any other Default or Event of Default that may exist at such time,
unless expressly stated. If any Credit Party accepts performance by any Obligor
under any Loan Documents in a manner other than that specified therein, or
during any Default or Event of Default, or if any Credit Party shall delay or
exercise any right or remedy under any Loan Documents, such acceptance, delay or
exercise shall not operate to waive any Default or Event of Default nor to
preclude exercise of any other right or remedy. It is expressly acknowledged by
Borrowers that any failure to satisfy a financial covenant on a measurement date
shall not be cured or remedied by satisfaction of such covenant on a subsequent
date.
11.6. JUDGMENT CURRENCY. If, for the purpose of obtaining judgment
in any court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Agreement in Dollars or in any other currency
(hereinafter in this SECTION 11.6 called the "first currency") into any other
currency (hereinafter in this SECTION 11.6 called the "second currency"), then
the conversion shall be made at Agent's spot rate of exchange for buying the
first currency with the second currency prevailing at the Agent's close of
business on the Business Day next preceding the day on which the judgment is
given or (as the case may be) the order is made. Any payment made by a Borrower
to any Credit Party pursuant to this Agreement in the second currency shall
constitute a discharge of the obligations of Borrowers to pay to such Credit
Party any amount originally due to the Credit Party in the first currency under
this Agreement only to the extent of the amount of the first currency which such
Credit Party is able, on the date of the receipt by it of such payment in any
second currency, to purchase, in accordance with such Credit Party's normal
banking procedures, with the amount of such second currency so received. If the
amount of the first currency falls short of the amount originally due to such
Credit Party in the first currency under this Agreement, the other Borrowers
agree that they will indemnify each Credit Party against and save such Credit
Party harmless from any shortfall so arising. This indemnity shall constitute an
obligation of each such Borrower separate and independent from the other
obligations contained in this Agreement, shall give rise to a separate and
independent cause of action and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum or sums in respect of
amounts due to any Credit Party under any Loan Documents or under any such
judgment or order. Any such shortfall shall be deemed to constitute a loss
suffered by such Credit Party and Borrowers shall not be entitled to require any
proof or evidence of any actual loss. The covenants contained in this SECTION
11.6 shall survive the Full Payment of the Obligations under this Agreement.
SECTION 12. AGENT
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT.
12.1.1. APPOINTMENT AND AUTHORITY. Each Lender appoints and
designates Bank of America as Agent hereunder. Agent may, and each Lender
authorizes Agent to, enter into all Loan Documents to which Agent is intended to
be a party and accept all Security Documents, for Agent's benefit and the Pro
Rata benefit of Lenders. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the provisions of the Loan Documents, and
the exercise by Agent or Required Lenders of any rights or remedies set forth
therein, together with all other powers reasonably incidental thereto, shall be
authorized and binding upon all Lenders. Without limiting the generality of the
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foregoing, Agent shall have the sole and exclusive authority to (a) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with the Loan Documents; (b) execute and
deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties for
purposes of perfecting and administering Liens under the Loan Documents, and for
all other purposes stated therein; (d) manage, supervise or otherwise deal with
Collateral; and (e) exercise all rights and remedies given to Agent with respect
to any Collateral under the Loan Documents, Applicable Law or otherwise. The
duties of Agent shall be ministerial and administrative in nature, and Agent
shall not have a fiduciary relationship with any Lender, Secured Party,
Participant or other Person, by reason of any Loan Document or any transaction
relating thereto. Agent alone shall be authorized to determine whether any
Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or
whether to impose or release any reserve, which determinations and judgments, if
exercised in good faith, shall exonerate Agent from liability to any Lender or
other Person for any error in judgment.
12.1.2. DUTIES. Agent shall not have any duties except those
expressly set forth in the Loan Documents, nor be required to initiate or
conduct any Enforcement Action except to the extent directed to do so by
Required Lenders while an Event of Default exists. The conferral upon Agent of
any right shall not imply a duty on Agent's part to exercise such right, unless
instructed to do so by Required Lenders in accordance with this Agreement.
12.1.3. AGENT PROFESSIONALS. Agent may perform its duties through
agents and employees. Agent may consult with and employ Agent Professionals, 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 an Agent Professional. Agent
shall not be responsible for the negligence or misconduct of any agents,
employees or Agent Professionals selected by it with reasonable care.
12.1.4. INSTRUCTIONS OF REQUIRED LENDERS. The rights and remedies
conferred upon Agent under the Loan Documents may be exercised without the
necessity of joinder of any other party, unless required by Applicable Law.
Agent may request instructions from Required Lenders with respect to any act
(including the failure to act) in connection with any Loan Documents, and may
seek assurances to its satisfaction from Lenders of their indemnification
obligations under SECTION 12.6 against all Claims that could be incurred by
Agent in connection with any act. Agent shall be entitled to refrain from any
act until it has received such instructions or assurances, and Agent shall not
incur liability to any Person by reason of so refraining. Instructions of
Required Lenders shall be binding upon all Lenders, and no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting in accordance with the instructions of Required Lenders.
Notwithstanding the foregoing, instructions by and consent of all Lenders shall
be required in the circumstances described in SECTION 14.1.1, and in no event
shall Required Lenders, without the prior written consent of each Lender, direct
Agent to accelerate and demand payment of Loans held by one Lender without
accelerating and demanding payment of all other Loans, nor to terminate the
Commitments of one Lender without terminating the Commitments of all Lenders. In
no event shall Agent be required to take any action that, in its opinion, is
contrary to Applicable Law or any Loan Documents or could subject any Agent
Indemnitee to personal liability.
12.2. AGREEMENTS REGARDING COLLATERAL AND FIELD EXAMINATION REPORTS.
12.2.1. LIEN RELEASES; CARE OF COLLATERAL. Lenders authorize Agent
to release any Lien with respect to any Collateral (a) upon Full Payment of the
Obligations, (b) that is the subject of an Asset Disposition which Borrowers
certify in writing to Agent is a Permitted Asset Disposition or a Lien which
Borrowers certify is a Permitted Lien entitled to priority over Agent's Liens
(and Agent may rely conclusively on any such certificate without further
inquiry), (c) that does not constitute a material part of the Collateral, or (d)
with the written consent of all Lenders. Agent shall have no obligation
whatsoever to any Lenders to assure that any Collateral exists or is owned by a
Borrower, or is cared for, protected, insured or encumbered, nor to assure that
Agent's Liens have been properly created, perfected or enforced, or are entitled
to any particular priority, nor to exercise any duty of care with respect to any
Collateral.
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12.2.2. POSSESSION OF COLLATERAL. Agent and Lenders appoint each
other Lender as agent for the purpose of perfecting Liens (for the benefit of
Secured Parties) in any Collateral that, under the UCC or other Applicable Law,
can be perfected by possession. If any Lender obtains possession of any such
Collateral, it shall notify Agent thereof and, promptly upon Agent's request,
deliver such Collateral to Agent or otherwise deal with such Collateral in
accordance with Agent's instructions.
12.2.3. REPORTS. Agent shall promptly, upon receipt thereof, forward
to each Lender copies of the results of any field audit or other examination or
any appraisal prepared by or on behalf of Agent with respect to any Obligor or
Collateral ("REPORT"). Each Credit Party agrees (a) that neither Bank of America
nor Agent makes any representation or warranty as to the accuracy or
completeness of any Report, and shall not be liable for any information
contained in or omitted from any Report; (b) that the Reports are not intended
to be comprehensive audits or examinations, and that Agent or any other Person
performing any audit or examination will inspect only specific information
regarding Obligations or the Collateral and will rely significantly upon
Borrowers' books and records as well as upon representations of Borrowers'
officers and employees; and (c) to keep all Reports confidential and strictly
for such Credit Party's internal use, and not to distribute any Report (or the
contents thereof) to any Person (except to such Credit Party's Participants,
attorneys and accountants) or use any Report in any manner other than
administration of the Loans and other Obligations. Each Credit Party agrees to
indemnify and hold harmless Agent and any other Person preparing a Report from
any action such Credit Party may take as a result of or any conclusion it may
draw from any Report, as well as any Claims arising in connection with any third
parties that obtain all or any part of a Report through such Credit Party.
12.3. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or
e-mail) believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and upon the advice and statements of Agent
Professionals.
12.4. ACTION UPON DEFAULT. Agent shall not be deemed to have
knowledge of any Default or Event of Default unless it has received written
notice from a Lender or Borrower specifying the occurrence and nature thereof.
If any Lender acquires knowledge of a Default or Event of Default, it shall
promptly notify Agent and the other Lenders thereof in writing. Each Lender
agrees that, except as otherwise provided in any Loan Documents or with the
written consent of Agent and Required Lenders, it will not take any Enforcement
Action, accelerate its Obligations, or exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC
sales or other similar dispositions of Collateral. Notwithstanding the
foregoing, however, a Lender may take action to preserve or enforce its rights
against an Obligor where a deadline or limitation period is applicable that
would, absent such action, bar enforcement of Obligations held by such Lender,
including the filing of proofs of claim in an Insolvency Proceeding.
12.5. RATABLE SHARING. If any Lender shall obtain any payment or
reduction of any Obligation, whether through set-off or otherwise, in excess of
its share of such Obligation, determined on a Pro Rata basis or in accordance
with SECTION 5.6.1, as applicable, such Lender shall forthwith purchase from
Agent, Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with SECTION 5.6.1, as
applicable. If any of such payment or reduction is thereafter recovered from the
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
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12.6. INDEMNIFICATION OF AGENT INDEMNITEES.
12.6.1. INDEMNIFICATION. EACH LENDER SHALL INDEMNIFY AND HOLD
HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT
WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE. If Agent is sued by any receiver, trustee
in bankruptcy, debtor-in-possession or other Person for any alleged preference
from an Obligor or fraudulent transfer, then any monies paid by Agent in
settlement or satisfaction of such proceeding, together with all interest, costs
and expenses (including attorneys' fees) incurred in the defense of same, shall
be promptly reimbursed to Agent by Lenders to the extent of each Lender's Pro
Rata share.
12.6.2. PROCEEDINGS. Without limiting the generality of the
foregoing, if at any time (whether prior to or after the Commitment Termination
Date) any proceeding is brought against any Agent Indemnitees by an Obligor, or
any Person claiming through an Obligor, to recover damages for any act taken or
omitted by Agent in connection with any Obligations, Collateral, Loan Documents
or matters relating thereto, or otherwise to obtain any other relief of any kind
on account of any transaction relating to any Loan Documents, each Lender agrees
to indemnify and hold harmless Agent Indemnitees with respect thereto and to pay
to Agent Indemnitees such Lender's Pro Rata share of any amount that any Agent
Indemnitee is required to pay under any judgment or other order entered in such
proceeding or by reason of any settlement, including all interest, costs and
expenses (including attorneys' fees) incurred in defending same. In Agent's
discretion, Agent may reserve for any such proceeding, and may satisfy any
judgment, order or settlement, from proceeds of Collateral prior to making any
distributions of Collateral proceeds to Lenders.
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT. Agent shall not be
liable to Credit Parties for any action taken or omitted to be taken under the
Loan Documents, except for losses directly and solely caused by Agent's gross
negligence or willful misconduct. Agent does not assume any responsibility for
any failure or delay in performance or any breach by any Obligor or any other
Credit Party of any obligations under the Loan Documents. Agent does not make to
Credit Parties any express or implied warranty, representation or guarantee with
respect to any Obligations, Collateral, Loan Documents or Obligor. No Agent
Indemnitee shall be responsible to Credit Parties for any recitals, statements,
information, representations or warranties contained in any Loan Documents; the
execution, validity, genuineness, effectiveness or enforceability of any Loan
Documents; the genuineness, enforceability, collectibility, value, sufficiency,
location or existence of any Collateral, or the validity, extent, perfection or
priority of any Lien therein; the validity, enforceability or collectibility of
any Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor. No Agent Indemnitee shall have any obligation to any Credit Party to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any terms of the Loan Documents, or
the satisfaction of any conditions precedent contained in any Loan Documents.
12.8. SUCCESSOR AGENT AND CO-AGENTS.
12.8.1. RESIGNATION; SUCCESSOR AGENT. 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 Lenders and Borrowers. Upon
receipt of such notice, Required Lenders shall have the right to appoint a
successor Agent which shall be (a) a Lender or an Affiliate of a Lender; or (b)
a commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least
$200,000,000 and (provided no Default or Event of Default exists) is reasonably
acceptable to Borrowers. If no successor agent is appointed prior to the
effective date of the resignation of Agent, then Agent may appoint a successor
agent from among Lenders. Upon acceptance by a successor Agent of an appointment
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to serve as Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the powers and duties of the retiring Agent without
further act, and the retiring Agent shall be discharged from its duties and
obligations hereunder but shall continue to have the benefits of the
indemnification set forth in SECTIONS 12.6 and 14.2. Notwithstanding any Agent's
resignation, the provisions of this SECTION 12 shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while
Agent. Any successor by merger or acquisition of the stock or assets of Bank of
America shall continue to be Agent hereunder without further act on the part of
the parties hereto, unless such successor resigns as provided above.
12.8.2. SEPARATE COLLATERAL AGENT. It is the intent of the parties
that there shall be no violation of any Applicable Law denying or restricting
the right of financial institutions to transact business in any jurisdiction. If
Agent believes that it may be limited in the exercise of any rights or remedies
under the Loan Documents due to any Applicable Law, Agent may appoint an
additional Person who is not so limited, as a separate collateral agent or
co-collateral agent. If Agent so appoints a collateral agent or co-collateral
agent, each right and remedy intended to be available to Agent under the Loan
Documents shall also be vested in such separate agent. Every covenant and
obligation necessary to the exercise thereof by such agent shall run to and be
enforceable by it as well as Agent. Lenders shall execute and deliver such
documents as Agent deems appropriate to vest any rights or remedies in such
agent. If any collateral agent or co-collateral agent shall die or dissolve,
become incapable of acting, resign or be removed, then all the rights and
remedies of such agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by Agent until appointment of a new agent.
12.9. DUE DILIGENCE AND NON-RELIANCE. Each Credit Party acknowledges
and agrees that it has, independently and without reliance upon any other Credit
Party, 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 Loans and participate in LC Obligations
hereunder. Each Credit Party has made such inquiries concerning the Loan
Documents, the Collateral and each Obligor as such Credit Party feels necessary.
Each Credit Party further acknowledges and agrees that the other Credit Parties
have made no representations or warranties concerning any Obligor, any
Collateral or the legality, validity, sufficiency or enforceability of any Loan
Documents or Obligations. Each Credit Party will, independently and without
reliance upon the other Credit Parties, and based upon such financial
statements, documents and information as it deems appropriate at the time,
continue to make and rely upon its own credit decisions in making Loans and
participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents. Except for notices, reports and other information
expressly requested by a Lender, Agent shall have no duty or responsibility to
provide any Credit Party 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.
12.10. REPLACEMENT OF CERTAIN LENDERS. In the event that any Lender
(a) fails to fund its Pro Rata share of any Loan or LC Obligation hereunder, and
such failure is not cured within two Business Days, (b) defaults in performing
any of its obligations under the Loan Documents, or (c) fails to give its
consent to any amendment, waiver or action for which consent of all Lenders was
required and Required Lenders consented, then, in addition to any other rights
and remedies that any Person may have, Agent may, by notice to such Lender
within 120 days after such event, require such Lender to assign all of its
rights and obligations under the Loan Documents to Eligible Assignee(s)
specified by Agent, pursuant to appropriate Assignment and Acceptance(s) and
within 20 days after Agent's notice. Agent is irrevocably appointed as
attorney-in-fact to execute any such Assignment and Acceptance if the Lender
fails to execute same. Such Lender shall be entitled to receive, in cash,
concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).
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12.11. REMITTANCE OF PAYMENTS AND COLLECTIONS.
12.11.1. REMITTANCES GENERALLY. All payments by any Lender to Agent
shall be made by the time and on the day set forth in this Agreement, in
immediately available funds. If no time for payment is specified or if payment
is due on demand by Agent and request for payment is made by Agent by 11:00 a.m.
on a Business Day, payment shall be made by Lender not later than 2:00 p.m. on
such day, and if request is made after 11:00 a.m., then payment shall be made by
11:00 a.m. on the next Business Day. Payment by Agent to any Lender shall be
made by wire transfer, in the type of funds received by Agent. Any such payment
shall be subject to Agent's right of offset for any amounts due from such Lender
under the Loan Documents.
12.11.2. FAILURE TO PAY. If any Lender fails to pay any amount when
due by it to Agent pursuant to the terms hereof, such amount shall bear interest
from the due date until paid at the rate determined by Agent as customary in the
banking industry for interbank compensation. In no event shall Borrowers be
entitled to receive credit for any interest paid by a Lender to Agent.
12.11.3. RECOVERY OF PAYMENTS. If Agent pays any amount to a Lender
in the expectation that a related payment will be received by Agent from an
Obligor and such related payment is not received, then Agent may recover such
amount from each Lender that received it. If Agent determines at any time that
an amount received under any Loan Document must be returned to an Obligor or
paid to any other Person pursuant to Applicable Law or otherwise, then,
notwithstanding any other term of any Loan Document, Agent shall not be required
to distribute such amount to any Lender. If any amounts received and applied by
Agent to any Obligations are later required to be returned by Agent pursuant to
Applicable Law, Lenders shall pay to Agent, ON DEMAND, such Lender's Pro Rata
share of the amounts required to be returned.
12.12. AGENT IN ITS INDIVIDUAL CAPACITY. As a Lender, Bank of
America shall have the same rights and remedies under the other Loan Documents
as any other Lender, and the terms "Lenders," "Required Lenders" or any similar
term shall include Bank of America in its capacity as a Lender. Each of Bank of
America and its Affiliates may accept deposits from, maintain deposits or credit
balances for, invest in, lend money to, provide Bank Products to, act as trustee
under indentures of, serve as financial or other advisor to, and generally
engage in any kind of business with, Obligors and their Affiliates, as if Bank
of America were any other bank, without any duty to account therefor (including
any fees or other consideration received in connection therewith) to the other
Lenders. In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and their Account
Debtors (including information subject to confidentiality obligations), and each
Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to Lenders, if acquired in such
individual capacity and not as Agent hereunder.
12.13. AGENT TITLES. Each Lender, other than Bank of America, that
is designated (on the cover page of this Agreement or otherwise) by Bank of
America as an "Agent" or "Arranger" of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event be deemed to have any fiduciary relationship
with any other Lender.
12.14. NO THIRD PARTY BENEFICIARIES. This SECTION 12 is an agreement
solely among Credit Parties and does not confer any rights or benefits upon
Borrowers or any other Person. As between Borrowers and Agent, any action that
Agent may take under any Loan Documents shall be conclusively presumed to have
been authorized and directed by Lenders as herein provided.
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 Borrowers and Credit Parties and their respective
successors and assigns, except that (a) no Borrower shall have the right to
assign its rights or delegate its obligations under any Loan Documents, and (b)
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any assignment by a Lender must be made in compliance with SECTION 13.3. Agent
may treat the Person which made any Loan as the owner thereof for all purposes
until such Person makes an assignment in accordance with SECTION 13.3. Any
authorization or consent of a Lender shall be conclusive and binding on any
subsequent transferee or assignee of such Lender.
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 a financial institution ("PARTICIPANT") a participating interest in
the rights and obligations of such Lender under any Loan Documents. Despite any
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 performance of such
obligations, such Lender shall remain the holder of its Loans and Commitments
for all purposes, all amounts payable by Borrowers shall be determined as if
such Lender had not sold such participating interests, and Borrowers and Agent
shall continue to deal solely and directly with such Lender in connection with
the Loan Documents. Each Lender shall be solely responsible for notifying its
Participants of any matters under the Loan Documents, and Agent and the other
Lenders shall not have any obligation or liability to any such Participant. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of SECTION 5.9 unless Borrowers agree otherwise in
writing.
13.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Commitment in which such Participant has an interest, postpones
the Commitment Termination Date or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment, or releases
any Borrower, Guarantor or substantial portion of the Collateral.
13.2.3. BENEFIT OF SET-OFF. Borrowers agree that each Participant
shall have a right of set-off in respect of its participating interest to the
same extent as if such interest were owing directly to a Lender, and each Lender
shall also retain the right of set-off with respect to any participating
interests sold by it. By exercising any right of set-off, a Participant agrees
to share with Lenders all amounts received through its set-off, in accordance
with SECTION 12.5 as if such Participant were a Lender.
13.3. ASSIGNMENTS.
13.3.1. PERMITTED ASSIGNMENTS. A Lender may assign to any Eligible
Assignee any of its rights and obligations under the Loan Documents, as long as
(a) each assignment is of a constant, and not a varying, percentage of the
transferor Lender's rights and obligations under the Loan Documents and, in the
case of a partial assignment, is in a minimum principal amount of $10,000,000
(unless otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender's rights and obligations, the aggregate amount of the
Commitments retained by the transferor Lender be at least $10,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording,
an Assignment and Acceptance. Nothing herein shall limit the right of a Lender
to pledge or assign any rights under the Loan Documents to (i) 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, or (ii) counterparties to swap agreements relating to any
Loans; PROVIDED, HOWEVER, that any payment by Borrowers to the assigning Lender
in respect of any Obligations assigned as described in this sentence shall
satisfy Borrowers' obligations hereunder to the extent of such payment, and no
such assignment shall release the assigning Lender from its obligations
hereunder.
- 71 -
13.3.2. EFFECT; EFFECTIVE DATE. Upon delivery to Agent of an
assignment notice in the form of EXHIBIT D and a processing fee of $2,500, such
assignment shall become effective as specified in the notice, if it complies
with this SECTION 13.3. From the effective date of such assignment, the Eligible
Assignee shall for all purposes be a Lender under the Loan Documents, and shall
have all rights and obligations of a Lender thereunder. Upon consummation of an
assignment, the transferor Lender, Agent and Borrowers shall make appropriate
arrangements for issuance of replacement and/or new Notes, as appropriate.
13.4. TAX TREATMENT. If any interest in a Loan Document is
transferred to a Transferee that is organized under the laws of any jurisdiction
other than the United States or any state or district thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 5.10.
13.5. REPRESENTATION OF LENDERS. Each Lender represents and warrants
to each Borrower, Agent and other Lenders that none of the consideration used by
it to fund its Loans or to participate in any other transactions under this
Agreement constitutes for any purpose of ERISA or Section 4975 of the Internal
Revenue Code assets of any "plan" as defined in Section 3(3) of ERISA or Section
4975 of the Internal Revenue Code and the interests of such Lender in and under
the Loan Documents shall not constitute plan assets under ERISA.
SECTION 14. MISCELLANEOUS
14.1. CONSENTS, AMENDMENTS AND WAIVERS.
14.1.1. AMENDMENT. No modification of any Loan Document, including
any extension or amendment of a Loan Document or any waiver of a Default or
Event of Default, shall be effective without the prior written agreement of
Agent, with the consent of Required Lenders, and each Obligor party to such Loan
Document; PROVIDED, HOWEVER, that
(a) without the prior written consent of Agent, no modification
shall be effective with respect to any provision in a Loan Document that relates
to any rights, duties or discretion of Agent;
(b) without the prior written consent of Issuing Bank, no
modification shall be effective with respect to any LC Obligations or SECTION
2.3;
(c) without the prior written consent of each affected Lender, no
modification shall be effective that would (i) increase the Commitment of such
Lender; or (ii) reduce the amount of, or waive or delay payment of, any
principal, interest or fees payable to such Lender; and
(d) without the prior written consent of all Lenders (except a
defaulting Lender as provided in SECTION 4.2), no modification shall be
effective that would (i) extend the Revolver Termination Date or Term Loan
Maturity Date; (ii) alter SECTION 5.6, 7.1 (except to add Collateral), or
14.1.1; (iii) amend the definitions of Borrowing Base (and the defined terms
used in such definition), Pro Rata or Required Lenders; (iv) increase any
advance rate, or increase total Commitments; (vi) release Collateral with a book
value greater than $2,000,000 during any calendar year, except as currently
contemplated by the Loan Documents; or (vii) release any Obligor from liability
for any Obligations, if such Obligor is Solvent at the time of the release.
14.1.2. LIMITATIONS. The agreement of Borrowers shall not be
necessary to the effectiveness of any modification of a Loan Document that deals
solely with the rights and duties of Lenders, Agent and/or Issuing Bank as among
themselves. Only the consent of the parties to the Fee Letter or any agreement
relating to a Bank Product shall be required for any modification of such
agreement, and no Affiliate of a Lender that is party to a Bank Product
agreement shall have any other right to consent to or participate in any manner
- 72 -
in modification of any other Loan Document. The making of any Loans 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, nor to establish a course of
dealing. 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 is given.
14.1.3. PAYMENT FOR CONSENTS. No Borrower will, directly or
indirectly, pay any remuneration or other thing of value, whether by way of
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for agreement by such Lender with any
modification of any Loan Documents, unless such remuneration or value is
concurrently paid, on the same terms, on a Pro Rata basis to all Lenders
providing their consent.
14.2. INDEMNITY. EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no
event shall any party to a Loan Document have any obligation thereunder to
indemnify or hold harmless an Indemnitee with respect to a Claim that is
determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from the gross negligence or willful misconduct of such
Indemnitee.
14.3. NOTICES AND COMMUNICATIONS.
14.3.1. NOTICE ADDRESS. Subject to SECTION 4.1.4, all notices,
requests and other communications by or to a party hereto shall be in writing
and shall be given to any Borrower, at Borrower Agent's address shown on the
signature pages hereof, and to any other Person at its address shown on the
signature pages hereof (or, in the case of a Person who becomes a Lender after
the Closing Date, at the address shown on its Assignment and Acceptance), or at
such other address as a party may hereafter specify by notice in accordance with
this SECTION 14.3. Each such notice, request or other communication shall be
effective only (a) if given by facsimile transmission, when transmitted to the
applicable facsimile number, if confirmation of receipt is received; (b) if
given by mail, three Business Days after deposit in the U.S. mail, with
first-class postage pre-paid, addressed to the applicable address; or (c) if
given by personal delivery, when duly delivered to the notice address with
receipt acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant
to SECTION 2.1.4, 2.3, 3.1.2, 4.1.1 or 5.3.3 shall be effective until actually
received by the individual to whose attention at Agent such notice is required
to be sent. Any written notice, request or other communication that is not sent
in conformity with the foregoing provisions shall nevertheless be effective on
the date actually received by the noticed party. Any notice received by Borrower
Agent shall be deemed received by all Borrowers.
14.3.2. ELECTRONIC COMMUNICATIONS; VOICE MAIL. Electronic mail and
internet websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
SECTION 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under SECTION 4.1.4. Agent and Lenders make no
assurances as to the privacy and security of electronic communications.
Electronic and voice mail may not be used as effective notice under the Loan
Documents.
14.3.3. NON-CONFORMING COMMUNICATIONS. Agent and Lenders may rely
upon any notices purportedly given by or on behalf of any Borrower even if such
notices were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation. Each Borrower shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
telephonic communication purportedly given by or on behalf of a Borrower.
- 73 -
14.4. PERFORMANCE OF BORROWERS' OBLIGATIONS. Agent may, in its
discretion at any time and from time to time, at Borrowers' expense, pay any
amount or do any act required of a Borrower under any Loan Documents or
otherwise lawfully requested by Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent's Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien. All payments, costs and expenses (including Extraordinary
Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers,
ON DEMAND, with interest from the date incurred to the date of payment thereof
at the Default Rate applicable to Base Rate Revolver Loans. Any payment made or
action taken by Agent under this Section shall be without prejudice to any right
to assert an Event of Default or to exercise any other rights or remedies under
the Loan Documents.
14.5. CREDIT INQUIRIES. Each Borrower hereby authorizes each Credit
Party (but no Credit Party shall have any obligation) to respond to usual and
customary credit inquiries from third parties concerning any Borrower or
Subsidiary.
14.6. SEVERABILITY. Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be valid under Applicable
Law. If any provision is found to be invalid under Applicable Law, it shall be
ineffective only to the extent of such invalidity and the remaining provisions
of the Loan Documents shall remain in full force and effect.
14.7. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the
Loan Documents are cumulative. The parties acknowledge that the Loan Documents
may use several different limitations, tests or measurements to regulate the
same or similar matters, and they agree that these are cumulative and that each
must be performed as provided. Except as otherwise specifically provided in
another Loan Document (by specific reference to the applicable provision of this
Agreement), if any provision contained herein is in direct conflict with any
provision in another Loan Document, the provision herein shall govern and
control.
14.8. COUNTERPARTS; FACSIMILE SIGNATURES. Any Loan Document may be
executed in counterparts, each of which taken together shall constitute one
instrument. Loan Documents may be executed and delivered by facsimile, and they
shall have the same force and effect as manually signed originals. Agent may
require confirmation by a manually-signed original, but failure to request or
deliver same shall not limit the effectiveness of any facsimile signature.
14.9. ENTIRE AGREEMENT. Time is of the essence of the Loan
Documents. The Loan Documents embody the entire understanding of the parties
with respect to the subject matter thereof and supersede all prior
understandings regarding the same subject matter.
14.10. OBLIGATIONS OF CREDIT PARTIES SEVERAL. The obligations of
each Credit Party hereunder are several, and no Credit Party shall be
responsible for the obligations or Commitments of any other Credit Party.
Nothing in this Agreement and no action of Agent or Lenders pursuant to the Loan
Documents shall be deemed to constitute Credit Parties to be a partnership,
association, joint venture or any other kind of entity, nor to constitute
control of any Borrower. Each Borrower acknowledges and agrees that in
connection with all aspects of any transaction contemplated by the Loan
Documents, Borrowers and each Credit Party have an arms-length business
relationship that creates no fiduciary duty on the part of any Credit Party, and
each Borrower and each Credit Party expressly disclaims any fiduciary
relationship.
14.11. CONFIDENTIALITY. During the term of this Agreement and for 12
months thereafter, each Credit Party agrees to take reasonable precautions to
maintain the confidentiality of any information that Borrowers deliver to Agent
and Lenders and identify as confidential at the time of delivery, except that
Agent and any Lender may disclose such information (a) to their respective
officers, directors, employees, Affiliates and agents, including legal counsel,
auditors and other professional advisors; (b) to any party to the Loan Documents
from time to time; (c) pursuant to the order of any court or administrative
- 74 -
agency; (d) upon the request of any Governmental Authority exercising regulatory
authority over Agent or such Lender; (e) which ceases to be confidential, other
than by an act or omission of a Credit Party, or which becomes available to any
Credit Party on a nonconfidential basis; (f) to the extent reasonably required
in connection with any litigation relating to any Loan Documents or transactions
contemplated thereby, or otherwise as required by Applicable Law; (g) to the
extent reasonably required for the exercise of any rights or remedies under the
Loan Documents; (h) to any actual or proposed party to a Bank Product or to any
Transferee, as long as such Person agrees to be bound by the provisions of this
Section; (i) to the National Association of Insurance Commissioners or any
similar organization, or to any nationally recognized rating agency that
requires access to information about a Lender's portfolio in connection with
ratings issued with respect to such Lender; (j) to any investor or potential
investor in an Approved Fund that is a Lender or Transferee, but solely for use
by such investor to evaluate an investment in such Approved Fund, or to any
manager, servicer or other Person in connection with its administration of any
such Approved Fund; or (k) with the consent of Borrowers. Notwithstanding the
foregoing, Agent and Lenders may issue and disseminate to the public general
information describing this credit facility, including the names and addresses
of Borrowers and a general description of Borrowers' businesses, and may use
Borrowers' names in advertising and other promotional materials.
14.12. [RESERVED].
14.13. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
GEORGIA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING
EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
14.14. CONSENT TO FORUM. EACH BORROWER HEREBY CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH
JURISDICTION OVER GEORGIA, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO
ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT
SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT'S PERSONAL OR
SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. Nothing herein shall
limit the right of Agent or any Lender to bring proceedings against any Obligor
in any other court. Nothing in this Agreement shall be deemed to preclude
enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.
14.15. WAIVERS BY BORROWERS. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH BORROWER WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH
CREDIT PARTY HEREBY ALSO WAIVES) IN ANY PROCEEDING, CLAIM OR COUNTERCLAIM OF ANY
KIND RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, OBLIGATIONS OR COLLATERAL; (B)
PRESENTMENT, DEMAND, PROTEST, NOTICE OF PRESENTMENT, DEFAULT, NON-PAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY
COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL
PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT ON WHICH A BORROWER MAY IN ANY
WAY BE LIABLE, AND HEREBY RATIFIES ANYTHING AGENT MAY DO IN THIS REGARD; (C)
NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF ANY COLLATERAL; (D) ANY BOND OR
SECURITY THAT MIGHT BE REQUIRED BY A COURT PRIOR TO ALLOWING AGENT TO EXERCISE
ANY RIGHTS OR REMEDIES; (E) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND
EXEMPTION LAWS; (F) ANY CLAIM AGAINST ANY CREDIT PARTY, ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES
(AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY WAY RELATING TO ANY ENFORCEMENT
ACTION, OBLIGATIONS, LOAN DOCUMENTS OR TRANSACTIONS RELATING THERETO; AND (G)
NOTICE OF ACCEPTANCE HEREOF. Each Borrower acknowledges that the foregoing
- 75 -
waivers are a material inducement to each Credit Party's entering into this
Agreement and that each Credit Party is relying upon the foregoing in their
dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with
its legal counsel and has knowingly and voluntarily waived its jury trial and
other 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.
14.16. PATRIOT ACT NOTICE. Agent and Lenders hereby notify Borrowers
that pursuant to the requirements of the PATRIOT Act, Agent and Lenders are
required to obtain, verify and record information that identifies each Borrower,
including its legal name, address, tax ID number and other information that will
allow Agent and Lenders to identify it in accordance with the PATRIOT Act. Agent
and Lenders will also require information regarding each personal guarantor, if
any, and may require information regarding Borrowers' management and owners,
such as legal name, address, social security number and date of birth.
[Remainder of page intentionally left blank; signatures begin on following page]
- 76 -
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date set forth above.
BORROWERS:
BAIRNCO CORPORATION
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇, INC.
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
KASCO CORPORATION
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇ GMBH
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
- 77 -
ATLANTIC SERVICE CO. LTD
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
ATLANTIC SERVICE CO. (UK) LTD.
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
EUROKASCO, S.A.
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
AGENT AND LENDERS:
BANK OF AMERICA, N.A.,
as Agent and Lender
By: /s/
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Bairnco Loan Administration
Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
- 78 -
EXHIBIT A
to
Loan and Security Agreement
REVOLVER NOTE
$_______________
______________, 20__ Atlanta, Georgia
BAIRNCO CORPORATION, a Delaware corporation, ▇▇▇▇▇, INC., a Delaware
corporation, and KASCO CORPORATION, a Delaware corporation [OR, IF THE NOTE IS
GIVEN WITH RESPECT TO FOREIGN CURRENCY LOANS, THE FOREIGN CURRENCY BORROWERS]
(collectively, "BORROWERS"), for value received, hereby unconditionally promise
to pay, on a joint and several basis, to the order of
____________________________ ("LENDER"), the principal sum of
______________________________ DOLLARS ($___________), or such lesser amount as
may be advanced by Lender as Revolver Loans and owing as LC Obligations from
time to time under the Loan Agreement described below, together with all accrued
and unpaid interest thereon. Terms are used herein as defined in the Loan and
Security Agreement dated as of November 9, 2006, among Borrowers, Bank of
America, N.A., as Agent, Lender, and certain other financial institutions, as
such agreement may be amended, modified, renewed or extended from time to time
("LOAN AGREEMENT").
Principal of and interest on this Note from time to time outstanding shall
be due and payable as provided in the Loan Agreement. This Note is issued
pursuant to and evidences Revolver Loans and LC Obligations under the Loan
Agreement, to which reference is made for a statement of the rights and
obligations of Lender and the duties and obligations of Borrowers. The Loan
Agreement contains provisions for acceleration of the maturity of this Note upon
the happening of certain stated events, and for the borrowing, prepayment and
reborrowing of amounts upon specified terms and conditions.
The holder of this Note is hereby authorized by Borrowers to record on a
schedule annexed to this Note (or on a supplemental schedule) the amounts owing
with respect to Revolver Loans and LC Obligations, and the payment thereof.
Failure to make any notation, however, shall not affect the rights of the holder
of this Note or any obligations of Borrowers hereunder or under any other Loan
Documents.
Time is of the essence of this Note. Each Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment
for payment, protest, notice of protest, notice of intention to accelerate the
maturity of this Note, diligence in collecting, the bringing of any suit against
any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its
terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity. Borrowers jointly and severally agree
to pay, and to save the holder of this Note harmless against, any liability for
the payment of all costs and expenses (including without limitation reasonable
attorneys' fees) if this Note is collected by or through an attorney-at-law.
In no contingency or event whatsoever shall the amount paid or agreed to
be paid to the holder of this Note for the use, forbearance or detention of
money advanced hereunder exceed the highest lawful rate permitted under
Applicable Law. If any such excess amount is inadvertently paid by Borrowers or
inadvertently received by the holder of this Note, such excess shall be returned
to Borrowers or credited as a payment of principal, in accordance with the Loan
Agreement. It is the intent hereof that Borrowers not pay or contract to pay,
and that holder of this Note not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrowers under Applicable Law.
This Note shall be governed by the laws of the State of Georgia, without
giving effect to any conflict of law principles (but giving effect to federal
laws relating to national banks).
IN WITNESS WHEREOF, this Revolver Note is executed as of the date set
forth above.
BAIRNCO CORPORATION
By____________________________________
Title:
▇▇▇▇▇, INC.
By____________________________________
Title:
KASCO CORPORATION
By____________________________________
Title:
[OR, IF THE NOTE IS GIVEN WITH RESPECT
TO FOREIGN CURRENCY LOANS, THE FOREIGN
CURRENCY BORROWERS]
- 2 -
EXHIBIT B
to
Loan and Security Agreement
TERM LOAN NOTE
$_______________
____________, 20__ Atlanta, Georgia
BAIRNCO CORPORATION, a Delaware corporation, ▇▇▇▇▇, INC., a Delaware
corporation, and KASCO CORPORATION, a Delaware corporation (collectively,
"BORROWERS"), for value received, hereby unconditionally promise to pay, on a
joint and several basis, to the order of ____________________________
("LENDER"), the principal sum of ______________________________ DOLLARS
($___________), or such lesser amount as may be advanced by Lender as a Term
Loan under the Loan Agreement described below, together with all accrued and
unpaid interest thereon. Terms are used herein as defined in the Loan and
Security Agreement dated as of November 9, 2006, among Borrowers, Bank of
America, N.A., as Agent, Lender, and certain other financial institutions, as
such agreement may be amended, modified, renewed or extended from time to time
("LOAN AGREEMENT").
Principal of and interest on this Note from time to time outstanding shall
be due and payable as provided in the Loan Agreement. This Note is issued
pursuant to and evidences Lender's Term Loan under the Loan Agreement, to which
reference is made for a statement of the rights and obligations of Lender and
the duties and obligations of Borrowers. The Loan Agreement contains provisions
for acceleration of the maturity of this Note upon the happening of certain
stated events, and for the prepayment of amounts upon specified terms and
conditions.
The holder of this Note is hereby authorized by Borrowers to record on a
schedule annexed to this Note (or on a supplemental schedule) the amounts owing
with respect to the Term Loan, including payments thereon. Failure to make any
notation, however, shall not affect the rights of the holder of this Note or any
obligations of Borrowers hereunder or under any other Loan Documents.
Time is of the essence of this Note. Each Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment
for payment, protest, notice of protest, notice of intention to accelerate the
maturity of this Note, diligence in collecting, the bringing of any suit against
any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its
terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity. Borrowers jointly and severally agree
to pay, and to save the holder of this Note harmless against, any liability for
the payment of all costs and expenses (including without limitation reasonable
attorneys' fees) if this Note is collected by or through an attorney-at-law.
In no contingency or event whatsoever shall the amount paid or agreed to
be paid to the holder of this Note for the use, forbearance or detention of
money advanced hereunder exceed the highest lawful rate permitted under
Applicable Law. If any such excess amount is inadvertently paid by Borrowers or
inadvertently received by the holder of this Note, such excess shall be returned
to Borrowers or credited as a payment of principal, in accordance with the Loan
Agreement. It is the intent hereof that Borrowers not pay or contract to pay,
and that holder of this Note not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrowers under Applicable Law.
This Note shall be governed by the laws of the State of Georgia, without
giving effect to any conflict of law principles (but giving effect to federal
laws relating to national banks).
IN WITNESS WHEREOF, this Term Loan Note is executed as of the date set
forth above.
BAIRNCO CORPORATION
By_____________________________________
Title:
▇▇▇▇▇, INC.
By_____________________________________
Title:
KASCO CORPORATION
By_____________________________________
Title:
- 2 -
EXHIBIT C
to
Loan and Security Agreement
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan and Security Agreement dated as of November
9, 2006, as amended ("LOAN AGREEMENT"), among BAIRNCO CORPORATION, ▇▇▇▇▇, INC.,
KASCO CORPORATION, ▇▇▇▇▇▇▇ & ▇▇▇▇ GMBH, ATLANTIC SERVICE CO. LTD. ATLANTIC
SERVICE CO. (UK) LTD. and EUROKASCO S.A. (collectively, "BORROWERS"), BANK OF
AMERICA, N.A., as agent ("AGENT") for the financial institutions from time to
time party to the Loan Agreement ("LENDERS"), and such Lenders. Terms are used
herein as defined in the Loan Agreement.
______________________________________("ASSIGNOR") and ___________________
_____________ ("ASSIGNEE") agree as follows:
1. Assignor hereby assigns to Assignee and Assignee hereby purchases and
assumes from Assignor (a) a principal amount of $________ of Assignor's
outstanding Revolver Loans and $___________ of Assignor's participations in LC
Obligations, (b) the amount of $__________ of Assignor's Revolver Commitment
(which represents (____%) of the total Revolver Commitments); and (c) a
principal amount of $________ of Assignor's outstanding Term Loan (the foregoing
items being, collectively, the "ASSIGNED INTEREST"), together with an interest
in the Loan Documents corresponding to the Assigned Interest. This Agreement
shall be effective as of the date ("EFFECTIVE DATE") indicated in the
corresponding Assignment Notice delivered to Agent, provided such Assignment
Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if
applicable. From and after the Effective Date, Assignee hereby expressly
assumes, and undertakes to perform, all of Assignor's obligations in respect of
the Assigned Interest, and all principal, interest, fees and other amounts which
would otherwise be payable to or for Assignor's account in respect of the
Assigned Interest shall be payable to or for Assignee's account, to the extent
such amounts accrue on or after the Effective Date.
2. Assignor (i) represents that as of the date hereof, prior to giving
effect to this assignment, its Revolver Commitment is $__________, the
outstanding balance of its Revolver Loans and participations in LC Obligations
is $__________, and the outstanding balance of its Term Loans is $__________;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto, other than that
Assignor is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers or the performance by Borrowers
of their obligations under the Loan Documents. [ASSIGNOR IS ATTACHING THE
NOTE[S] HELD BY IT AND REQUESTS THAT AGENT EXCHANGE SUCH NOTE[S] FOR NEW NOTES
PAYABLE TO ASSIGNEE [AND ASSIGNOR].]
3. Assignee (i) represents and warrants that it is legally authorized to
enter into this Assignment and Acceptance; (ii) confirms that it has received
copies of the Loan Agreement and such other Loan Documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (iii) agrees that it shall, independently
and without reliance upon Assignor and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents; (iv) confirms
that it is an Eligible Assignee; (v) appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to Agent by the terms thereof, together with such
powers as are incidental thereto; (vi) agrees that it will observe and perform
all obligations that are required to be performed by it as a "Lender" under the
Loan Documents; and (vii) represents and warrants that the assignment evidenced
hereby will not result in a non-exempt "prohibited transaction" under Section
406 of ERISA.
4. Assignee acknowledges and agrees that it will not sell or otherwise
dispose of the Assigned Interest or any portion thereof, or grant any
participation therein, in a manner which, or take any action in connection
therewith which, would violate the terms of any Loan Documents.
5. This Agreement and all rights and obligations shall be interpreted in
accordance with and governed by the laws of the State of Georgia. If any
provision hereof would be invalid under Applicable Law, then such provision
shall be deemed to be modified to the extent necessary to render it valid while
most nearly preserving its original intent; no provision hereof shall be
affected by another provision's being held invalid.
6. Each notice or other communication hereunder shall be in writing, shall
be sent by messenger, by telecopy or facsimile transmission or by first-class
mail, shall be deemed given when sent and shall be sent as follows:
(a) If to Assignee, to the following address (or to such other
address as Assignee may designate from time to time):
__________________________
__________________________
__________________________
(b) If to Assignor, to the following address (or to such other
address as Assignor may designate from time to time):
__________________________
__________________________
__________________________
__________________________
Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows:
If to Assignee, to the following account (or to such other account as
Assignee may designate from time to time):
______________________________
______________________________
ABA No._______________________
______________________________
Account No.___________________
Reference: __________________
If to Assignor, to the following account (or to such other account as
Assignor may designate from time to time):
______________________________
______________________________
ABA No._______________________
______________________________
Account No.___________________
Reference: __________________
- 2 -
IN WITNESS WHEREOF, this Assignment and Acceptance is executed as of
_____________, 20__.
_____________________________________
("Assignee")
By___________________________________
Title:
_____________________________________
("Assignor")
By___________________________________
Title:
- 3 -
EXHIBIT D
to
Loan and Security Agreement
ASSIGNMENT NOTICE
Reference is made to (i) the Loan and Security Agreement dated as of
November 9, 2006, as amended ("LOAN AGREEMENT"), among BAIRNCO CORPORATION,
▇▇▇▇▇, INC., KASCO CORPORATION, ▇▇▇▇▇▇▇ & ▇▇▇▇ GMBH, ATLANTIC SERVICE CO. LTD.,
ATLANTIC SERVICE CO. (UK) LTD. and EUROKASCO S.A. (collectively, "BORROWERS"),
BANK OF AMERICA, N.A., as agent ("AGENT") for the financial institutions from
time to time party to the Loan Agreement ("LENDERS"), and such Lenders; and (ii)
the Assignment and Acceptance dated as of ____________, 20__ ("ASSIGNMENT
AGREEMENT") between __________________ ("ASSIGNOR") and ____________________
("ASSIGNEE"). Terms are used herein as defined in the Loan Agreement.
Assignor hereby notifies Borrowers and Agent of Assignor's intent to
assign to Assignee pursuant to the Assignment Agreement (a) a principal amount
of $________ of Assignor's outstanding Revolver Loans and $___________ of
Assignor's participations in LC Obligations, (b) the amount of $__________ of
Assignor's Revolver Commitment (which represents (____%) of the total Revolver
Commitments); and (c) a principal amount of $________ of Assignor's outstanding
Term Loan (the foregoing items being, collectively, the "ASSIGNED INTEREST"),
together with an interest in the Loan Documents corresponding to the Assigned
Interest. This Agreement shall be effective as of the date ("EFFECTIVE DATE")
indicated below, provided this Assignment Notice is executed by Assignor,
Assignee, Agent and Borrower Agent, if applicable. Pursuant to the Assignment
Agreement, Assignee has expressly assumed all of Assignor's obligations under
the Loan Agreement to the extent of the Assigned Interest, as of the Effective
Date.
For purposes of the Loan Agreement, Agent shall deem Assignor's Revolver
Commitment to be reduced by $_________, and Assignee's Revolver Commitment to be
increased by $_________.
The address of Assignee to which notices and information are to be sent
under the terms of the Loan Agreement is:
________________________
________________________
________________________
________________________
The address of Assignee to which payments are to be sent under the terms
of the Loan Agreement is shown in the Assignment and Acceptance.
This Notice is being delivered to Borrowers and Agent pursuant to SECTION
13.3 of the Loan Agreement. Please acknowledge your acceptance of this Notice by
executing and returning to Assignee and Assignor a copy of this Notice.
IN WITNESS WHEREOF, this Assignment Notice is executed as of
_____________, 20__.
____________________________________
("Assignee")
By__________________________________
Title:
____________________________________
("Assignor")
By__________________________________
Title:
ACKNOWLEDGED AND AGREED,
AS OF THE DATE SET FORTH ABOVE:
BAIRNCO CORPORATION:*
_________________________________
By_______________________________
Title:
* No signature required if Assignee is a Lender, U.S.-based Affiliate of a
Lender or Approved Fund, or if an Event of Default exists.
BANK OF AMERICA, N.A.,
as Agent
By_______________________________
Title:
- 2 -
EXHIBIT E
to
Loan and Security Agreement
COMPLIANCE CERTIFICATE
[Letterhead of Borrowers]
__________________, 20__
Bank of America, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to that that certain Loan and Security Agreement dated
November 9, 2006, among BAIRNCO CORPORATION ("Bairnco"), ▇▇▇▇▇, INC., KASCO
CORPORATION, ▇▇▇▇▇▇▇ & ▇▇▇▇ GmbH, ATLANTIC SERVICE CO. LTD, ATLANTIC SERVICE CO.
(UK) LTD., and EUROKASCO S.A. (collectively, "Borrowers" and each individually a
"Borrower"), BANK OF AMERICA, N.A., its is capacity as agent (together with its
successors in such capacity, "Agent"), for various financial institutions party
thereto from time to time ("Lenders"), and the Lenders referenced therein (as at
any time amended, restated, modified or supplemented, "Loan Agreement").
The undersigned, the chief financial officer of Bairnco, on behalf of
Bairnco in its capacity as the representative of the Borrowers pursuant to
SECTION 4.4 of the Loan Agreement, gives this certificate to Agent in accordance
with the requirements of SECTION 10.1.3 of the Loan Agreement. Capitalized terms
used in this Certificate, unless otherwise defined herein, shall have the
meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements of
income of Borrowers and their Subsidiaries for the 12-month period ending
__________________, 20__, copies of which are attached hereto, I hereby certify
that:
The Fixed Charge Coverage Ratio is ____ to ____ (the calculation of which
is attached hereto (together with reasonable supporting detail));
2. No Default exists on the date hereof, other than:
__________________ ________________________________________________ [if none, so
state]; and
3. No Event of Default exists on the date hereof, other than
__________ ____________________________________________________ [if none, so
state].
4. As of the date hereof, each Borrower is current in its payment of
all accrued rent and other charges to Persons including, without limitation,
warehousemen, who own or lease any premises where any of the Collateral is
located, and there are no pending disputes or claims regarding any Borrower's
failure to pay or delay in payment of any such rent or other charges.
5. Attached hereto is a schedule showing the calculations that
support Borrowers' compliance [NON-COMPLIANCE] with the financial covenants, as
shown above.
Very truly yours,
BAIRNCO CORPORATION,
as Borrower Agent
By: ______________________________
Name:_____________________________
Title: Chief Financial Officer
- 2 -
-------------------------------------------------------------------------------------------------------------------
Period Ended _______________ Bairnco Scarlett Total
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
EBITDA
-------------------------------------------------------------------------------------------------------------------
Net Income
-------------------------------------------------------------------------------------------------------------------
+ Interest Expense
-------------------------------------------------------------------------------------------------------------------
+ Income Taxes
-------------------------------------------------------------------------------------------------------------------
+ Depreciation/Amortization
-------------------------------------------------------------------------------------------------------------------
+(-) Losses/Gains on Asset Sales
-------------------------------------------------------------------------------------------------------------------
+(-) Losses/Gains on Asset Revaluation
-------------------------------------------------------------------------------------------------------------------
+(-) Extraordinary Losses/Gains
-------------------------------------------------------------------------------------------------------------------
+ Approved Non-Recurring Expenses
-------------------------------------------------------------------------------------------------------------------
TOTAL EBITDA
-------------------------------------------------------------------------------------------------------------------
- Capital Expenditures (unfinanced)*
-------------------------------------------------------------------------------------------------------------------
- Cash Taxes
-------------------------------------------------------------------------------------------------------------------
TOTAL EBITDA FOR FIXED CHARGE CALCULATION
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Fixed Charges
-------------------------------------------------------------------------------------------------------------------
Interest Expense**
-------------------------------------------------------------------------------------------------------------------
+ Scheduled Principal Payments**
-------------------------------------------------------------------------------------------------------------------
+ Distributions***
-------------------------------------------------------------------------------------------------------------------
TOTAL FIXED CHARGES
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
FIXED CHARGE COVERAGE RATIO
---------------------------
-------------------------------------------------------------------------------------------------------------------
* Excludes all Capital Expenditures related to Borrowers' Chinese facility
made prior to the Closing Date.
** For each Fiscal Month ending after the Closing Date, through and including
the Fiscal Month ending September 30, 2007, interest expense and scheduled
principal payments on Borrowed Money shall be calculated by adding the sum
of all such interest expense and principal payments made from the Closing
Date through the date of determination, multiplying such sum by 365, and
dividing the product by the number of days elapsed since the Closing Date.
*** Excludes all Distributions made prior to the Closing Date.
- 3 -
SCHEDULE 1.1
to
Loan and Security Agreement
COMMITMENTS OF LENDERS
----------------------------------------------------------------------------------------------------------
Term Loan
Lender Revolver Commitment Commitment Total Commitments
------ ------------------- ---------- -----------------
----------------------------------------------------------------------------------------------------------
Bank of America, N.A. $27,000,000.00 $15,000,000.00 $42,000,000.00
----------------------------------------------------------------------------------------------------------
SCHEDULE 1.1A
to
Loan and Security Agreement
GUARANTORS
Name of Subsidiary State of Organization
------------------ ---------------------
▇▇▇▇▇ Adhesives & Films, Inc. Texas
▇▇▇▇▇ Partners, Inc. Delaware
▇▇▇▇▇ Signtech, Ltd. Texas
▇▇▇▇▇ Viscor Ltd. Texas
▇▇▇▇▇ MED International LLC Delaware
Southern Saw Acquisition Corporation Delaware
Kasco Mexico LLC Delaware
SCHEDULE 1.1B
to
Loan and Security Agreement
ACQUIRED RESIDENTIAL
PROPERTIES
See attached legal descriptions on Exhibit "A"
(Track One-B, Two, Three, Four, Five and Six)
SCHEDULE 2.3.4
to
Loan and Security Agreement
EXISTING LETTERS OF CREDIT
Letter of Credit No. Beneficiary Account Party Stated Amount Expiration Date
-------------------- ----------- ------------- ------------- ---------------
722936 National Union Fire Insurance, Company of Bairnco $250,000.00 12/31/06
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ Employers Insurance of Wausau, a Mutual Bairnco $2,215,000.00 1/30/07
Company
7414319 Bank of America, Shanghai China ▇▇▇▇▇ Materials $400,000.00 2/22/07
68009146 Bank of America, Shanghai China ▇▇▇▇▇ Materials $2,250,000.00 10/1/07
68010669 Aetna Life Insurance Company Bairnco $88,527.00 6/01/07
68014268 Bank of America, Shanghai China ▇▇▇▇▇ Materials $1,000,000.00 8/14/07
68015187 Bank of America, Shanghai China ▇▇▇▇▇ Materials $1,500,000.00 10/12/07
SCHEDULE 8.5
to
Loan and Security Agreement
DEPOSIT ACCOUNTS
--------------------------------------------------------------------------------------------------------------------
Name of Borrower Depository Bank Type of Account Account Number
---------------- --------------- --------------- --------------
--------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Inc. Bank of America, N.A Lockbox 8188200168
--------------------------------------------------------------------------------------------------------------------
Kasco Corporation Bank of America, N.A Lockbox 8188701622
--------------------------------------------------------------------------------------------------------------------
Southern Saw Acquisition Corporation SunTrust Bank, N.A. Lockbox 1000051370137
--------------------------------------------------------------------------------------------------------------------
SCHEDULE 8.6.1
to
Loan and Security Agreement
BUSINESS LOCATIONS
1. Borrowers currently have the following business locations, and no others:
Chief Executive Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Other Locations (US):
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1260 and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Other Locations (Foreign):
▇▇. ▇▇, ▇▇▇▇▇▇ ▇▇.
Export Processing ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ & ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
Building 7DA Xing
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ & ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ 215000
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Willow Road
Pen-Y-Fan Industrial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Cedex 6
France
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Y ▇▇ ▇▇▇▇▇▇ ▇ / ▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇. Mexico
2. Borrowers maintain their books and records relating to Accounts and
General Intangibles at:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
3. Borrowers have had no office, place of business or agent for process
located in any county other than as set forth above, except:
None
4. Each Subsidiary currently has the following business locations, and no
others:
Chief Executive Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Other Locations:
See question #1
5. Each Subsidiary maintains its books and records relating to Accounts and
General Intangibles at:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ 3274
- 2 -
6. Each Subsidiary has had no office, place of business or agent for process
located in any county other than as set forth above, except: NONE
7. The following bailees, warehouseman, similar parties and consignees hold
inventory of a Borrower or one of its Subsidiaries:
------------------------------------------------------------------------------------------------------------------
Nature of
Name and Address of Party Relationship Amount of Inventory Owner of Inventory
------------------------- ------------ ------------------- ------------------
------------------------------------------------------------------------------------------------------------------
Kasco Corp. Territory Manager Warehouse Approximately $1.2M Kasco Corporation
Warehouses (42) aggregate, approximately
$30,000 per location
------------------------------------------------------------------------------------------------------------------
Hansaloy 3rd party processor Approximately $16,000 Kasco Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Hermann Warehouse Corporation Warehouse Approximately $144,000 ▇▇▇▇▇ Inc.
▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Meritex Logistics Warehouse Approximately $168,000 ▇▇▇▇▇ Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Various Consignment locations (12) Consignee Approximately $176,000 in ▇▇▇▇▇ Inc.
aggregate
------------------------------------------------------------------------------------------------------------------
Fabrico Consignee Approximately $104,000 ▇▇▇▇▇ Viscor Ltd.
▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
- 3 -
SCHEDULE 9.1.4
to
Loan and Security Agreement
NAMES AND CAPITAL STRUCTURE
1. The corporate names, jurisdictions of incorporation, and authorized and
issued Equity Interests of each Borrower and Subsidiary are as follows:
---------------------------------------------------------------------------------------------------------------------
Number and Class Number and Class
Name Jurisdiction of Authorized Shares of Issued Shares
---- ------------ -------------------- ----------------
---------------------------------------------------------------------------------------------------------------------
Bairnco Corporation Delaware Common - 35,000,000 Common - 7,291,853
Preferred - 5,000,000 Preferred - 0
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, Inc. Delaware Common - 200 Common - 200
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Partners, Inc. Delaware Common - 3000 Common - 300
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Viscor Ltd. Texas N/A N/A
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ MED International LLC Delaware N/A N/A
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Materials for China N/A N/A
Electronics Co. Ltd.
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Material China N/A N/A
Technologies Co. Ltd.
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Adhesives & Films, Delaware Common - 1000 Common - 1000
Inc.
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Signtech Ltd. Texas N/A N/A
---------------------------------------------------------------------------------------------------------------------
Kasco Corporation Delaware Common - 1000 Common - 100
---------------------------------------------------------------------------------------------------------------------
Southern Saw Acquisition Delaware Common - 10000 Common - 10000
Corporation
---------------------------------------------------------------------------------------------------------------------
Kasco Mexico LLC Delaware N/A N/A
---------------------------------------------------------------------------------------------------------------------
Kasco Ensambly S.A. de C.V. Mexico N/A N/A
---------------------------------------------------------------------------------------------------------------------
Atlantic Service Company, United Kingdom Ordinary - 90 Ordinary - 32
Ltd. (UK) Redeemable - 8 Redeemable - 8
Preferred - 2 Preferred - 2
---------------------------------------------------------------------------------------------------------------------
Atlantic Service Company, Canada Common - Unlimited Common - Unknown 100% owned by Kasco
Ltd. Preference - Unlimited Corp.
Preference - Unknown, 100% owned by
Kasco Corp
---------------------------------------------------------------------------------------------------------------------
EuroKasco S.A.S. France Unknown Unknown - 100% owned by Kasco Corp.
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇ GmbH Germany Unknown Unknown - 100% owned by Kasco Corp.
---------------------------------------------------------------------------------------------------------------------
2. The record holders of Equity Interests of each Borrower and Subsidiary are
as follows:
------------------------------------------------------------------------------------------------------------------
Name Class of Stock Number of Shares Record Owner
---- -------------- ---------------- ------------
------------------------------------------------------------------------------------------------------------------
Bairnco Corp Common 7,291,853 Publicly held
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, Inc. Common 200 Bairnco Corp.
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Partners, Inc. Common 300 ▇▇▇▇▇ Inc.
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Adhesives & Common 1000 ▇▇▇▇▇ Inc.
Films, Inc.
------------------------------------------------------------------------------------------------------------------
Kasco Corporation Common 100 Bairnco Corp.
------------------------------------------------------------------------------------------------------------------
Southern Saw Common 10,000 Kasco Corporation
Acquisition Corporation
------------------------------------------------------------------------------------------------------------------
Atlantic Service Ordinary 32 Kasco Corporation
Company, Ltd. (UK) Redeemable 8 Kasco Corporation
Preferred 2 Kasco Corporation
------------------------------------------------------------------------------------------------------------------
3. All agreements binding on holders of Equity Interests of Borrowers and
Subsidiaries with respect to such interests are as follows:
See bylaws attached with closing and incumbency certificates.
4. The name of each Affiliate of a Borrower and the nature of the affiliation
are as follows:
See Definitive Proxy Statement, Form DEF-14A filed with Securities and Exchange
Commission on March 15, 2006. Per the definition in the Loan and Security
Agreement, Steel Partners II LLP is not an Affiliate.
SCHEDULE 9.1.5
to
Loan and Security Agreement
FORMER NAMES AND COMPANIES
1. Each Borrower's and Subsidiary's correct corporate name, as registered
with the Secretary of State of its state of incorporation, is shown on
Schedule 9.1.4.
2. In the conduct of their businesses during five years preceding the Closing
Date, Borrowers and Subsidiaries have used the following names:
------------------------------------------------------------------------------------------------------------------
Entity Fictitious, Trade or Other Name
------ -------------------------------
------------------------------------------------------------------------------------------------------------------
Kasco Corporation Kasco Service Corporation; Kasco Services Corporation
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Signtech Ltd. Signtech
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Viscor Ltd. ▇▇▇▇▇ Engineered Coated Products; Viscor
------------------------------------------------------------------------------------------------------------------
Southern Saw Acquisition Corporation Atlanta Sharptech; Southern Saw
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, Inc. ▇▇▇▇▇ Products, Inc.
------------------------------------------------------------------------------------------------------------------
3. In the five years preceding the Closing Date, no Borrower or Subsidiary
has been the surviving corporation of a merger or combination, except:
None
4. In the five years preceding the Closing Date, no Borrower or Subsidiary
has acquired any substantial part of the assets of any Person, except:
▇▇▇▇▇ Inc., acquired certain assets of MOX, May 2003
Southern Saw Acquisition Corporation acquired certain assets and assumed certain
liabilities of Southern Saw Holdings, Inc., and Southern Saw Service LP on
October 11, 2006 310454.7
SCHEDULE 9.1.12
to
Loan and Security Agreement
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
1. Borrowers' and Subsidiaries' patents:
---------------------------------------------------------------------------------------------------------------
Patent Federal Registration Registration Owner of Patent
Number Date
---------------------------------------------------------------------------------------------------------------
Laminate structures, methods for 6,703,114 3/9/2004 ▇▇▇▇▇, Inc.
production thereof and uses therefor
---------------------------------------------------------------------------------------------------------------
Multi-dielectric laminates 5,604,017 2/18/1997 ▇▇▇▇▇, Inc.
---------------------------------------------------------------------------------------------------------------
Method of making multi-dielectric 5,569,488 10/29/1996 ▇▇▇▇▇, Inc.
laminates
---------------------------------------------------------------------------------------------------------------
Saw blade for cutting bread and process 5,095,790 3/17/1992 Southern Saw
of using the same Acquisition
Corporation
---------------------------------------------------------------------------------------------------------------
PATENT APPLICATIONS
---------------------------------------------------------------------------------------------------------------
Patent Application Federal Serial Application Owner of Patent
Number Date
---------------------------------------------------------------------------------------------------------------
Low loss prepregs, compositions useful 20060118766 6/8/2006 ▇▇▇▇▇, Inc.
for the preparation thereof and uses
therefor
---------------------------------------------------------------------------------------------------------------
2. Borrowers' and Subsidiaries' trademarks:
U.S. REGISTRATIONS
----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ REG. NO. GOODS/SERVICES IC REG. DATE OWNER
---- -------- -------------- -- --------- -----
----------------------------------------------------------------------------------------------------------------------------
SIGNTECH 1,941,018 Custom manufacture of display sign 040 12/12/95 ▇▇▇▇▇ Signtech, Ltd.
74/613,440 faces
▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------
DI-CLAD 2,414,138 Metal clad plastic laminates used 017 12/19/00 ▇▇▇▇▇, Inc.
75/912,459 as insulation material in
▇▇▇▇▇ electrical, mechanical and like
equipment
----------------------------------------------------------------------------------------------------------------------------
THERMAPAD 1,417,454 Silicone rubber press pads for use 017 11/18/86 ▇▇▇▇▇, Inc.
73/581,689 with electronics manufacturing
Silicone rubber press pads for use
▇▇▇▇▇ with electronics manufacturing
----------------------------------------------------------------------------------------------------------------------------
MII and Design 2,702,029 Pressure sensitive vinyl film for 017 04/01/03 ▇▇▇▇▇, Inc.
76/351,374 die cuts and screen printed decals
and markings for industrial and
commercial use
----------------------------------------------------------------------------------------------------------------------------
CALON 1,162,639 Automotive decorative trim-namely, 012 07/28/81 ▇▇▇▇▇, Inc.
73/198,496 adhesive backed, decorative pin
▇▇▇▇▇ striping of plastic
----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇'▇ 2,134,503 Seasonings, spices, sauces and 030 02/03/98 Kasco Corporation
Kasco 75/257,291 marinades
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ REG. NO. GOODS/SERVICES IC REG. DATE OWNER
---- -------- -------------- -- --------- -----
----------------------------------------------------------------------------------------------------------------------------
HOOK-EYE 0,530,978 Meat saws, saw blades for straight 023 9/19/50 Kasco Corporation
Kasco 71/578,187 saws and band saws, saw frames
----------------------------------------------------------------------------------------------------------------------------
DI-CLAD 0,676,169 Sheets, rods, tubes, tapes, and 001 03/31/59 ▇▇▇▇▇, Inc.
▇▇▇▇▇ 72/507,76 strips made from resinous film
----------------------------------------------------------------------------------------------------------------------------
CUCLAD 0,778,004 Metal coated sheet material for 001 10/06/64 ▇▇▇▇▇, Inc.
▇▇▇▇▇ 72/181,382 general use in the industrial arts
----------------------------------------------------------------------------------------------------------------------------
HOOK-EYE and Design 0,565,388 Renting on a contract basis 100 10/14/52 Kasco Corporation
Kasco 71/578,188 electric meat saws and slicers,
hand meat
----------------------------------------------------------------------------------------------------------------------------
ISOCLAD 1,729,344 Composite laminate consisting of 017 11/03/92 ▇▇▇▇▇, Inc.
74/150,757 metal foil bonded to non-woven
▇▇▇▇▇ composite
----------------------------------------------------------------------------------------------------------------------------
PLASTIPRINT 1,290,623 Dry ink or paint on transfer paper 002 08/21/84 ▇▇▇▇▇ Signtech, Ltd.
73/397,740 backing used to form letters,
symbols and design indicia on sheet
▇▇▇▇▇ plastic metal
----------------------------------------------------------------------------------------------------------------------------
SIGNTECH 2,128,080 Plastic moldings and plastic 017 01/13/98 ▇▇▇▇▇ Signtech, Ltd.
75/033,309 extrusions used to support signs;
vinyl materials and sheets used as
substrates in the printing of
signs; and pressure-sensitive
adhesive films, tapes and ▇▇▇▇▇▇
▇▇▇▇▇ used in the printing of signs
----------------------------------------------------------------------------------------------------------------------------
SIGNTECH 2,126,484 Aluminum and sheet metal frame 006 01/06/98 ▇▇▇▇▇ Signtech, Ltd.
74/613,439 members and sign tensioners
assembled into supports for
▇▇▇▇▇ luminous and non-luminous signs
----------------------------------------------------------------------------------------------------------------------------
FLEXFACE 1,298,368 Sheet plastic material for use in 017 10/02/84 ▇▇▇▇▇ Signtech, Ltd.
73/397,742 making illuminable advertising
▇▇▇▇▇ display signs
----------------------------------------------------------------------------------------------------------------------------
K-THERM 1,627,116 Silicone elastomer insulation 017 12/11/90 ▇▇▇▇▇, Inc.
73/805,889 material used in electrical
▇▇▇▇▇ applications
----------------------------------------------------------------------------------------------------------------------------
LEVEL-WRAP 0,711,155 Extruded silicone rubber 021 02/14/61 ▇▇▇▇▇, Inc.
72/098,059 unsupported tapes used for
▇▇▇▇▇ insulation
----------------------------------------------------------------------------------------------------------------------------
SIGNTECH 1,941,018 Luminous Signs 009 12/12/95 ▇▇▇▇▇ Signtech, Ltd.
74/613,440 Non-luminous, non-mechanical signs 019
▇▇▇▇▇ not of metal
----------------------------------------------------------------------------------------------------------------------------
THERMABOND 1,526,331 Adhesives for printed circuit boards 001 02/28/89 ▇▇▇▇▇, Inc.
73/727,742
----------------------------------------------------------------------------------------------------------------------------
KASCO 1,479,339 Meat cutting tools, namely, plates, 007 03/08/88 Kasco Corporation
73/645,705 knives and band saw blades for the
cutting, grinding, chopping and
mincing of meat in power-operated
Kasco meat-cutting machines
----------------------------------------------------------------------------------------------------------------------------
HOOK-EYE (Stylized) 2,921,180 Electric cutlery sharpening machines 007 01/25/05 Kasco Corporation
76/455,204 Cutlery, namely knives and knife 008
Kasco sharpening
----------------------------------------------------------------------------------------------------------------------------
FOAMCLAD R/F 2,829,520 Copper clad laminated sheet stock 006 04/06/04 ▇▇▇▇▇, Inc.
(Stylized) 76/494,293 for making printed circuit boards
▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ REG. NO. GOODS/SERVICES IC REG. DATE OWNER
---- -------- -------------- -- --------- -----
----------------------------------------------------------------------------------------------------------------------------
TAKING TECHNOLOGY TO 2,249,885 G & S: parts for hand tools, 008 06/01/99 Southern Saw
THE VERY EDGE 75/024,199 namely, handsaw frames and hand saw 009 Acquisition
blades Corporation
Electrical apparatuses, namely
Kasco bandsaw blades, chopper plates for
electric meat grinders and chopper
knives for electric meat grinders
----------------------------------------------------------------------------------------------------------------------------
ATLANTA SHARPTECH 2,239,135 G & S: parts for hand tools, 008 04/13/99 Southern Saw
(Stylized) 75/024,198 namely, handsaw frames and hand saw 009 Acquisition
blades. Corporation
G & S: parts for power tools,
namely, bandsaw blades, chopper
plates for electric meat grinders
and chopper knives for electric
meat grinders.
----------------------------------------------------------------------------------------------------------------------------
ATLANTA SHARPTECH 2,157,207 G & S: parts for power tools, 007 5/12/98 Southern Saw
75/010,032 namely, bandsaw blades, chopper Acquisition
plates for use in chopping meat and Corporation
chopper knives for use in chopping
meat.
----------------------------------------------------------------------------------------------------------------------------
BONEX 1,734,353 G & S: chopper knives, metal 008 11/24/92 Southern Saw
74/216,028 chopper plates, discharge hoses for 006 Acquisition
meat grinders 017 Corporation
----------------------------------------------------------------------------------------------------------------------------
SWIFT TOOTH 1,517,027 G & S: Saw blades for meat cutting 007 12/20/88 Southern Saw
73/721,185 and carcass splitting Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
ZEPHYR BAND 1,498,324 G & S: Band saw blades for cutting 007 8/2/88 Southern Saw
73/700,761 bread Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
SOUTHERN SAW SERVICE 1,338,380 G & S: Leasing and Maintenance of 037 5/28/85 Southern Saw
73/502,192 Cutting Tools for Butchers and the Acquisition
Meat Cutting Industry Corporation
----------------------------------------------------------------------------------------------------------------------------
CRITERIA 1,308,669 G & S: Chopper Plates and Chopper 008 12/11/84 Southern Saw
73/455,990 Knives for Meat Grinders 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
DOUBLE CUT 1,307,683 G & S: Meat Chopper Blades and 007 12/4/84 Southern Saw
73/451,407 Plates for Electrical Meat Choppers 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
KAM-LOK 1,273,162 G & S: Hand Saw Frames for Meat 008 4/3/84 Southern Saw
73/324,050 Cutting and Parts Thereof 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
PRE-EM SYSTEM 1,160,648 G & S: Cutlery for Butchers-Namely, 007 7/14/81 Southern Saw
73/220,490 Power-Operated Chopper Plates and 023 Acquisition
Chopper Knives and Band Saw Blades 008 Corporation
G & S: Butcher Knives, Handsaw
Frames, Handsaw Blades and Cutlery
Sharpening Stones
----------------------------------------------------------------------------------------------------------------------------
PRE-EM PRODUCT 1,185,435 G & S: Cutlery for Butchers-Namely, 007 1/12/82 Southern Saw
73/220,057 Power-Operated Chopper Plates and 023 Acquisition
Chopper Knives and Band Saw Blades 004 Corporation
G & S: Butcher Knives, Handsaw 008
Frames, Handsaw Blades and Cutlery 023
Sharpening Stones.
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ REG. NO. GOODS/SERVICES IC REG. DATE OWNER
---- -------- -------------- -- --------- -----
----------------------------------------------------------------------------------------------------------------------------
PRE-EM SYSTEM 1,160,428 G & S: Leasing Cutting Tools for 042 7/7/81 Southern Saw
73/216,753 Butchers 100 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
POWERMATE 1,086,820 G & S: Chopper knives and chopper 007 3/7/78 Southern Saw
73/103,777 plates for electric meat grinders 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
TI TIGER BAND 1,127,801 G & S: meat cutting band saws 007 12/18/79 Southern Saw
(Stylized) 73/088,547 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
ONE WAY 1,086,816 G & S: band saw blades for meat 007 3/7/78 Southern Saw
(Stylized) 73/061,775 cutting; repair kits for meat 023 Acquisition
cutting band saws 008 Corporation
G & S: hand saw blades for meat
cutting; hand saw frames for meat
cutting; chopper blades and knives
used in meat grinders, professional
meat cutting and carcass splitting
saw blades
----------------------------------------------------------------------------------------------------------------------------
BONUS BAND 0,929,510 G & S: bone and meat cutting band 007 2/22/72 Southern Saw
72/360,918 saws 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
NEEDLE-TIP 0,845,872 G & S: meat cutting, band saw blades 008 3/12/68 Southern Saw
72/266,366 023 Acquisition
Corporation
----------------------------------------------------------------------------------------------------------------------------
"ATSA BOY" 0,723,831 G & S: Spinal Cord Removers, Smear 007 11/14/61 Southern Saw
72/114,549 Removers and Other Meat Market 023 Acquisition
Specialties Used in Processing Meat Corporation
----------------------------------------------------------------------------------------------------------------------------
ATSA 0,723,828 G & S: Spinal Cord Removers, Smear 007 11/14/61 Southern Saw
72/114,360 Removers and Other Meat Market 023 Acquisition
Specialties Used in Processing Meat. Corporation
----------------------------------------------------------------------------------------------------------------------------
Mealtime Gourmet 2,537,233 Pre-seasoned and pre-marinated 029 2/5/02 Kasco Corporation
75/924,220 meats, such as poultry, beef, veal 046
Kasco and pork, and pre-seasoned side
dishes, such as vegetables and fruit
----------------------------------------------------------------------------------------------------------------------------
Mealtime Gourmet 2,589,024 Seasonings and spices 030 7/2/02 Kasco Corporation
75/774,579 046
Kasco
----------------------------------------------------------------------------------------------------------------------------
PENDING U.S. APPLICATIONS
----------------------------------------------------------------------------------------------------------------------------
FILING
▇▇▇▇ SERIAL NO. GOODS/SERVICES IC BASIS DATE OWNER STATUS
---- ---------- -------------- -- ----- ---- ----- ------
----------------------------------------------------------------------------------------------------------------------------
SIGNTECH 78/784,095 Luminous signs 009 ITU 1/3/2006 ▇▇▇▇▇ RESPONSE TO
Non-Luminous, 019 Signtech, OFFICE
non-mechanical signs not Ltd. ACTION DUE
of metal. 12/27/2006
Final.
----------------------------------------------------------------------------------------------------------------------------
FOREIGN REGISTRATIONS
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ COUNTRY REG. NO. GOODS/SERVICES IC REG. DATE STATUS
---- ------- -------- -------------- -- --------- ------
------------------------------------------------------------------------------------------------------------------------------------
CALON Australia A337,311 Plastic film, including 017 08/31/79 Renewal due
P.V.C. film for decorative 08/31/2010
purposes
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Decorative adhesive backed 02/06/98 Renewal due
840416 films including polyvinyl 06/02/2013
chloride for decorative
adhesive backed films
including polyvinyl chloride
for pin striping and other
graphic applications
------------------------------------------------------------------------------------------------------------------------------------
CALON Chile 642689 Plastic films, vinyl graphic 017 09/23/02 Renewal due
560967 films, adhesive films, 09/23/2012
plastic coated paper tapes,
plastic foams, but not
including household or
industrial sealant and
adhesive products
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Plastic films, vinyl graphic 017 10/17/02 Renewal due
02014408 films, adhesive films, 10/17/2012
plastic coated paper tapes,
plastic foams, but not
including household or
industrial sealant and
adhesive products
------------------------------------------------------------------------------------------------------------------------------------
CALON EPC 529271 Paper, backing paper, paper 016 02/25/2000 Renewal Due
tapes, but not including 017 4/29/2007
lining paper or paper for 042
decoration purposes
Plastic films, vinyl graphic
films, adhesive films,
plastic coated paper tapes,
plastic foams, but not
including household or
industrial sealant and
adhesive products
Design services, none
relating to painting,
decorating or interior or
exterior design
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Decorative adhesive backed 016 7/28/97 Renewal Due
291449 film including poly vinyl 4/4/2007
chloride for decorative
adhesive backed film
including poly vinyl chloride
for pin striping and other
graphic applications
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Plastic films, vinyl graphic 017 06/14/02 Renewal due
147469 films, adhesive films, 06/14/2012
plastic coated paper tapes,
plastic foams, but not
including household or
industrial sealant and
adhesive products
------------------------------------------------------------------------------------------------------------------------------------
CALON Uruguay 337866 Plastic films, vinyl graphic 017 07/05/02 Renewal due
films, adhesive films, 07/05/2012
plastic coated paper tapes, *Check if
plastic foams, but not Uruguay
including household or requires use
industrial sealant and affidavits
adhesive products
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ COUNTRY REG. NO. GOODS/SERVICES IC REG. DATE STATUS
---- ------- -------- -------------- -- --------- ------
------------------------------------------------------------------------------------------------------------------------------------
CALON Venezuela P-246583 Plastic films, vinyl graphic 017 08/22/03 Renewal due
2002-004097 films, adhesive films, 8/22/2013
plastic coated paper tapes,
plastic foams, but not
including household or
industrial sealant and
adhesive products
------------------------------------------------------------------------------------------------------------------------------------
CUCLAD Denmark VR 02. 201/77 Electrical insulating material 017 6/24/77 Renewal
6/24/2007
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 017 11/24/95 Renewal due
11/24/2015
------------------------------------------------------------------------------------------------------------------------------------
GLASSKOTE Canada TMA358850 Transparent coatings for 7/28/89 Renewal Due
607417 display sign faces, heat 07/28/2019
transfer coating and
transparent films for use on
flexible plastic display sign
faces which do not include
glass or glass parts
------------------------------------------------------------------------------------------------------------------------------------
HOOK-EYE Canada TMDA38290 Meat cutting equipment, 8/12/1925 Renewal due
namely saws made in whole or 8/12/2020
Kasco in part of metal
------------------------------------------------------------------------------------------------------------------------------------
HOOK-EYE United Kingdom B993358 06/08/72 Renewal Due
6/8/2007
------------------------------------------------------------------------------------------------------------------------------------
IMAGEBURST Australia 737755 Printable media, etc; Plastic 002 8/31/98 Renewal Due
and vinyl films and coatings 016 2/12/2007
------------------------------------------------------------------------------------------------------------------------------------
IMAGEBURST Canada 531229 Printable treated paper in 08/15/00 Renewal due
838970 sheets and rolls for graphic 08/15/2015
art, signs and displays;
printable treated vinyl,
polyester and polypropylene
in sheets and rolls for use
in graphic art, signs and
displays
------------------------------------------------------------------------------------------------------------------------------------
IMAGEBURST EPC 509562 Inkjet printable media made 016 04/01/97 Renewal Due
of material top coated on 4/1/2007
vinyl
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inkjet printable media made 016 7/28/1997 Renewal Due
291668 of material top coated on 4/8/2007
vinyl, paper, Inkjet
printable media made of
material top coated on vinyl,
paper
------------------------------------------------------------------------------------------------------------------------------------
MII and Design EPC 002572147 Pressure sensitive vinyl 016 06/06/03 02/11/2012
films for die cut decals and
screen printed decals and
markings
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 016 11/24/95 Renewal due
11/24/2015
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ COUNTRY REG. NO. GOODS/SERVICES IC REG. DATE STATUS
---- ------- -------- -------------- -- --------- ------
------------------------------------------------------------------------------------------------------------------------------------
SIGNTECH Canada 367395 GOODS: Display signs and 03/30/90 Renewal due
627597 their parts, namely aluminum 03/30/2020
extrusions, aluminum and
sheet metal components for
assembly into display signs.
Paints and inks, vinyl
substrate
Paint transfer paper, namely
paint coated on paper and
transferable to a substrate
by the application of heat,
and heat transfer machines
Sign tensioning devices
Awnings, awning material and
aluminum components for
awnings
Pressure sensitive tape
SERVICES: Decorating of
display sign faces and heat
transfer of decorating of
display sign faces
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 007 11/24/95 Renewal Due
11/24/2015
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 002 11/24/95 Renewal Due
11/24/2015
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 017 11/24/95 Renewal Due
11/24/2015
------------------------------------------------------------------------------------------------------------------------------------
PENDING FOREIGN APPLICATIONS
------------------------------------------------------------------------------------------------------------------------------------
FILING
▇▇▇▇ COUNTRY SERIAL NO. GOODS/SERVICES IC BASIS DATE STATUS
---- ------- ---------- -------------- -- ----- ---- ------
------------------------------------------------------------------------------------------------------------------------------------
CALON Brazil 824349172 Plastic films, vinyl graphic 017 1/31/2002 Published
films, adhesive films, plastic
coated paper tapes, plastic
foams, but not including
household or industrial sealant
and adhesive products
------------------------------------------------------------------------------------------------------------------------------------
3. Borrowers' and Subsidiaries' copyrights:
---------------------------------------------------------------------------------------------------------------------
Status in Federal Registration Registration
Copyrights Owner Copyright Office Number Date
---------- ----- ---------------- ------------ --------
---------------------------------------------------------------------------------------------------------------------
NONE
---------------------------------------------------------------------------------------------------------------------
4. Borrowers' and Subsidiaries' licenses (other than routine business
licenses, authorizing them to transact business in local jurisdictions):
---------------------------------------------------------------------------------------------------------------------
Licensor Description of License Term of License Royalties Payable
-------- ---------------------- --------------- -----------------
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation World "25N" Products 6/3/2018 3.75% of sales
Properties, Inc.
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation "CLTE" Products 7/28/2012 7.5% of sales, minimum
$200,000 annually
---------------------------------------------------------------------------------------------------------------------
SCHEDULE 9.1.15
to
Loan and Security Agreement
ENVIRONMENTAL MATTERS
▇▇▇▇▇, Inc. has received a Notice of Administrative Penalty Assessment and
Secretary's Order (Order No. 2006-A-0043) from the Delaware Department of
Natural Resources and Environmental Control, dated October 4, 2006, a copy of
which has been delivered to Agent.
SCHEDULE 9.1.16
to
Loan and Security Agreement
RESTRICTIVE AGREEMENTS
None.
SCHEDULE 9.1.17
to
Loan and Security Agreement
LITIGATION
1. Proceedings and investigations pending against Borrowers or Subsidiaries:
---------------------------------------------------------------------------------------------------------------------
Title of Action Nature of Action Complaining Parties Jurisdiction or Tribunal
--------------- ---------------- ------------------- ------------------------
---------------------------------------------------------------------------------------------------------------------
See Schedule 9.1.15 for Penalty Assessment Delaware Department of Delaware
Notice of Penalty Assessment Natural Resources
---------------------------------------------------------------------------------------------------------------------
2. The only threatened proceedings or investigations of which any Borrower or
Subsidiary is aware are as follows:
None
SCHEDULE 9.1.19
to
Loan and Security Agreement
PENSION PLANS
1. Borrowers and Subsidiaries have the following Multiemployer Plans:
--------------------------------------------------------------------------------
Party Type of Multiemployer Plan
----- --------------------------
--------------------------------------------------------------------------------
None
--------------------------------------------------------------------------------
2. Borrowers and Subsidiaries have the following Foreign Plans:
--------------------------------------------------------------------------------
Party Description of Plan
----- -------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 9.1.21
to
Loan and Security Agreement
LABOR CONTRACTS
Borrowers and Subsidiaries are party to the following collective bargaining
agreements, management agreements and consulting agreements:
-------------------------------------------------------------------------------------------------------------------
Parties Type of Agreement Term of Agreement
------- ----------------- -----------------
-------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Inc. and United Food and Collective Bargaining (Union) 10/13/2009
Commercial Workers - Textile & Garment
Council Local 266T
-------------------------------------------------------------------------------------------------------------------
SCHEDULE 10.2.2
to
Loan and Security Agreement
EXISTING LIENS
Liens in place resulting from the Second Amendment to the Third Amended Credit
Agreement, dated October 10, 2006, are to be terminated upon payoff from this
Agreement.
SCHEDULE 10.2.17
to
Loan and Security Agreement
EXISTING AFFILIATE TRANSACTIONS
None