SECOND AMENDED AND RESTATED CREDIT AGREEMENTLoan Agreement |
|
|
You are currently viewing: This Loan Agreement involves
FLEETWOOD ENTERPRISES INC | GENERAL ELECTRIC CAPITAL CORPORATION, | BANK OF AMERICA | FLEETWOOD HOLDINGS INC., | FLEETWOOD RETAIL CORP.,. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
Exhibit 10.12
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 1, 2005
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Lenders ;
BANK OF AMERICA, N.A.,
as the Administrative Agent ;
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Syndication Agent ;
FLEETWOOD ENTERPRISES, INC.,
as a Guarantor ;
and
FLEETWOOD HOLDINGS INC., and certain of its Subsidiaries,
and
FLEETWOOD RETAIL CORP., and certain of its Subsidiaries,
as the Borrowers .
TABLE OF CONTENTS
i
ii
iii
iv
ANNEXES, EXHIBITS AND SCHEDULES
v
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 1, 2005 (this “ Agreement ”), among the financial institutions from time to time parties hereto (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”); BANK OF AMERICA, N.A., with an office at 55 South Lake Avenue, Suite 900, Pasadena, California 91101, as the administrative agent for the Lenders (in its capacity as administrative agent, the “ Agent ”); GENERAL ELECTRIC CAPITAL CORPORATION, as the syndication agent for the Lenders (the “Syndication Agent”); FLEETWOOD ENTERPRISES, INC., a Delaware corporation (“ Fleetwood ”), as a Guarantor; FLEETWOOD HOLDINGS INC., a Delaware corporation (“ Holdings ”); FLEETWOOD RETAIL CORP., a Delaware corporation (“ Retail ”); and those Subsidiaries of Holdings and Retail set forth on the signature pages hereto or which become parties hereto hereafter in accordance with the requirements of this Agreement (each of Holdings, Retail and each such Subsidiary individually, a “ Borrower ” and, collectively, the “ Borrowers ”). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed thereto in Annex A , which is attached hereto and incorporated herein; the rules of construction contained therein shall govern the interpretation of this Agreement, and all Annexes, Exhibits and Schedules attached hereto are incorporated herein by reference.
W I T N E S S E T H :
WHEREAS, the Existing Credit Agreement amended and restated the Original Credit Agreement in its entirety on May 14, 2004.
WHEREAS, pursuant to the Existing Credit Agreement the Existing Lenders have extended credit in the form of, among other things, Existing Loans.
WHEREAS, the Borrowers have requested the Lenders continue to make available to the Borrowers a revolving line of credit for loans and letters of credit in an aggregate amount not to exceed $215,000,000 and to make a term loan to FMC in the aggregate principal amount of $22,000,000, and which extension of credit the Borrowers will use for the purposes permitted hereunder;
WHEREAS, Holdings, Retail and their respective Subsidiaries are wholly-owned Subsidiaries of Fleetwood and all Borrowers are engaged in an inter-related business enterprise with an identity of interests, and accordingly the financing provided hereunder will directly and indirectly benefit each of the Borrowers;
WHEREAS, neither Holdings or its Subsidiaries nor Retail or its Subsidiaries would be able to obtain sufficient working capital financing for their respective businesses unless the individual FMC Borrowers and FRC Borrowers were jointly and severally liable for the obligations of FMC or FRC, as applicable, and unless Fleetwood guarantees the obligations of all Borrowers;
WHEREAS, FMC manufactures goods, a portion of which is sold to FRC, and therefore the financing extended hereunder benefits both FMC and FRC;
WHEREAS, the Loan Parties desire that (a) Lenders continue the Existing Loans and Existing Commitments as Revolving Loans and Revolving Credit Commitments hereunder and (b) Lenders agree to amend and restate the Original Credit Agreement (as the same has been previously amended and restated by the Existing Credit Agreement) in its entirety for the purpose of making the amendments reflected herein.
WHEREAS, Lenders have agreed to amend and restate the Original Credit Agreement (as the same has been previously amended and restated by the Existing Credit Agreement) in its entirety for the purpose of making the amendments reflected herein, which amendment and restatement shall become effective on the Closing Date upon satisfaction of the conditions precedent set forth herein.
WHEREAS, the Term Lenders have agreed to make a term loan to FMC upon the terms and conditions set forth in this Agreement.
WHEREAS, Borrowers desire to continue to guarantee and secure all of the Obligations hereunder and under the other Loan Documents to the extent so guaranteed and secured under the Existing Credit Agreement and the Loan Documents, as in effect prior to the date hereof, and as further provided herein.
WHEREAS, the Guarantors have agreed to continue to guarantee and secure the Obligations hereunder and under the other Loan Documents to the extent so guaranteed and secured under the Existing Credit Agreement and the Loan Documents, as in effect prior to the date hereof, and as further provided herein.
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the Lenders, the Agent, Fleetwood and the Borrowers hereby agree as follows:
LOANS AND LETTERS OF CREDIT
1.1 Total Facility . Subject to all of the terms and conditions of this Agreement, the Lenders agree to make available a total credit facility of up to $212,000,000 (the “ Total Facility ”) to the Borrowers from time to time during the term of this Agreement; provided that the Total Facility shall be increased to a total amount of up to $237,000,000 for the period from and including December 1 through and including April 30 of each calendar year. The Total Facility shall be composed of a revolving line of credit consisting of Revolving Loans and Letters of Credit and the Term Loan described herein. On the Closing Date, the Lenders (directly or through funding and settlement by the Agent) shall purchase and assume the Revolving Credit Commitments (as defined in the Existing Credit Agreement) and the Existing Loans from the Existing Lenders at par, free and clear of adverse claims, participations or other encumbrances, which Existing Commitments and Existing Loans and the Existing Credit Agreement shall be (immediately upon such purchase and assumption by the Lenders) amended and restated in their entirety as more particularly described herein, and neither the Loan Parties nor the Lenders shall be subject to or bound by any of the terms or provisions of the Existing
2
Credit Agreement (other than such terms or provisions that are to survive termination of the Existing Credit Agreement or the payment of the Obligations as provided by the express terms of the Existing Credit Agreement) and shall only be subject to or bound by the terms and provisions of this Agreement in respect of the Revolving Credit Commitments, Loans, other Obligations and the transactions contemplated hereby, as set forth herein. The parties acknowledge and agree that this Agreement and the other Loan Documents do not constitute a novation, payment and reborrowing or termination of the obligations under the Existing Credit Agreement and that all such obligations are in all respects continued and outstanding as obligations under this Agreement and the Notes with only the terms being modified from and after the Closing Date as provided in this Agreement, the Notes and the other Loan Documents.
1.2 Revolving Loans .(a) (i) Amounts . Subject to the satisfaction of the conditions precedent set forth in Article 8 , and except for Non-Ratable Loans and Agent Advances, each Revolving Credit Lender severally, but not jointly, agrees, upon a Borrower’s request from time to time on any Business Day during the period from the Closing Date to the Termination Date, to make revolving loans (the “ Revolving Loans ”) to the Borrowers in aggregate amounts not to exceed such Lender’s Pro Rata Share of the Aggregate Availability. The Revolving Credit Lenders, however, in their unanimous discretion, may elect to make Revolving Loans or issue or arrange to have issued Letters of Credit in excess of the Aggregate Borrowing Bases or the Borrowing Base of FMC or FRC, as applicable, on one or more occasions, but if they do so, neither the Agent nor the Revolving Credit Lenders shall be deemed thereby to have changed the limits of the Borrowing Base of FMC or FRC, or the Aggregate Borrowing Bases or to be obligated to exceed such limits on any other occasion.(ii) At the request of any Revolving Credit Lender, each of the FMC Borrowers and each of the FRC Borrowers shall execute and deliver to such Lender a single note to evidence the Revolving Loans of that Lender. Each note shall be in the principal amount of the Revolving Credit Lender’s Pro Rata Share of the Revolving Credit Commitments, dated the date hereof and substantially in the form of Exhibit A-1 (each such note, together with any new note issued pursuant to Section 11.2 upon the assignment of any portion of any Revolving Credit Lender’s Revolving Loans and Revolving Credit Commitment a “ Revolving Loan Note ” and, collectively, the “ Revolving Loan Notes ”). Each Revolving Loan Note shall represent the obligation of each of FMC and FRC to pay the amount of such Revolving Credit Lender’s Pro Rata Share of the Revolving Credit Commitments, or, if less, such Revolving Credit Lender’s Pro Rata Share of the aggregate unpaid principal amount of all Revolving Loans to FMC or FRC, as applicable, together with interest thereon as prescribed in Section 1.2 . The entire unpaid balance of the Revolving Loans and all other non-contingent Obligations shall be immediately due and payable in full in immediately available funds on the Termination Date.
3
(b) Procedure for Borrowing .(i) Each Borrowing shall be made upon a Borrower’s irrevocable written notice delivered to the Agent in the form of a notice of borrowing (“ Notice of Borrowing ”), which must be received by the Agent prior to (i) 10:00 a.m. (Los Angeles time) three Business Days prior to the requested Funding Date, in the case of LIBOR Rate Loans and (ii) 10:00 a.m. (Los Angeles time) on the requested Funding Date, in the case of Base Rate Loans, specifying:(1) the amount of the Borrowing, which in the case of a LIBOR Rate Loan must equal or exceed $1,000,000 (and increments of $500,000 in excess of such amount);(2) the requested Funding Date, which must be a Business Day;(3) whether the Revolving Loans requested are to be Base Rate Revolving Loans or LIBOR Rate Loans (and if not specified, it shall be deemed a request for a Base Rate Revolving Loan); and(4) the duration of the Interest Period for LIBOR Rate Loans (and if not specified, it shall be deemed a request for an Interest Period of one month);provided , however , that with respect to the Borrowings to be made on the Initial Funding Date, such Borrowings will consist of Base Rate Revolving Loans only.
(ii) In lieu of delivering a Notice of Borrowing, a Borrower may give the Agent telephonic notice of such request for advances to its Designated Account on or before the deadline set forth above. The Agent at all times shall be entitled to rely on such telephonic notice in making such Revolving Loans, regardless of whether any written confirmation is received.(iii) The Borrowers shall have no right to request a LIBOR Rate Loan while a Default or Event of Default has occurred and is continuing.(c) Reliance upon Authority . Prior to the Closing Date, the Borrowers shall deliver to the Agent a notice setting forth the accounts of each of FMC and FRC (each, a “ Designated Account ”) to which the Agent is authorized to transfer the proceeds of the Revolving Loans requested hereunder by each of FMC and FRC. Any of FMC and FRC may designate a replacement account from time to time by written notice. All such Designated Accounts must be reasonably satisfactory to the Agent. The Agent is entitled to rely conclusively on any person’s request for Revolving Loans on behalf of any Borrower, so long as the proceeds thereof are to be transferred to the applicable Designated Account. The Agent has no duty to verify the identity of any individual representing himself or herself as a person authorized by any Borrower to make such requests on its behalf.
4
(d) No Liability . The Agent shall not incur any liability to the Borrowers as a result of acting upon any notice referred to in Sections 1.2(b) and (c) , which the Agent believes in good faith to have been given by an officer or other person duly authorized by the applicable Borrower to request Revolving Loans on its behalf. The crediting of Revolving Loans to the applicable Designated Account conclusively establishes the obligation of the applicable Borrowers to repay such Revolving Loans as provided herein.(e) Notice Irrevocable . Any Notice of Borrowing (or telephonic notice in lieu thereof) made pursuant to Section 1.2(b) shall be irrevocable. A Borrower shall be bound to borrow the funds requested therein in accordance therewith.(f) The Agent’s Election . Promptly after receipt of a Notice of Borrowing (or telephonic notice in lieu thereof), the Agent shall elect to have the terms of Section 1.2(g) or the terms of Section 1.2(h) apply to such requested Borrowing. If the Bank declines in its sole discretion to make a Non-Ratable Loan pursuant to Section 1.2(h) , the terms of Section 1.2(g) shall apply to the requested Borrowing.(g) Making of Revolving Loans . If the Agent elects to have the terms of this Section 1.2(g) apply to a requested Borrowing, then promptly after receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall notify the Revolving Credit Lenders by telecopy, telephone or e-mail of the requested Borrowing. Each Revolving Credit Lender shall transfer its Pro Rata Share of the requested Borrowing to the Agent in immediately available funds, to the account from time to time designated by the Agent, not later than 12:00 noon (Los Angeles time) on the applicable Funding Date. After the Agent’s receipt of all proceeds of such Revolving Loans, the Agent shall make the proceeds of such Revolving Loans available to the applicable Borrower on the applicable Funding Date by transferring same day funds to the Designated Account of the applicable Borrower; provided , however , that the amount of Revolving Loans so made to FMC or FRC on any date shall not exceed its Availability on such date, unless all of the Revolving Credit Lenders otherwise agree.(h) Making of Non-Ratable Loans .(i) If the Agent elects, with the consent of the Bank, to have the terms of this Section 1.2(h) apply to a requested Borrowing, the Bank shall make a Revolving Loan in the amount of that Borrowing available to the applicable Borrower on the applicable Funding Date by transferring same day funds to such Borrower’s Designated Account. Each Revolving Loan made solely by the Bank pursuant to this Section is herein referred to as a “ Non-Ratable Loan ”, and such Revolving Loans are collectively referred to as the “ Non-Ratable Loans .” Each Non-Ratable Loan shall be subject to all the terms and conditions applicable to other Revolving Loans except that all payments thereon shall be payable to the Bank solely for its own account. The aggregate amount of Non-
5
Ratable Loans outstanding at any time shall not exceed $10,000,000. The Agent shall not request the Bank to make any Non-Ratable Loan if (1) the Agent has received written notice from any Revolving Credit Lender that one or more of the applicable conditions precedent set forth in Article 8 will not be satisfied on the requested Funding Date for the applicable Borrowing, and such conditions have not been waived in accordance with this Agreement or (2) the requested Borrowing by FMC or FRC would exceed its Availability on that Funding Date.(ii) The Non-Ratable Loans shall be secured by the Agent’s Liens in and to the Collateral and shall constitute Base Rate Revolving Loans and Obligations hereunder.(i) The Agent Advances .(i) Subject to the limitations set forth below, the Agent is authorized by the Borrowers and the Revolving Credit Lenders, from time to time in the Agent’s sole discretion, (A) after the occurrence of a Default or an Event of Default, or (B) at any time that any of the other conditions precedent set forth in Article 8 have not been satisfied, to make Base Rate Revolving Loans to the Borrowers on behalf of the Revolving Credit Lenders in an aggregate amount outstanding at any time not to exceed $7,500,000 which the Agent, in its reasonable business judgment, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (3) to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including costs, fees and expenses as described in Section 13.7 (any of such advances are herein referred to as “ Agent Advances ”); provided , that (x) in no event shall the Aggregate Revolver Outstandings at any time exceed the aggregate Revolving Credit Commitments and (y) the Majority Lenders may at any time revoke the Agent’s authorization to make Agent Advances. Any such revocation must be in writing and shall become effective prospectively upon the Agent’s receipt thereof.(ii) Agent Advances shall be secured by the Agent’s Liens in and to the Collateral and shall constitute Base Rate Revolving Loans and Obligations hereunder.1.3 Term Loan .(a) Amount of Term Loan . Each Term Lender severally agrees to make a term loan (any such term loan being referred to as a “ Lender Term Loan ” and such term loans being referred to collectively as the “ Term Loan ”) to FMC on the Closing Date, upon the satisfaction of the conditions precedent set forth in Article 8 , in an amount equal to such Term Lender’s Pro Rata Share of $22,000,000. The Term Loan shall initially be a Base Rate Loan.
6
(b) Making of Term Loan . Each Lender Term Loan shall be made available by each Term Lender to the Agent in same day funds, to the Agent’s designated account, not later than 12:00 noon (Los Angeles time) on the Closing Date. After the Agent’s receipt of the proceeds of such Term Loan, upon satisfaction of the conditions precedent set forth in Article 8 , the Agent shall make the proceeds of such Term Loan available to FMC on such date by transferring same day funds equal to the proceeds of such Term Loan received by the Agent to FMC’s Designated Account or as FMC shall otherwise instruct in writing.(c) Term Loan Notes . At the request of any Term Lender, FMC shall execute and deliver to Agent on behalf of each Term Lender, on the Closing Date, a promissory note, substantially in the form of Exhibit A-2 attached hereto and made a part hereof (such promissory notes, together with any new notes issued pursuant to Section 11.2 upon the assignment of any portion of any Lender Term Loan, being hereinafter referred to collectively as the “ Term Loan Notes ” and each of such promissory notes being hereinafter referred to individually as a “ Term Loan Note ”). The Term Loan Notes, if any, shall evidence the Lender Term Loan of each Term Lender in an original principal amount equal to that Term Lender’s Pro Rata Share of $22,000,000 and with other appropriate insertions. Each Term Loan Note, if any, shall be dated the Closing Date and shall mature on the Stated Termination Date. Each payment shall be payable to the Agent for the account of the applicable Term Lender. The Term Loan shall be payable in full on the earlier of (x) the date on which this Agreement is terminated for any reason and (y) the date the Revolving Credit Commitments are terminated or have expired. Payment or prepayment of the Term Loan may not be reborrowed.1.4 Letters of Credit .(a) Agreement to Issue or Cause to Issue . Subject to the terms and conditions of this Agreement, the Agent agrees (i) to cause the Letter of Credit Issuer to issue for the account of a Borrower one or more commercial/documentary and standby letters of credit (“ Letter of Credit ”) and/or (ii) to provide credit support or other enhancement to a Letter of Credit Issuer acceptable to the Agent, which issues a Letter of Credit for the account of a Borrower (any such credit support or enhancement being herein referred to as a “ Credit Support ”) from time to time during the term of this Agreement.(b) Amounts; Outside Expiration Date . The Agent shall not have any obligation to issue or cause to be issued any Letter of Credit or to provide Credit Support for any Letter of Credit at any time if: (i) the maximum face amount of the requested Letter of Credit is greater than the Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn amount of the requested Letter of Credit and all commissions, fees, and charges due from the Borrowers in connection with the opening thereof would exceed the Aggregate Availability at such time; or, as to any Letter of Credit issued for the account of FMC, would exceed the Availability of FMC at that time or, as to any Letter of Credit issued
7
for the account of FRC, would exceed the Availability of FRC at that time, or (iii) such Letter of Credit has an expiration date less than 30 days prior to the Stated Termination Date or more than 12 months from the date of issuance for standby letters of credit and 180 days for documentary letters of credit. With respect to any Letter of Credit which contains any “evergreen” or automatic renewal provision, each Lender shall be deemed to have consented to any such extension or renewal unless any Revolving Credit Lender shall have provided to the Agent written notice that it declines to consent to any such extension or renewal at least thirty (30) days prior to the date on which the Letter of Credit Issuer is entitled to decline to extend or renew the Letter of Credit. If all of the requirements of this Section 1.4 are met and no Default or Event of Default has occurred and is continuing, no Lender shall decline to consent to any such extension or renewal.(c) Other Conditions . In addition to conditions precedent contained in Article 8 , the obligation of the Agent to cause to be issued any Letter of Credit or to provide Credit Support for any Letter of Credit is subject to the following conditions precedent having been satisfied in a manner reasonably satisfactory to the Agent:(i) The applicable Borrower shall have delivered to the Letter of Credit Issuer, at such times and in such manner as such Letter of Credit Issuer may prescribe, an application in form and substance satisfactory to such Letter of Credit Issuer and reasonably satisfactory to the Agent for the issuance of the Letter of Credit and such other documents as may be required pursuant to the terms thereof, and the form, terms and purpose of the proposed Letter of Credit shall be reasonably satisfactory to the Agent and the Letter of Credit Issuer; and(ii) As of the date of issuance, no order of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that the proposed Letter of Credit Issuer refrain from, the issuance of letters of credit generally or the issuance of such Letters of Credit.(d) Issuance of Letters of Credit .(i) Request for Issuance . A Borrower must notify the Agent of a requested Letter of Credit at least three (3) Business Days prior to the proposed issuance date. Such notice shall be irrevocable and must specify the original face amount of the Letter of Credit requested, the Business Day of issuance of such requested Letter of Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the Business Day on which the requested Letter of Credit is to expire, the purpose for which such Letter of Credit is to be issued, and the
8
beneficiary of the requested Letter of Credit. The Borrower shall attach to such notice the proposed form of the Letter of Credit.(ii) Responsibilities of the Agent; Issuance . As of the Business Day immediately preceding the requested issuance date of the Letter of Credit, the Agent shall determine the amount of the applicable Unused Letter of Credit Subfacility, the Availability of FMC or FRC, as applicable and the Aggregate Availability. If (i) the face amount of the requested Letter of Credit is less than the Unused Letter of Credit Subfacility and (ii) the amount of such requested Letter of Credit and all commissions, fees, and charges due from the Borrower in connection with the opening thereof would not exceed the Availability of FMC or FRC, as applicable, the Agent shall cause the Letter of Credit Issuer to issue the requested Letter of Credit on the requested issuance date so long as the other conditions hereof are met.(iii) No Extensions or Amendment . The Agent shall not be obligated to cause the Letter of Credit Issuer to extend or amend any Letter of Credit issued pursuant hereto unless the requirements of this Section 1.4 are met as though a new Letter of Credit were being requested and issued.(e) Payments Pursuant to Letters of Credit . Each of FMC or FRC, as applicable, agrees to reimburse immediately the Letter of Credit Issuer for any draw under any Letter of Credit issued for its benefit and the Agent for the account of the Revolving Credit Lenders upon any payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer the amount of all other charges and fees payable to the Letter of Credit Issuer in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against the Letter of Credit Issuer or any other Person. Each drawing under any Letter of Credit shall constitute a request by the applicable Borrower to the Agent for a Borrowing of a Base Rate Revolving Loan in the amount of such drawing. The Funding Date with respect to such borrowing shall be the date of such drawing.(f) Indemnification; Exoneration; Power of Attorney .(i) Indemnification . In addition to amounts payable as elsewhere provided in this Section 1.4 , each of FMC, FRC and Fleetwood agrees to protect, indemnify, pay and save the Lenders and the Agent harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) which any Lender or the Agent (other than a Lender in its capacity as Letter of Credit Issuer) may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit or the provision of any Credit Support or enhancement in connection therewith. The Borrowers’ obligations under this Section shall survive payment of all other Obligations.
9
(ii) Assumption of Risk by the Borrowers . As among the Borrowers, the Lenders, and the Agent but subject to subsection (iv) below, the Borrowers assume all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, subject to subsection (iv) below, the Lenders and the Agent shall not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of and presentation of drafts with respect to any of the Letters of Credit, even if it should prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (C) the failure of the beneficiary of any Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (D) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) errors in interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (G) the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; (H) any consequences arising from causes beyond the control of the Lenders or the Agent, including any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority; or (I) the Letter of Credit Issuer’s honor of a draw for which the draw or any certificate fails to comply in any respect with the terms of the Letter of Credit. None of the foregoing shall affect, impair or prevent the vesting of any rights or powers of the Agent or any Lender under this Section 1.4(f) .(iii) Exoneration . Without limiting the foregoing, no action or omission whatsoever by the Agent or any Lender with respect to any Letter of Credit issued hereunder (excluding any Lender in its capacity as a Letter of Credit Issuer) shall result in any liability of the Agent and/or Lender to any Borrower, or relieve any Borrower of any of its obligations hereunder to any such Person.(iv) Rights Against Letter of Credit Issuer . Nothing contained in this Agreement is intended to limit a Borrower’s rights, if any, with respect to the Letter of Credit Issuer which arise as a result of the letter of credit application and related documents executed by and between such Borrower and the Letter of Credit.(v) Account Party . Each Borrower hereby authorizes and directs any Letter of Credit Issuer to name such Borrower as the “Account Party” therein and to deliver to the Agent all instruments, documents and other writings and property received by the Letter of Credit Issuer pursuant to the Letter of Credit, and to accept and rely upon the Agent’s instructions and agreements with
10
respect to all matters arising in connection with the Letter of Credit or the application therefor.(g) Supporting Letter of Credit; Cash Collateral . If, notwithstanding the provisions of Section 1.4(b) and Section 10.1 , any Letter of Credit or Credit Support is outstanding upon the termination of this Agreement, then upon such termination FMC or FRC as applicable, shall deposit with the Agent, for the ratable benefit of the Agent and the Revolving Credit Lenders, with respect to each Letter of Credit or Credit Support then outstanding, cash (“ Cash Collateral ”) or a standby letter of credit (a “ Supporting Letter of Credit ”) in form and substance satisfactory to the Agent, issued by an issuer satisfactory to the Agent, in each case in an amount equal to the greatest amount for which such Letter of Credit or such Credit Support may be drawn plus any fees and expenses associated with such Letter of Credit or such Credit Support, under which Supporting Letter of Credit the Agent is entitled to draw amounts necessary to reimburse the Agent and the Revolving Credit Lenders for payments to be made by the Agent and the Revolving Credit Lenders under such Letter of Credit or Credit Support and any fees and expenses associated with such Letter of Credit or Credit Support. Such Supporting Letter of Credit and/or Cash Collateral shall be held by the Agent, for the ratable benefit of the Agent and the Revolving Credit Lenders, as security for, and to provide for the payment of, the aggregate undrawn amount of such Letters of Credit or such Credit Support remaining outstanding.1.5 Bank Products . A Borrower may request and the Agent may, in its sole and absolute discretion, arrange for a Borrower to obtain from the Bank or the Bank’s Affiliates Bank Products although no Borrower is required to do so. If Bank Products so requested by a Borrower are provided by an Affiliate of the Bank, each Borrower agrees to indemnify and hold the Agent, the Bank and the Lenders harmless from any and all costs and obligations now or hereafter incurred by the Agent, the Bank or any of the Lenders which arise from any indemnity given by the Agent to its Affiliates related to such Bank Products; provided , however , nothing contained herein is intended to limit the Borrower’s rights, with respect to the Bank or its Affiliates, if any, which arise as a result of the execution of documents by and between such Borrower and the Bank which relate to Bank Products. The agreement contained in this Section shall survive termination of this Agreement. Each Borrower acknowledges and agrees that the obtaining of Bank Products from the Bank or the Bank’s Affiliates (a) is in the sole and absolute discretion of the Bank or the Bank’s Affiliates, and (b) is subject to all rules and regulations of the Bank or the Bank’s Affiliates.
1.6 Joint and Several Obligations; Contribution Rights .(a) All Obligations of FMC shall be the joint and several Obligations of the FMC Borrowers and all Obligations of FRC shall be the joint and several Obligations of the FRC Borrowers, regardless of which Borrower actually receives any Loans or other extensions of credit under the Loan Documents, the amount received by any Borrower or the manner in which any Borrower, the Agent or any Lender accounts for such Loans and other extensions of credit.
11
(b) To the extent that any Borrower is a guarantor or a surety as a result of the joint and several obligations hereunder, such Obligations and the Liens securing such Obligations shall not be released or impaired by any action or inaction on the part of the Agent or any Lender which would otherwise constitute the release of a surety. Without limiting the generality of the foregoing, the liability of any Borrower under this Agreement shall not be affected or impaired in any manner by, (i) the failure of any Person to become or remain a Borrower or guarantor or the failure of the Agent or any Lender to preserve, protect or enforce any right to require any Person to become or remain a Borrower or guarantor, (ii) any taking, failure to take, failure to create, perfect or ensure the priority of, or exchange, release or termination or lapse of any Lien securing any Obligations, or any taking, failure to take, release or amendment or waiver of or consent to departure from any other guaranty of, any of the Obligations, (iii) any manner or order of sale or other enforcement of any Lien securing any of the Obligations or any manner or order of application of the proceeds of any such Lien to the payment of the Obligations or any failure to enforce any Lien or to apply any proceeds thereof, (iv) any furnishing, exchange, substitution or release of any collateral securing the Obligations, or any failure to perfect any Lien in any of the collateral securing the Obligations, or (v) any other circumstance which might otherwise constitute a defense (except the final payment in full) available to, or a discharge of, a surety or guarantor.(c) To the extent that any Borrower is a guarantor or a surety as a result of the joint and several obligations hereunder, the liability of each such Borrower under this Agreement shall remain valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than final payment in full of the Obligations), including the occurrence of any of the following, whether or not such Borrower shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Loan Documents, at law, in equity or otherwise) with respect to the Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to Events of Default) of the Credit Agreement, any of the other Loan Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Obligations, in each case whether or not in accordance with the terms of this Agreement, such Loan Document or any agreement relating to such other guaranty or security; (iii) the Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source to the payment of any liability other than the Obligations, even though the Lenders might have elected to apply such payment to any part or all of the Obligations; (v) any consent by any Lender or the Agent to the change, reorganization or termination of the corporate structure or existence
12
of any other Borrower, or any other Person and to any corresponding restructuring of the Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Obligations; (vii) any defenses (except the defense of final payment in full), set-offs or counterclaims which any Borrower, any guarantor or any other Person may allege or assert against the Agent or any Lender in respect of the Obligations, including, for example, failure of consideration, breach of warranty, statute of frauds, statute of limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Borrower as an obligor in respect of the Obligations.(d) To the extent that any Borrower is a guarantor or a surety as a result of the joint and several obligations hereunder, to the maximum extent permitted by law, each such Borrower hereby waives and agrees not to assert or take advantage of: (i) any defense now existing or hereafter arising based upon any legal disability or other defense of any other Borrower or any guarantor or other Person, or by reason of the cessation or limitation of the liability of any other Borrower or any guarantor or other Person from any cause other than full payment and performance of all obligations due under this Agreement or any of the other Loan Documents; (ii) any defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of any other Borrower or any guarantor or other Person, or any defect in the formation of any other Borrower or any guarantor or other Person; (iii) the unenforceability or invalidity of any security or guaranty or the lack of perfection or continuing perfection, or failure of priority of any security for the Obligations; (iv) any and all rights and defenses arising out of an election of remedies by the Agent or any Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for an Obligation, has destroyed such Borrower’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise; (v) any defense based upon any failure to disclose to such Borrower any information concerning the financial condition of any other Borrower or any guarantor or other Person or any other circumstances bearing on the ability of any other Borrower or any guarantor or other Person to pay and perform all obligations due under this Agreement or any of the other Loan Documents; (vi) any failure by the Agent or any Lender to give notice to any Borrower or any guarantor or other Person of the sale or other disposition of security, and any defect in notice given by the Agent or any Lender in connection with any such sale or disposition of security; (vii) any failure of the Agent or any Lender to comply with applicable laws in connection with the sale or disposition of security, including, without limitation, any failure by the Lender to conduct a commercially reasonable sale or other disposition of such security; (viii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal, or that reduces a surety’s or guarantor’s obligations in proportion to the principal’s obligation; (ix) any use of cash collateral under Section 363 of the Bankruptcy Code; (x) any defense based upon an election by the Agent or any
13
Lender, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code or any successor statute; (xi) any defense based upon any borrowing or any grant of a security interest under Section 364 of the Bankruptcy Code; (xii) any right of subrogation, any right to enforce any remedy which the Agent or any Lender may have against any other Borrower or any guarantor or other Person and any right to participate in, or benefit from, any security now or hereafter held by the Agent or any Lender for the Obligations; (xiii) presentment, demand, protest and notice of any kind, including notice of acceptance of this Agreement and of the existence, creation or incurring of new or additional Obligations; (xiv) the benefit of any statute of limitations affecting the liability of any other Borrower or any guarantor or other Person, enforcement of this Agreement or any other Loan Documents, the liability of any Borrower hereunder or the enforcement hereof; (xv) all notices of intention to accelerate and/or notice of acceleration of the Obligations; (xvi) relief from any applicable valuation or appraisement laws; (xvii) any other action by the Agent or any Lender, whether authorized by this Agreement or otherwise, or any omission by the Agent or any Lender or other failure of the Agent or any Lender to pursue, or delay in pursuing, any other remedy in its power; (xviii) any and all claims and/or rights of counterclaim, recoupment, setoff or offset; and (xix) any defense based upon the application of the proceeds of a Loan for purposes other than the purposes represented by the Borrowers or intended or understood by the Agent or any Lender or any Borrower. Each Borrower agrees that the payment and performance of all Obligations or any part thereof or other act which tolls any statute of limitations applicable to this Agreement or the other Loan Documents shall similarly operate to toll the statute of limitations applicable to such Borrower’s liability hereunder. Without limiting the generality of the foregoing or any other provision hereof, each Borrower further waives any and all rights and defenses that such Borrower may have because the debt of the Borrowers is secured by real property of other Borrowers; this means, among other things, that: (1) the Lenders may collect from such Borrower without first foreclosing on any real or personal property collateral pledged by any other Borrower, (2) if the Agent or any Lender forecloses on any real property collateral pledged by any other Borrower, then (A) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (B) the Agent or any Lender may collect from such Borrower even if the Agent or any Lender, by foreclosing on the real property collateral, has destroyed any right such Borrower may have to collect from any other Borrower. The foregoing sentence is an unconditional and irrevocable waiver of any rights and defenses each Borrower may have because the Obligations are secured by real property of any other Borrower. Each Borrower acknowledges and agrees that California Civil Code Section 2856 authorizes and validates waivers of a guarantor’s rights of subrogation and reimbursement and waivers of certain other rights and defenses available to a guarantor under California law. Based on the preceding sentence and without limiting the generality of the foregoing waivers contained in this subparagraph or any other provision hereof, each Borrower expressly waives to the extent
14
permitted by law any and all rights and defenses (except the defense of indefeasible final payment in full), including without limitation any rights of subrogation, reimbursement, indemnification and contribution (except contribution pursuant to this Agreement), which might otherwise be available to such Borrower under California Civil Code Sections 2787 to 2855, inclusive, 2899 and 3433 and under California Code of Civil Procedure Sections 580a, 580b, 580d and 726 (or any of such sections), or any other jurisdiction to the extent the same are applicable to this Agreement or the agreements, covenants or obligations of any Borrower hereunder.(e) Each Borrower is fully aware of the financial condition of the FRC Borrowers or the FMC Borrowers, as applicable, and is executing and delivering this Agreement based solely upon such Borrower’s own independent investigation of all matters pertinent hereto and is not relying in any manner upon any representation or statement by the Agent or any Lender. Each Borrower hereby assumes full responsibility for obtaining any additional information concerning the financial condition of the FRC Borrowers, the FMC Borrowers or any other guarantor or their respective properties, financial condition and prospects and any other matter pertinent hereto as such Borrower may desire, and such Borrower is not relying upon or expecting the Agent or any Lender to furnish to such Borrower any information now or hereafter in the possession of the Agent or any Lender concerning the same or any other matter. By executing this Agreement, each Borrower knowingly accepts the full range of risks encompassed within a contract of this type, which risks such Borrower acknowledges. No Borrower shall have the right to require the Agent or any Lender to obtain or disclose any information with respect to the Obligations, the financial condition or prospects of any Borrower, the ability of any Borrower to pay or perform the Obligations, the existence, perfection, priority or enforceability of any collateral security for any or all of the Obligations, the existence or enforceability of any other guaranties of all or any part of the Obligations, any action or non-action on the part of the Agent or any Lender, any Borrower or any other Person, or any other event, occurrence, condition or circumstance whatsoever.(f) To the extent that any Borrower is a guarantor or a surety as a result of the joint and several obligations hereunder, the Obligations of each such FMC Borrower and each such FRC Borrower shall be limited in amount to an amount not to exceed the maximum amount of such obligations and liabilities that can be made or assumed by such Borrower without rendering such obligation or liability void or voidable under applicable laws relating to fraudulent conveyance, fraudulent transfer or similar laws affecting the rights of creditors generally, in each case giving effect to all liabilities of such Borrower other than any liabilities in respect of intercompany indebtedness to the extent that it would be discharged in the amount paid by such Borrower hereunder and giving effect to all rights of subrogation, contribution, reimbursement, indemnity or similar rights pursuant to applicable law or any agreement (the “ Maximum Liability ”).
15
(g) (i) Each FMC Borrower hereby agrees that to the extent that an FMC Borrower makes any payment on behalf of FMC, such FMC Borrower shall be entitled to seek and receive contribution and indemnification from and to be reimbursed by each other FMC Borrower in an amount equal to a fraction of such payment, the numerator of which is the Maximum Liability of the FMC Borrower making the payment and the denominator of which is the Maximum Liability of all FMC Borrowers as of the date of determination. Each FMC Borrower’s right of contribution shall be subject to the terms and conditions of Section 1.6(h) . The provisions of this Section 1.6(g)(i) shall in no respect limit the obligations and liabilities of any FMC Borrower to the Lenders and each FMC Borrower shall remain liable to the Lenders for the full amount of its liabilities hereunder.
(ii) Each FRC Borrower hereby agrees that to the extent that an FRC Borrower makes any payment on behalf of FRC, such FRC Borrower shall be entitled to seek and receive contribution and indemnification from and to be reimbursed by each other FRC Borrower in an amount equal to a fraction of such payment, the numerator of which is the Maximum Liability of the FRC Borrower making the payment and the denominator of which is the Maximum Liability of all FRC Borrowers as of the date of determination. Each FRC Borrower’s right of contribution shall be subject to the terms and conditions of Section 1.6(h) . The provisions of this Section 1.6(g)(ii) shall in no respect limit the obligations and liabilities of any FRC Borrower to the Lenders and each FRC Borrower shall remain liable to the Lenders for the full amount of its liabilities hereunder.
(h) No FMC Borrower or FRC Borrower shall be entitled to be subrogated to any of the rights of the Agent or any Lender against or any other FMC Borrower or FRC Borrower or any collateral security or guarantee or right to offset held by the Agent or any Lender for the payment of the Obligations of FMC or FRC, as the case may be, nor shall any FMC Borrower or FRC Borrower seek or be entitled to seek any contribution or reimbursement from or any other FMC Borrower or FRC Borrower in respect of payments made by such Borrower hereunder, until all amounts owing to the Agent or any Lender on account of the Obligations of FMC or FRC, as the case may be, are paid in full, no Letter of Credit shall be outstanding and the Revolving Credit Commitments are terminated or have expired. If any amount shall be paid to any FMC Borrower or FRC Borrower on account of such subrogation rights at any time not permitted hereunder, such amount shall be held by such Borrower in trust for the Agent and the Lenders, segregated from other funds of such Borrower, and shall, forthwith upon receipt, be turned over to the Agent in the exact form received (duly endorsed to the Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Agent may determine.
1.7 Borrowing Agency Provisions .(a) At the request of, and solely as an accommodation to, Borrowers, the Lenders have agreed to make the Loans to, and to issue Letters of Credit for the FMC Borrowers and the FRC Borrowers on a joint and several basis as co-
16
borrowers. In order to facilitate the co-borrowing arrangement, each FMC Borrower hereby irrevocably designates Holdings to be its agent and attorney-in-fact for purposes of the Loan Documents, and each FRC Borrower hereby irrevocably designates Retail to be its agent and attorney-in-fact for purposes of the Loan Documents, and each of them hereby irrevocably authorizes such agent in such capacity to take such actions on behalf of the applicable FMC Borrower or FRC Borrower, as the case may be, and to exercise such powers under this Agreement and the other Loan Documents on such Borrower’s behalf as may otherwise be exercised by such Borrower, together with such powers as are incidental thereto, including without limitation to borrow Loans, to execute and deliver Notices of Borrowing, Notices of Conversion/Continuation, requests for Letters of Credit, Borrowing Base Certificates and such other documents, instruments and certificates required by the Loan Documents in connection with any Borrowing or repayment of the Loans, to borrow, repay, reborrow, convert and continue Loans and to receive proceeds of Loans and to give all other notices and consents hereunder. Each Borrower further irrevocably authorizes the Agent to act on all such documents, instruments and certificates delivered by such agents and attorneys-in-fact, and to pay over and credit the proceeds of any Loans so requested to the Designated Account of FMC or FRC, as applicable. Each of Holdings and Retail hereby accepts the appointment to act as agent and attorney in fact for the FMC Borrowers and the FRC Borrowers, as the case may be. The Agent and each Lender shall be entitled to rely absolutely on the appointment and authorization of Holdings to act on behalf of the FMC Borrowers and of Retail to act on behalf of the FRC Borrowers with respect to all matters relating to this Agreement and the other Loan Documents, whether or not any provision of this Agreement or any other Loan Documents specifically provides that action may or shall be taken by Holdings or Retail on behalf of the FMC Borrowers or the FRC Borrowers. The Agent and the Lenders may give all notices to any FMC Borrower to Holdings and to any FRC Borrower to Retail. Each Borrower agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by Holdings or Retail, as the case may be, shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.(b) All Borrowers acknowledge and agree that the Borrowers are engaged in an integrated operation that requires financing on the basis of credit availability to each Borrower, that the co-borrowing arrangement has been established at the request of the Borrowers, and that each Borrower expects to derive, directly or indirectly, benefit from such credit availability to the other Borrowers. Neither the Agent nor the Letter of Credit Issuer nor any Lender shall incur any liability to Borrowers or any other Loan Party as a result of the co-borrowing arrangement established by this Agreement and shall not have any liability or responsibility to the Borrowers to inquire into the allocation, apportionment or use of the proceeds of any Loans or extensions of credit hereunder. To induce the Agent, the Letter of Credit Issuer and the Lenders to establish this co-borrowing arrangement and in consideration thereof, each
17
Borrower hereby indemnifies the Agent, the Letter of Credit Issuer and the Lenders, and their respective successors and assigns, and agrees to hold each of them harmless from any and all liabilities, expenses, losses, damages and claims asserted against them by any Person arising from or incurred by reason of the handling of the financing arrangements of the Borrowers as provided in this Agreement, any reliance by the Agent, the Letter of Credit Issuer or any Lender on any document, request or instruction given by the agents designated by the FMC Borrowers and the FRC Borrowers herein to act on their behalf or any other action taken by the Agent, the Letter of Credit Issuer or the Lenders with respect to the co-borrowing arrangement; provided , however , that no Borrower shall have an obligation to indemnify any of the Agent, the Letter of Credit Issuer or any Lender under this Section 1.7 with respect to any liabilities finally determined by a court of competent jurisdiction to have resulted primarily from the gross negligence or willful misconduct of such indemnified party. The agreements of the Borrowers contained in this Section 1.7 shall survive payment of all other Obligations.1.8 Senior Indebtedness . All Obligations of Fleetwood under this Agreement and the other Loan Documents, and all rights of contribution, indemnity, subrogation and reimbursement relating to the Obligations of any Loan Party with respect to Fleetwood, are “Senior Indebtedness” under the 2003 Subordinated Debentures. All Obligations of Fleetwood under this Agreement and the other Loan Documents to the extent such Obligations are (A) liabilities of Fleetwood for borrowed money or under any reimbursement obligation relating to a letter of credit, surety bond or similar instrument, or (B) liabilities of Fleetwood evidenced by a bond, note, debenture or similar instrument, or (C) liabilities of others described in the preceding clauses (A) and (B) that Fleetwood has guaranteed or that are otherwise its legal liability, or (D) deferrals renewals, extensions or refundings of any liability of the types referred to in clauses (A), (B) and (C) above, are “Senior Indebtedness” under the Subordinated Debentures, the New Subordinated Debentures and Fleetwood’s guaranty of the Trust Securities.
INTEREST AND FEES
2.1 Interest .(a) Interest Rates. All outstanding Obligations shall bear interest on the unpaid principal amount thereof (including, to the extent permitted by law, on interest thereon not paid when due) from the date made until paid in full in cash at a rate determined by reference to the Base Rate or the LIBOR Rate plus the Applicable Margin, but not to exceed the Maximum Rate. If at any time Loans are outstanding with respect to which a Borrower has not delivered to the Agent a notice specifying the basis for determining the interest rate applicable thereto in accordance herewith, those Loans shall bear interest at a rate determined by reference to the Base Rate until notice to the contrary has been given to the Agent in accordance with this Agreement and such notice has become effective. Except as otherwise provided herein, the outstanding Obligations shall bear interest as follows:
18
(i) For each Base Rate Lender Term Loan at a fluctuating per annum rate equal to the Base Rate plus the Applicable Margin;(ii) For all Base Rate Revolving Loans and other Obligations (other than Base Rate Lender Term Loans and LIBOR Rate Loans) at a fluctuating per annum rate equal to the Base Rate plus the Applicable Margin;(iii) For all LIBOR Lender Term Loans at a per annum rate equal to the LIBOR Rate plus the Applicable Margin; and(iv) For all LIBOR Revolving Loans at a per annum rate equal to the LIBOR Rate plus the Applicable Margin.Each change in the Base Rate shall be reflected in the interest rate applicable to Base Rate Loans as of the effective date of such change. All interest charges shall be computed on the basis of a year of 360 days and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). The applicable Borrowers shall pay to the Agent, for the ratable benefit of the applicable Lenders, interest accrued on all Base Rate Loans in arrears on the first day of each month hereafter and on the Termination date. The Borrowers shall pay to the Agent, for the ratable benefit of Lenders, interest on all LIBOR Rate Loans in arrears on each LIBOR Interest Payment Date.
(b) Default Rate . If any Default or Event of Default occurs and is continuing and the Agent or the Majority Lenders in their discretion so elect, then, from the date that the Agent gives written notice to Holdings and FRC of the Agents’ or the Majority Lenders’ election and so long as such Default or Event of Default is continuing, all of the Obligations shall bear interest at the Default Rate applicable thereto; provided that from the date of the occurrence of an Event of Default under Section 9.1(a) with respect to any Term Loan Obligation, the Term Loan Obligations shall automatically bear interest at the Default Rate applicable thereto so long as any such Event of Default is continuing.2.2 Continuation and Conversion Elections .(a) FMC or FRC may:(i) elect, as of any Business Day, in the case of Base Rate Revolving Loans to convert any such Base Rate Revolving Loans (or any part thereof in an amount not less than $1,000,000, or that is in an integral multiple of $500,000 in excess thereof) into LIBOR Rate Loans; or(ii) elect, as of any Business Day, in the case of Base Rate Lender Term Loans to convert any such Base Rate Lender Term Loans (or any part thereof in an amount not less than $1,000,000, or that is in an integral multiple of $500,000 in excess thereof) into LIBOR Rate Loans; or
19
(iii) elect, as of the last day of the applicable Interest Period, to continue any LIBOR Rate Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $1,000,000, or that is in an integral multiple of $500,000 in excess thereof);provided , that if at any time the aggregate amount of LIBOR Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $1,000,000, such LIBOR Rate Loans shall automatically convert into Base Rate Loans; provided further that if the notice shall fail to specify the duration of the Interest Period, such Interest Period shall be one month.
(b) FMC or FRC shall deliver a notice of continuation/conversion (“ Notice of Continuation/Conversion ”) to the Agent not later than 10:00 a.m. (Los Angeles time) at least three (3) Business Days in advance of the Continuation/Conversion Date, if the Loans are to be converted into or continued as LIBOR Rate Loans and specifying:(i) the proposed Continuation/Conversion Date;(ii) the aggregate amount of Loans to be converted or renewed;(iii) the type of Loans resulting from the proposed conversion or continuation; and(iv) the duration of the requested Interest Period, provided , however , the Borrowers may not select an Interest Period that ends after the Stated Termination Date.(c) If upon the expiration of any Interest Period applicable to LIBOR Rate Loans, FMC or FRC, as the case may be, has failed to select timely a new Interest Period to be applicable to LIBOR Rate Loans or if any Default or Event of Default then exists, the applicable Borrower(s) shall be deemed to have elected to convert such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.(d) The Agent will promptly notify each Lender of its receipt of a Notice of Continuation/Conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Lender.(e) There may not be more than seven (7) different LIBOR Rate Loans in effect hereunder at any time.2.3 Maximum Interest Rate . In no event shall any interest rate provided for hereunder exceed the maximum rate legally chargeable by any Lender under applicable law for such Lender with respect to loans of the type provided for hereunder (the “ Maximum Rate ”). If, in any month, any interest rate, absent such limitation, would have exceeded the Maximum Rate, then the interest rate for that month shall be the Maximum Rate, and, if in future months, that
20
interest rate would otherwise be less than the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time as the amount of interest paid hereunder equals the amount of interest which would have been paid if the same had not been limited by the Maximum Rate. In the event that, upon payment in full of the Obligations, the total amount of interest paid or accrued under the terms of this Agreement is less than the total amount of interest which would, but for this Section 2.3 , have been paid or accrued if the interest rate otherwise set forth in this Agreement had at all times been in effect, then the Borrowers shall, to the extent permitted by applicable law, pay the Agent, for the account of the Lenders, an amount equal to the excess of (a) the lesser of (i) the amount of interest which would have been charged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest which would have accrued had the interest rate otherwise set forth in this Agreement, at all times, been in effect over (b) the amount of interest actually paid or accrued under this Agreement. If a court of competent jurisdiction determines that the Agent and/or any Lender has received interest and other charges hereunder in excess of the Maximum Rate, such excess shall be deemed received on account of, and shall automatically be applied to reduce, the Obligations other than interest, in the inverse order of maturity, and if there are no Obligations outstanding, the Agent and/or such Lender shall refund to the applicable Borrower(s) such excess.
2.4 Closing Fee . The Borrowers, jointly and severally, agree to pay the Agent on the Closing Date a closing fee (the “ Closing Fee ”) as set forth in the Fee Letter.
2.5 Unused Line Fee . On the first day of each month and on the Termination Date the Borrowers, jointly and severally, agree to pay to the Agent, for the account of the Revolving Credit Lenders, in accordance with their respective Pro Rata Shares, an unused line fee (the “ Unused Line Fee ”) equal to percentage per annum set forth in the definition of Applicable Margin times the amount by which the Maximum Revolver Amount exceeded the sum of the average daily outstanding amount of Revolving Loans and the average daily undrawn face amount of outstanding Letters of Credit, during the immediately preceding month or shorter period if calculated for the first month hereafter or on the Termination Date. The Unused Line Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed. All principal payments received by the Agent shall be deemed to be credited to the applicable Borrowers’ Loan Account immediately upon receipt for purposes of calculating the Unused Line Fee pursuant to this Section 2.5 .
2.6 Letter of Credit Fee . FMC or FRC, as applicable, agree to pay to the Agent, for the account of the Revolving Credit Lenders, in accordance with their respective Pro Rata Shares, for each Letter of Credit, a fee (the “ Letter of Credit Fee ”) equal to the percentage per annum set forth in the definition of Applicable Margin times the undrawn face amount of each Letter of Credit and to the Agent for the benefit of the Letter of Credit Issuer a fronting fee of one-eighth of one percent (0.125%) per annum of the undrawn face amount of each Letter of Credit, and to the Letter of Credit Issuer, all out-of-pocket costs, fees and expenses incurred by the Letter of Credit Issuer in connection with the application for, processing of, issuance of, or amendment to any Letter of Credit. The Letter of Credit Fee shall be payable monthly in arrears on the first day of each month following any month in which a Letter of Credit is outstanding and on the Termination Date. The Letter of Credit Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed.
21
2.7 [RESERVED].2.8 Substitution of Property . Borrowers may from time to time provide substitute real property collateral (the “ Substituted Property ”) for any real property Collateral; provided that for each such substitution (a “ Property Substitution ”) the following conditions are satisfied with respect to such Property Substitution and the applicable Substituted Property:
(a) no Default or Event of Default has occurred and is continuing both before and after giving effect to such Property Substitution;(b) the Flexibility Conditions are satisfied as of the date of and both before and immediately after giving effect to such Property Substitution;(c) the applicable Substituted Property is free and clear of all Liens other than Liens described in clauses (a), (b) and (e) of the definition of Permitted Liens;(d) Agent shall have received an appraisal (in form and substance and by an appraiser reasonably satisfactory to Agent) for the applicable Substituted Property (the “ Substituted Property Appraisal ”), dated no more than six (6) months prior to the date of such Property Substitution;(e) the appraised value of the applicable Substituted Property, as set forth in the Substituted Property Appraisal be equal to or greater than the value, as reasonably determined by Agent, of the portion of the Collateral being replaced (the “ Replaced Property ”);(f) Agent shall have received each of the following:(i) a fully executed Mortgage (the “ Substituted Property Mortgage ”) with respect to each parcel of the Substituted Property, in substantially the form of the Mortgages delivered on or prior to the Closing Date, with such modifications thereto as shall be advisable and are reasonably acceptable to the Agent with respect to the local jurisdictions in which the Substitute Property is located;(ii) an ALTA extended coverage title policy or policies, in form and substance and in amounts and with such endorsements as are reasonably acceptable to the Agent, with respect to each Substituted Property Mortgage;(iii) duly executed UCC-3 Termination Statements or such other instruments or evidence, in form and substance satisfactory to the Agent, as shall be necessary to terminate and satisfy all Liens, if any, on the Substituted Property; and(iv) to the extent reasonably requested by the Agent or the Majority Lenders, environmental audits, surveys, title reports and any other document reasonably requested by the Agent, the Majority Lenders or any
22
Lender, as applicable, with respect to the Substituted Property, in each case in form and substance satisfactory to the Agent, the Majority Lenders and such Lender, as applicable; and(v) opinions of counsel for the Borrower which is the owner of the Substituted Property as the Agent shall reasonably request, in a form, scope and substance reasonably satisfactory to the Agent and its counsel;(g) Borrowers shall have paid all reasonable costs related to such Property Substitution, including, but not limited to, reasonable attorney’s fees or fees related to appraisers, and consultants, filing fees and the cost of ALTA extended coverage title policies for the Substituted Property required above, in connection with any request for Property Substitution, and as a condition to such substitution, Borrowers shall have provided evidence to Agent that Borrowers have paid, or made arrangement satisfactory to Agent for the payment of, all such costs which became due and payable prior to or concurrently with such Property Substitution; and(h) Borrowers shall execute such other documents and agreements as Agent may require to encumber the Substituted Property and amend the Loan Documents to reflect the replacement of the Substitute Property for the Replaced Property; and(i) no default or event of default has occurred and is continuing both before and after giving effect to such Property Substitution under the terms of any Subordinated Debt.Upon a substitution of Substituted Property pursuant to the provisions of this Section 2.8 , all Liens on the Replaced Property in favor of the Agent for the benefit of itself and the Lenders shall be released and the Lenders hereby authorize the Agent to execute such documents and take such further action as reasonably requested by the Borrowers or determined by the Agent, in furtherance of this Section 2.8 . For the avoidance of doubt, following the substitution of any Replaced Property with any Substituted Property in accordance with this Section 2.8 , such Replaced Property shall no longer constitute Mortgaged Property, Term Loan Collateral or Real Estate Subfacility Assets for any purpose under this Agreement and Schedule 6.11 shall be deemed modified accordingly.
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans . FMC or FRC shall repay the outstanding principal balance of the Revolving Loans made to it, plus all accrued but unpaid interest thereon, on the Termination Date. A Borrower may prepay Revolving Loans at any time, and reborrow subject to the terms of this Agreement. In addition, and without limiting the generality of the foregoing, upon demand FMC or FRC, as applicable, shall pay to the Agent, for account of the Revolving Credit Lenders, the amount, without duplication, by which its Aggregate Revolver Outstandings exceeds the lesser of its Borrowing Base or the Maximum Revolver Amount.
23
3.2 Termination of Facility . The Borrowers may terminate this Agreement upon at least thirty days’ notice to the Agent and the Lenders, upon (a) the payment in full of all outstanding Revolving Loans, together with accrued interest thereon, and the cancellation and return of all outstanding Letters of Credit (or the provision of Cash Collateral or a Supporting Letter of Credit in accordance with Section 1.4(g) above), (b) the prepayment in full of the Term Loan, together with accrued interest thereon, (c) the payment of the early termination fee set forth below, (d) the payment in full in cash of all reimbursable expenses and other Obligations, and (e) with respect to any LIBOR Rate Loans prepaid, payment of the amounts due under Section 4.4 , if any. If this Agreement is terminated prior to the first anniversary of the First Amendment and Restatement Date, whether pursuant to this Section 3.2 or pursuant to Section 9.2 , Borrowers shall pay to the Agent, for the accounts of the Lenders, in proportion to their respective Pro Rata Shares, an early termination fee equal to one percent (1%) of the Total Facility. If this Agreement is terminated on or after the first anniversary of the First Amendment and Restatement Date but prior to the second anniversary of the First Amendment and Restatement Date, whether pursuant to this Section 3.2 or pursuant to Section 9.2 , Borrowers shall pay to the Agent, for the accounts of the Lenders, in proportion to their respective Pro Rata Shares, an early termination fee equal to one-half of one percent (0.5%) of the Total Facility. No early termination fee shall be payable if this Agreement is terminated after the second anniversary of the First Amendment and Restatement Date. The foregoing notwithstanding, no early termination fee shall be payable hereunder in connection with a refinancing of the Obligations with a credit facility arranged or provided by another lending department of the Agent.
3.3 Repayment of the Term Loan .(a) Amortization of Term Loan.(i) On the first day of each Fiscal Quarter commencing October 31, 2005, FMC agrees to repay the principal amount of the Term Loan in an amount equal to $785,715.00.(ii) On the Stated Termination Date, FMC agrees to repay the outstanding principal amount of and all accrued and unpaid interest on the Term Loan.(b) Term Lenders . FMC agrees to repay the principal of the Term Loan to the Agent, for the account of the Lenders as set forth in Section 1.3 .(c) Application of Prepayments . Any prepayments of the Term Loan hereunder shall be applied first, to the repayment of the Term Loan required pursuant to Section 3.3(a)(ii) , and second , to the repayment of the Term Loan required pursuant to Section 3.3(a)(i) in inverse order of maturity.3.4 Prepayments of the Loans .(a) FMC may prepay the principal of the Term Loan in whole or in part, at any time and from time to time upon at least 5 Business Days’ prior written notice to the Agent and the Term Lenders. All voluntary prepayments of
24
the principal of the Term Loan shall be accompanied by the payment of all accrued but unpaid interest on the Term Loan to the date of prepayment. Amounts prepaid in respect of the Term Loan may not be reborrowed.(b) Immediately upon receipt by any Loan Party of proceeds of any disposition of Real Estate Subfacility Assets, FMC shall repay the Revolving Loans in an amount equal to the amount advanced against the applicable asset in calculation of the Borrowing Base, if any, and the Maximum Real Estate Loan Amount shall be permanently reduced by such amount.(c) Immediately upon any receipt by any Loan Party of proceeds of any disposition of any Term Loan Collateral, FMC shall repay the Term Loan in an amount equal to all such proceeds, net of (A) commissions and other customary transaction costs, fees and expenses properly attributable to such transaction and payable by a Loan Party in connection therewith (other than any amounts payable to any Affiliate), (B) transfer taxes, (C) amounts payable to holders of senior Liens (to the extent that such Liens are Permitted Liens), if any and (D) an appropriate reserve for income taxes in accordance with GAAP in connection therewith (the “ Net Proceeds ”). After the Term Loan has been repaid in full, any remaining Net Proceeds shall be applied to the Revolving Loans, but without reduction of the Revolving Credit Commitments.(d) Immediately upon any receipt by any Loan Party of proceeds (other than assets or other property received in exchange for any Equipment sold, traded-in or exchanged pursuant to Section 7.9(b) hereof) of any assets (other than Inventory sold in the ordinary course of business, the Borrowers shall repay the Revolving Loans in an amount equal to all such proceeds, net of (A) commissions and other customary transaction costs, fees and expenses properly attributable to such transaction and payable by a Loan Party in connection therewith (other than any amounts payable to any Affiliate), (B) transfer taxes, (C) amounts payable to holders of senior Liens (to the extent that such Liens are Permitted Liens), if any, and (D) an appropriate reserve for income taxes in accordance with GAAP in connection therewith (the “ Net Proceeds ”), but without reduction of the Revolving Credit Commitments.(e) Concurrently with an FRC Borrower Release (including, without limitation, any such FRC Borrower Release effected upon an FRC Disposition made in compliance with Section 7.9(f) ), the Borrowers shall repay the Revolving Loans in an amount equal to the amount advanced against the Eligible Accounts, Eligible Inventory or any other property of the FRC Borrower being released in such FRC Borrower Release, but without reduction of the Revolving Credit Commitments.(f) Concurrently with the sale of the Capital Stock of the Identified Subsidiary, the Borrowers shall repay the Revolving Loans in an amount equal to the amount advanced against the Eligible Accounts and Eligible Inventory of the
25
Identified Subsidiary, but without reduction of the Revolving Credit Commitments.(g) [RESERVED].(h) [RESERVED].(i) No provision contained in this Section 3.4 shall constitute a consent to an asset disposition that is otherwise not permitted by the terms of this Agreement.3.5 LIBOR Rate Loan Prepayments . In connection with any prepayment, if any LIBOR Rate Loans are prepaid prior to the expiration date of the Interest Period applicable thereto, the applicable Borrower shall pay to the Revolving Credit Lenders the amounts described in Section 4.4 .
3.6 Payments by the Borrowers .(a) All payments to be made by the Borrowers shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by the Borrowers shall be made to the Agent for the account of the Revolving Credit Lenders or Term Lenders, as applicable, at the account designated by the Agent and shall be made in Dollars and in immediately available funds, no later than 12:00 noon (Los Angeles time) on the date specified herein. Any payment received by the Agent after such time shall be deemed (for purposes of calculating interest only) to have been received on the following Business Day and any applicable interest shall continue to accrue.(b) Subject to the provisions set forth in the definition of “ Interest Period ”, whenever any payment is due on a day other than a Business Day, such payment shall be due on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.3.7 Payments as Revolving Loans . At the election of the Agent, all payments of principal of or interest on the Revolving Loans, reimbursement obligations in connection with Letters of Credit and Credit Support for Letters of Credit, fees, premiums, reimbursable expenses and other sums payable hereunder (other than the Term Loan) may be paid from the proceeds of Revolving Loans made hereunder. Proceeds of Revolving Loans may be used to make payments of the Term Loan Obligations only if: (a) for payments of the Term Loan Obligations under Section 3.3(a)(i), no Event of Default has occurred and is continuing, and (b) for payments of Term Loan Obligations under Section 3.3(a)(ii), (x) no Event of Default has occurred and is continuing, and (y) a Minimum Liquidity Event, as of the date of such prepayment, shall not have occurred, after giving effect to such prepayment. Each Borrower hereby irrevocably authorizes the Agent to charge the applicable Loan Account for the purpose of paying all amounts from time to time due from FMC and FRC or any FMC Borrower or FRC Borrower and agrees that all such amounts charged shall constitute Revolving Loans (including Non-Ratable Loans and Agent Advances).
26
3.8 Apportionment, Application and Reversal of Payments . Principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Loans to which such payments relate held by each Lender). All payments shall be remitted to the Agent and all such payments not relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of Accounts, or except as set forth below with respect to Term Loan Collateral, other Collateral received by the Agent, shall be applied, ratably, subject to the provisions of this Agreement, first , to pay any fees, indemnities, or expense reimbursements (other than amounts related to Bank Products) then due to the Agent or the Lenders from the applicable Borrower; second , to pay interest due from such Borrower in respect of all Loans, including Non-Ratable Loans and Agent Advances; third , to pay or prepay principal of the Non-Ratable Loans and Agent Advances owed by such Borrower; fourth , to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement obligations in respect of Letters of Credit; fifth , if an Event of Default has occurred and is continuing to pay an amount to the Agent equal to all outstanding Letter of Credit Obligations of such Borrower to be held as cash collateral for such Obligations; sixth , to pay or prepay principal of the Term Loan owed by such Borrower; seventh , to the payment of any other Obligation (other than amounts related to Bank Products) due to the Agent or any Lender by such Borrower and eighth , to pay any fees, indemnities or expense reimbursements related to Bank Products due to the Agent from the applicable Borrower. Notwithstanding the foregoing, until the Term Loan has been paid in full, proceeds of the Term Loan Collateral shall be applied first to pay any fees, indemnities or expense reimbursements relating to the Term Loan or the Term Loan Collateral then due to the Agent or the Lenders from FMC; second , to pay interest due from FMC in respect to the Term Loan; third , to pay or prepay principal of the Term Loan; and fourth , to all other Obligations in accordance with the preceding sentence. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the applicable Borrower, or unless an Event of Default has occurred and is continuing, neither the Agent nor any Lender shall apply any payments which it receives to any LIBOR Rate Loan, except (a) on the expiration date of the Interest Period applicable to any such LIBOR Rate Loan, or (b) in the event, and only to the extent, that there are no outstanding Base Rate Loans and, in any event, the applicable Borrower shall pay LIBOR breakage losses in accordance with Section 4.4 . Upon the occurrence and during the continuation of an Event of Default and, prior thereto in order to correct any error, the Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Obligations.
3.9 Indemnity for Returned Payments . If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Agent, any Lender, the Bank or any Affiliate of the Bank is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Agent, such Lender, the Bank or any Affiliate of the Bank and the Borrowers shall be liable to pay to the Agent and the Lenders, and hereby indemnify the Agent and the Lenders and hold the Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 3.9 shall be and remain effective notwithstanding any contrary action which may have been taken by the
27
Agent or any Lender, the Bank or any Affiliate of the Bank in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Agent’s and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 3.9 shall survive the termination of this Agreement.
3.10 The Agent’s and Lenders’ Books and Records; Monthly Statements . The Agent shall record the principal amount of the Loans owing to each Lender, the undrawn face amount of all outstanding Letters of Credit and the aggregate amount of unpaid reimbursement obligations outstanding with respect to the Letters of Credit from time to time on its books. In addition, each Lender may note the date and amount of each payment or prepayment of principal of such Lender’s Loans in its books and records. Failure by the Agent or any Lender to make such notation shall not affect the obligations of the applicable Borrower with respect to the Loans or the Letters of Credit. Each Borrower agrees that the Agent’s and each Lender’s books and records showing the Obligations and the transactions pursuant to this Agreement and the other Loan Documents shall be admissible in any action or proceeding arising therefrom, and shall constitute rebuttably presumptive proof thereof, irrespective of whether any Obligation is also evidenced by a promissory note or other instrument. The Agent will provide to the Borrowers a monthly statement of Loans, payments, and other transactions pursuant to this Agreement. Such statement shall be deemed correct, accurate, and binding on the Borrowers and an account stated (except for reversals and reapplications of payments made as provided in Section 3.8 and corrections of errors discovered by the Agent), unless the Borrowers notify the Agent in writing to the contrary within thirty (30) days after such statement is rendered. In the event a timely written notice of objections is given by the Borrowers, only the items to which exception is expressly made will be considered to be disputed by the Borrowers.
3.11 Release of FRC Borrower . Provided that no Default or Event of Default has occurred and is continuing (or would occur or exist as a result of or following the release of an FRC Borrower pursuant to this Section 3.11 ), Fleetwood shall have the right, subject to the provisions of this Section 3.11 , to obtain a release of an FRC Borrower (each, an “ FRC Borrower Release ”) from its Obligations under this Agreement and the other Loan Documents (including without limitation, in connection with any FRC Disposition). In the event Fleetwood seeks to obtain an FRC Borrower Release, the Agent shall release such FRC Borrower (each a “ Released FRC Borrower ”) from this Agreement and the other Loan Documents, but only upon satisfaction of all of the following conditions:
(a) Any request for an FRC Borrower Release shall be made in writing to the Agent no less than five (5) Business Days prior to the date of the requested FRC Borrower Release;(b) the FRC Borrowers make any payment required pursuant to Section 3.4(e) in connection with such FRC Borrower Release;(c) the FRC Borrowers shall pay all of the Agent’s reasonable costs and expenses, including counsel fees and disbursements, incurred in connection with the FRC Borrower Release and the review and approval of the documents and information required to be delivered in connection therewith; and
28
(d) the FRC Borrowers shall deliver to the Agent simultaneously with the request referred to in clause (a) above, an FRC Borrowing Base Certificate signed by an Authorized Officer of FRC, representing and certifying the pro forma calculations after giving effect to the proposed FRC Borrower Release.Upon the release of an FRC Borrower pursuant to the provisions of this Section 3.11 , at the request of such FRC Borrower, all Liens granted by such FRC Borrower pursuant to the Loan Documents shall also be released provided that Borrowers have provided Agent with release documents in form and substance reasonably satisfactory to Agent.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes .(a) Any and all payments by the Borrowers to each Lender or the Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for any Taxes. In addition, the Borrowers shall pay all Other Taxes.(b) Each Borrower agrees to indemnify and hold harmless each Lender and the Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section) paid by any Lender or the Agent and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date such Lender or the Agent makes written demand therefor.(c) If a Borrower shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, then:(i) the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) such Lender or the Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions or withholdings been made;(ii) such Borrower shall make such deductions and withholdings;(iii) such Borrower shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and(iv) such Borrower shall also pay to each Lender or the Agent for the account of such Lender, at the time interest is paid, all additional amounts
29
which the respective Lender specifies as necessary to preserve the after-tax yield such Lender would have received if such Taxes or Other Taxes had not been imposed.(d) At the Agent’s request, within 30 days after the date of any payment by a Borrower of Taxes or Other Taxes, such Borrower shall furnish the Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to the Agent. If any Borrower determines in good faith that a reasonable basis exists for contesting any Taxes or Other Taxes, at the request of such Borrower, the relevant Lender shall cooperate with such Borrower in challenging such Tax or Other Tax at such Borrower’s expense (but shall have no obligation to disclose any confidential information with respect to such Lender). No Lender shall have any obligation to contest any Tax or Other Tax, except to cooperate with the Borrowers in any contest requested by a Borrower as provided herein. If any Lender becomes aware that it has received a refund for any Tax or Other Tax for which a payment has been made to it by the Borrowers under this Section, which in the good faith judgment of such Lender is allocable to such payment, the amount of such refund shall be paid to the applicable Borrower(s) to the extent that such Borrower(s) have paid in full the payments required by this Section 4.1(e) If a Borrower is required to pay additional amounts to any Lender or the Agent pursuant to subsection (c) of this Section, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its lending office so as to eliminate any such additional payment by such Borrower which may thereafter accrue, if such change in the judgment of such Lender is not otherwise disadvantageous to such Lender.4.2 Illegality .(a) If any Revolving Credit Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Revolving Credit Lender or its applicable lending office to make LIBOR Rate Loans, then, on notice thereof by that Revolving Credit Lender to the Borrowers through the Agent, any obligation of that Revolving Credit Lender to make LIBOR Rate Loans shall be suspended until that Revolving Credit Lender notifies the Agent and the Borrowers that the circumstances giving rise to such determination no longer exist.(b) If a Revolving Credit Lender determines that it is unlawful to maintain any LIBOR Rate Loan, the Borrowers shall, upon receipt of notice of such fact and demand from such Revolving Credit Lender (with a copy to the Agent), prepay in full such LIBOR Rate Loans of that Revolving Credit Lender then outstanding, together with interest accrued thereon and amounts required under Section 4.4 , either on the last day of the Interest Period thereof, if that
30
Revolving Credit Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if that Revolving Credit Lender may not lawfully continue to maintain such LIBOR Rate Loans. If the Borrowers are required to so prepay any LIBOR Rate Loans, then concurrently with such prepayment, the applicable Borrower shall borrow from the affected Revolving Credit Lender, in the amount of such repayment, a Base Rate Loan.4.3 Increased Costs and Reduction of Return .(a) If any Lender determines that due to either (i) the introduction of any Requirement of Law, or any change in any Requirement of Law, or any change in the interpretation of any Requirement of Law or (ii) the compliance by that Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then the Borrowers shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs.(b) If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender or any corporation or other entity controlling such Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation or other entity controlling such Lender and (taking into consideration such Lender’s or such corporation’s or other entity’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines that the amount of such capital is increased as a consequence of its Revolving Credit Commitments, Loans, credits or obligations under this Agreement, then, upon demand of such Lender to the Borrowers through the Agent, the Borrowers shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender for such increase.4.4 Funding Losses . FMC or FRC, as the case may be, shall reimburse each Revolving Credit Lender and hold each Revolving Credit Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:
(a) the failure of the applicable Borrower(s) to make on a timely basis any payment of principal of any LIBOR Rate Loan;(b) the failure of the applicable Borrower(s) to borrow, continue or convert a Loan after such Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of Continuation/Conversion; or
31
(c) the prepayment or other payment (including after acceleration thereof) of any LIBOR Rate Loans on a day that is not the last day of the relevant Interest Period;including any such loss of anticipated profit and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall also pay any customary administrative fees charged by any Lender in connection with the foregoing.
4.5 Inability to Determine Rates . If the Agent determines that for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to the Revolving Credit Lenders of funding such Loan, the Agent will promptly so notify the Borrowers and each Revolving Credit Lender. Thereafter, the obligation of the Revolving Credit Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspended until the Agent revokes such notice in writing; and the Agent shall promptly deliver such notice after it determines that the reason for such suspension no longer exists. Upon receipt of such notice of suspension, Borrowers may revoke any Notice of Borrowing or Notice of Continuation/Conversion then submitted by it. If the applicable Borrower does not revoke such Notice, the Revolving Credit Lenders shall make, convert or continue the Loans, as proposed by the applicable Borrower, in the amount specified in the applicable notice submitted by such Borrower, but such Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 Certificates of the Agent .(a) If any Lender claims reimbursement or compensation under this Article 4 (an “ Affected Lender ”), the Agent shall determine the amount thereof and shall deliver to the Borrowers (with a copy to the Affected Lender) a certificate setting forth in reasonable detail the amount payable to the Affected Lender, and such certificate shall be conclusive and binding on the Borrowers in the absence of manifest or demonstrable error.
(b) Without limiting its obligations to reimburse an Affected Lender for compensation theretofore claimed by an Affected Lender pursuant to this Article 4, Borrowers may, within 60 days following any demand by an Affected Lender, request that one or more Persons that are Eligible Assignees and that are approved by the Administrative Agent (which approval shall not be unreasonably withheld) purchase all (but not part) of the Affected Lender’s then outstanding Loans, and assume its Pro Rata Share of the Revolving Credit Commitments and its obligations hereunder; provided that such request may not be made, and the Administrative Agent and the Lenders shall have no obligations under this Section 4.6(b), if and to the extent that the basis for any such reimbursement or compensation with respect to such Affected Lender is, in the judgment of the Administrative Agent, applicable to the Required Lenders or has resulted or could reasonably be expected to result in any claim for reimbursement or compensation
32
under this Article 4 by the Required Lenders. If one or more such Eligible Assignees so agree in writing (each, an “ Assuming Lender ,” and collectively, the “ Assuming Lenders ”), the Affected Lender shall assign its Pro Rata Share of the Revolving Credit Commitments, together with the outstanding Revolving Loans, to the Assuming Lender or Assuming Lenders in accordance with Section 11.2. On the date of any such assignment, the Affected Lender which is being so replaced shall cease to be a “Lender” for all purposes of this Agreement and shall receive (x) from the Assuming Lender or Assuming Lenders the principal amount of its outstanding Loans and (y) from Borrowers all interest and fees accrued and then unpaid with respect to such Loans, together with any other amounts then payable to such Lender by Borrowers.
4.7 Survival . The agreements and obligations of the Borrowers in this Article 4 shall survive the payment of all other Obligations.
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records . Fleetwood shall, and shall cause each of its Subsidiaries to maintain, at all times, correct and complete books, records and accounts in which complete, correct and timely entries are made of its transactions in accordance with GAAP applied consistently with the audited Financial Statements required to be delivered pursuant to Section 5.2(a) . Fleetwood shall, and shall cause each of its Subsidiaries to, by means of appropriate entries, reflect in such accounts and in all Financial Statements proper liabilities and reserves for all taxes and proper provision for depreciation and amortization of property and bad debts, all in accordance with GAAP. Fleetwood shall, and shall cause each Loan Party to maintain at all times books and records pertaining to the Collateral in such detail, form and scope as the Agent or any Lender shall reasonably require, including, but not limited to, records of (a) all payments received and all credits and extensions granted with respect to the Accounts; (b) the return, rejection, repossession, stoppage in transit, loss, damage, or destruction of any Inventory; and (c) all other dealings affecting the Collateral in any material respect.
5.2 Financial Information . Fleetwood shall, and shall cause each of its Subsidiaries to promptly furnish to each Lender, all such financial information as the Agent shall reasonably request. Without limiting the foregoing, Fleetwood and the Borrowers will furnish to the Agent, in sufficient copies for distribution by the Agent to each Lender, in such detail as the Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety (90) days after the close of each Fiscal Year, consolidated audited and consolidating (by Business Unit) unaudited balance sheets, and income statements, cash flow statements and changes in stockholders’ equity for Fleetwood and its Subsidiaries for such Fiscal Year, and the accompanying notes thereto, setting forth in each case in comparative form figures for the previous Fiscal Year, all in reasonable detail, fairly presenting the financial position and the results of operations of Fleetwood and its consolidated Subsidiaries as at the date thereof and for the Fiscal Year then ended, and prepared in accordance with GAAP. Such statements
33
shall be examined in accordance with generally accepted auditing standards by and, in the case of such statements performed on a consolidated basis, accompanied by a report thereon unqualified in any respect of independent certified public accountants selected by Fleetwood and reasonably satisfactory to the Agent. Fleetwood and the Borrowers hereby authorize the Agent to communicate directly with their certified public accountants and, by this provision, authorize those accountants to disclose to the Agent any and all financial statements and other supporting financial documents and schedules relating to Fleetwood and its Subsidiaries and to discuss directly with the Agent, in the presence of Fleetwood, the finances and affairs of Fleetwood and its Subsidiaries; provided that Fleetwood shall not be required to provide consolidating cash flow statements and changes in stockholders’ equity.(b) As soon as available, but in any event not later than forty-five (45) days after the end of the first three Fiscal Quarters of any Fiscal Year, consolidated and consolidating (by Business Unit) unaudited balance sheets of Fleetwood and its consolidated Subsidiaries as at the end of such Fiscal Quarter, and consolidated and consolidating (by Business Unit) unaudited income statements and cash flow statements for Fleetwood and its consolidated Subsidiaries for such Fiscal Quarter and for the period from the beginning of the Fiscal Year to the end of such Fiscal Quarter, all in reasonable detail, fairly presenting the financial position and results of operations of Fleetwood and its consolidated Subsidiaries as at the date thereof and for such periods, and, in each case, in comparable form, figures for the corresponding period in the prior Fiscal Year and in the budget of Fleetwood and its Subsidiaries, and prepared in accordance with GAAP applied consistently with the audited Financial Statements required to be delivered pursuant to Section 5.2(a) . Fleetwood shall certify by a certificate signed by its chief financial officer that all such statements have been prepared in accordance with GAAP and present fairly the financial position of Fleetwood and its Subsidiaries as at the dates thereof and its results of operations for the periods then ended, subject to normal year-end adjustments and to the absence of footnotes required by GAAP; provided that Fleetwood shall not be required to provide consolidating cash flow statements and changes in stockholders’ equity.(c) As soon as available, but in any event no later than 30 days after the end of each fiscal month (other than any month which is also the end of a Fiscal Quarter), consolidated and consolidating (by Business Unit) unaudited balance sheets of Fleetwood and its consolidated Subsidiaries as at the end of such fiscal month, and consolidated and consolidating (by Business Unit) unaudited income statements and consolidated unaudited cash flow statements for Fleetwood and its consolidated Subsidiaries for such fiscal month and for the period from the beginning of the Fiscal Year to the end of such fiscal month, all in reasonable detail, fairly presenting the financial position and results of operations of Fleetwood and its consolidated Subsidiaries as at the date thereof and for such periods, and, in each case, in comparable form, figures for the corresponding period in the budget of Fleetwood and its Subsidiaries and for the corresponding
34
period in the prior Fiscal Year, and prepared in accordance with GAAP applied consistently with the audited Financial Statements required to be delivered pursuant to Section 5.2(a) . Fleetwood shall certify by a certificate signed by its chief financial officer or chief accounting officer that all such statements have been prepared in accordance with GAAP and present fairly the financial position of Fleetwood and its Subsidiaries as at the dates thereof and its results of operations for the periods then ended, subject to normal year-end adjustments and the absence of footnotes required by GAAP; provided that Fleetwood shall not be required to provide consolidating cash flow statements and changes in stockholders’ equity.(d) With each of the audited Financial Statements delivered pursuant to Section 5.2(a) , a certificate of the independent certified public accountants that examined such statement to the effect that they have reviewed and are familiar with this Agreement and that, in examining such Financial Statements, they did not become aware of any fact or condition which then constituted a Default or Event of Default with respect to a financial covenant, except for those, if any, described in reasonable detail in such certificate.(e) With each of the annual audited Financial Statements delivered pursuant to Section 5.2(a) , and within forty-five (45) days after the end of each Fiscal Quarter, a certificate of the chief financial officer, vice president-treasurer or vice president-controller of Fleetwood setting forth in reasonable detail the calculations required to establish that Fleetwood and its Subsidiaries were in compliance with the covenants set forth in Sections 7.22 and 7.24 during the period covered in such Financial Statements and as at the end thereof. Within thirty (30) days after the end of each fiscal month, a certificate of the chief financial officer, vice president-treasurer or vice president-controller of Fleetwood setting forth in reasonable detail the calculations required to establish whether a Minimum Liquidity Event shall have occurred as set forth in Section 7.24 . Within forty-five (45) days after the end of each Fiscal Quarter, a certificate of the chief financial officer, vice president-treasurer or vice president-controller of Fleetwood stating that, except as explained in reasonable detail in such certificate, (A) all of the representations and warranties of the Loan Parties contained in this Agreement and the other Loan Documents are correct and complete in all material respects as at the date of such certificate as if made at such time, except for those that speak as of a particular date, which shall have been true and correct as of such date, (B) the Loan Parties are, at the date of such certificate, in compliance in all material respects with all of their respective covenants and agreements in this Agreement and the other Loan Documents, (C) no Default or Event of Default then exists or existed during the period covered by the Financial Statements for such Fiscal Quarter, (D) describing and analyzing in reasonable detail all material trends, changes, and developments in each and all Financial Statements; and (E) explaining the variances of the figures in the corresponding Latest Projections and prior Fiscal Year financial statements. If any such certificate discloses that a representation or warranty is not correct or complete, or that a covenant has not been complied with, or that a Default or
35
Event of Default existed or exists, such certificate shall set forth what action Loan Parties have taken or propose to take with respect thereto.(f) No sooner than sixty (60) days prior to and not more than thirty (30) days after the beginning of each Fiscal Year, annual forecasts (to include forecasted consolidated and consolidating (by Business Unit) balance sheets and income statements and consolidated cash flow statements) for Fleetwood and its Subsidiaries as at the end of and for each quarter of such Fiscal Year.(g) Promptly after filing with the PBGC and the IRS, a copy of each annual report or other material filing filed with respect to each Plan of Fleetwood and its Subsidiaries.(h) Promptly upon the filing thereof, copies of all reports, if any, to or other documents filed by Fleetwood or any of its Subsidiaries with the Securities and Exchange Commission under the Exchange Act, and all reports, notices, or statements sent or received by Fleetwood or any of its Subsidiaries to or from the holders of any equity interests of Fleetwood or any of its Subsidiaries (other than routine non-material correspondence sent by shareholders of Fleetwood to Fleetwood) or any such Subsidiary or of any Debt of Fleetwood or any of its Subsidiaries registered under the Securities Act or to or from the trustee under any indenture under which the same is issued.(i) As soon as available, but in any event not later than 15 days after any Loan Party’s receipt thereof, a copy of all management reports and management letters prepared for any Loan Party by any independent certified public accountants.(j) Promptly after their preparation, copies of any and all proxy statements, financial statements, and reports which Fleetwood makes available to its shareholders.(k) If requested by the Agent, promptly after filing with the IRS, a copy of each tax return filed by Fleetwood or by any of its Subsidiaries.(l) No later than Wednesday of each week, a schedule of the Borrowers’ Accounts created, credits given, cash collected and other adjustments to Accounts since the last schedule, together with a Borrowing Base Certificate as of the end of the preceding week (a “ Weekly Borrowing Base Certificate ”) and all supporting information in accordance with Section 9 of the Security Agreement.(m) Not later than the 15th day after each Fiscal Quarter, a report, in form and substance satisfactory to the Agent, with respect to the Repurchase Obligations.(n) [RESERVED].
36
(o) Such additional information as any Agent and/or any Lender may from time to time reasonably request regarding the financial and business affairs of Fleetwood or any Subsidiary.5.3 Notices to the Lenders . Fleetwood or the Borrowers shall notify the Agent and the Lenders in writing of the following matters at the following times:
(a) Promptly, and, in any event, within two (2) Business Days, after becoming aware of any Default or Event of Default;(b) Promptly, and, in any event, within two (2) Business Days, after becoming aware of the assertion by the holder of any Capital Stock of Fleetwood or of any Subsidiary or the holder of any Debt of Fleetwood or any Subsidiary in a face amount in excess of $1,000,000 that a default exists with respect thereto or that Fleetwood or such Subsidiary is not in compliance with the terms thereof, or the threat or commencement by such holder of any enforcement action because of such asserted default or non-compliance; and promptly, but, in any event within two (2) Business Days, after becoming aware of the assertion that any Repurchase Obligations of $500,000 or more payable in cash shall have become due and payable;(c) Promptly, and, in any event, within two (2) Business Days, after becoming aware of any event or circumstance (other than general economic trends) which could reasonably be expected to have a Material Adverse Effect;(d) Promptly, and, in any event, within two (2) Business Days, after becoming aware of any pending or threatened action, suit, or proceeding, by any Person, or any pending or threatened investigation by a Governmental Authority, which if adversely determined would reasonably be expected to have a Material Adverse Effect;(e) Promptly, and, in any event, within two (2) Business Days, after becoming aware of any pending or threatened strike, work stoppage, unfair labor practice claim, or other labor dispute affecting Fleetwood or any of its Subsidiaries in a manner which could reasonably be expected to have a Material Adverse Effect;(f) Promptly, and, in any event, within two (2) Business Days, after becoming aware of any violation of any law, statute, regulation, or ordinance of a Governmental Authority affecting Fleetwood or any Subsidiary which could reasonably be expected to have a Material Adverse Effect;(g) Promptly, and, in any event, within two (2) Business Days, after receipt of any notice of any violation by Fleetwood or any of its Subsidiaries of any Environmental Law which could reasonably be expected to have a Material Adverse Effect or that any Governmental Authority has asserted in writing that Fleetwood or any Subsidiary is not in compliance in any material respect with any
37
Environmental Law or is investigating Fleetwood’s or such Subsidiary’s compliance therewith;(h) Promptly, and, in any event, within two (2) Business Days, after receipt of any written notice that Fleetwood or any of its Subsidiaries is or may be liable to any Person as a result of the Release or threatened Release of any Contaminant or that Fleetwood or any Subsidiary is subject to investigation by any Governmental Authority evaluating whether any remedial action is needed to respond to the Release or threatened Release of any Contaminant which, in either case, is reasonably likely to give rise to liability in excess of $1,000,000;(i) Promptly, and, in any event, within two (2) Business Days, after receipt of any written notice of the imposition of any Environmental Lien against any property of Fleetwood or any of its Subsidiaries;(j) Any change in any Loan Party’s name, state of organization, locations of Collateral, or form of organization, trade names under which it will sell Inventory or create Accounts, or to which instruments in payment of Accounts may be made payable, in each case at least thirty (30) days prior thereto;(k) Within ten (10) Business Days after Fleetwood or any ERISA Affiliate knows or has reason to know, that an ERISA Event or a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred, and, when known, any action taken or threatened by the IRS, the DOL or the PBGC with respect thereto;(l) Upon request, or, in the event that such filing reflects a significant change with respect to the matters covered thereby, within three (3) Business Days after the filing thereof with the PBGC, the DOL or the IRS, as applicable, copies of the following: (i) each annual report (form 5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the IRS with respect to each Plan, (ii) a copy of each funding waiver request filed with the PBGC, the DOL or the IRS with respect to any Plan and all communications received by Fleetwood or any ERISA Affiliate from the PBGC, the DOL or the IRS with respect to such request, and (iii) a copy of each other filing or notice filed with the PBGC, the DOL or the IRS, with respect to each Plan by either Fleetwood or any ERISA Affiliate;(m) Upon request, copies of each actuarial report for any Plan or Multi-employer Plan and annual report for any Multi-employer Plan; and within three (3) Business Days after receipt thereof by Fleetwood or any ERISA Affiliate, copies of the following: (i) any notices of the PBGC’s intention to terminate a Plan or to have a trustee appointed to administer such Plan; (ii) any favorable or unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code; or (iii) any notice from a Multi-employer Plan regarding the imposition of withdrawal liability;
38
(n) Within three (3) Business Days after the occurrence thereof: (i) any changes in the benefits of any existing Plan which increase the annual costs of Fleetwood and its Subsidiaries with respect thereto by an amount in excess of $1,000,000 or the establishment of any new Plan or the commencement of contributions to any Plan to which Fleetwood or any ERISA Affiliate was not previously contributing; or (ii) any failure by Fleetwood or any ERISA Affiliate to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment; or(o) Within three (3) Business Days after Fleetwood or any ERISA Affiliate knows or has reason to know that any of the following events has or will occur: (i) a Multi-employer Plan has been or will be terminated; (ii) the administrator or plan sponsor of a Multi-employer Plan intends to terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan.Each notice given under this Section shall describe the subject matter thereof in reasonable detail, and shall set forth the action that Fleetwood, its Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to take with respect thereto.
GENERAL WARRANTIES AND REPRESENTATIONS
Fleetwood and the Borrowers warrant and represent to the Agent and the Lenders that except as hereafter disclosed to and accepted by the Agent and the Majority Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents . Each Loan Party has the power and authority to execute, deliver and perform this Agreement and the other Loan Documents to which it is a party, to incur the Obligations, and to grant to the Agent Liens upon and security interests in the Collateral. Each Loan Party has taken all necessary action (including obtaining approval of its stockholders if necessary) to authorize its execution, delivery, and performance of this Agreement and the other Loan Documents to which it is a party. This Agreement and the other Loan Documents to which it is a party have been duly executed and delivered by each Loan Party which is a party thereto, and constitute the legal, valid and binding obligations of such Loan Party, enforceable against it in accordance with their respective terms, subject to the effect of bankruptcy, insolvency, moratorium and other laws affecting the rights of creditors generally and to the effect of general principles of equity. Each Loan Party’s execution, delivery, and performance of this Agreement and the other Loan Documents to which it is a party do not and will not conflict with, or constitute a violation or breach of, or result in the imposition of any Lien upon the property of Fleetwood or any of its Subsidiaries, by reason of the terms of (a) any material contract, mortgage, lease, agreement, indenture, or instrument to which Fleetwood or any of its Subsidiaries is a party or which is binding upon it, the breach of which could reasonably be expected to result in a Material Adverse Effect, (b) any Requirement of Law applicable to Fleetwood or any of its Subsidiaries, the violation of which could reasonably be expected to result in a Material Adverse Effect or (c) the certificate or articles of incorporation or by-laws or
39
the limited liability company or limited partnership agreement (or other organizational documents) of Fleetwood or any of its Subsidiaries.
6.2 Validity and Priority of Security Interest . The provisions of this Agreement, the Mortgages, and the other Loan Documents (upon recordation thereof) create legal and valid Liens on all the Collateral in favor of the Agent, for the ratable benefit of the Agent and the Revolving Credit Lenders or the Term Lenders, as the case may be, and, when properly filed and, where applicable recorded, such Liens constitute perfected and continuing Liens on all the Collateral, having priority over all other Liens on the Collateral (except for Permitted Liens) securing all the Obligations, and enforceable against the Loan Parties and all third parties. The Liens on the Collateral constitute first priority perfected Liens in favor of the Agent, for the ratable benefit of the Agent and the Lenders, except in each case for Permitted Liens; provided that, as between the Lenders, the Liens created on the Collateral other than the Term Loan Collateral constitute (x) first priority, perfected Liens in favor of the Agent, for the ratable benefit of the Agent and the Revolving Credit Lenders, and (y) second priority, perfected Liens in favor of the Agent, for the ratable benefit of the Agent and the Term Lenders, and the Liens created on the Term Loan Collateral constitute (x) first priority, perfected Liens in favor of the Agent, for the ratable benefit of the Agent and the Term Lenders, and (y) second priority, perfected Liens in favor of the Agent, for the ratable benefit of the Agent and the Revolving Credit Lenders.
6.3 Organization and Qualification . Each Loan Party (a) is duly organized or incorporated and validly existing in good standing under the laws of the state of its organization or incorporation, (b) is qualified to do business and is in good standing in the jurisdictions set forth on Schedule 6.3 to the Existing Credit Agreement, as amended prior to the Closing Date, which are the only jurisdictions in which qualification is material to the conduct of its business and (c) has all requisite power and authority to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions . Except as set forth on Schedule 6.4 to the Existing Credit Agreement, as amended prior to the Closing Date, no Loan Party has, during the five (5) years prior to the Closing Date, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or acquired all or substantially all of the assets of any Person, or acquired any of its property outside of the ordinary course of business.
6.5 Subsidiaries and Affiliates . Schedule 6.5 to the Existing Credit Agreement, as amended prior to the Closing Date, and as the same may be amended after the Closing Date with the consent of the Agent (such consent not to be unreasonably withheld), is a correct and complete list of the name and relationship to Fleetwood of each and all of its Subsidiaries and, to the knowledge of Fleetwood and the Borrowers, their other Affiliates. Each Subsidiary which is not a Loan Party is (a) duly incorporated or organized and validly existing in good standing under the laws of its state of incorporation or organization set forth on Schedule 6.5 to the Existing Credit Agreement, as amended prior to the Closing Date, and as same may be amended after the Closing Date with the consent of the Agent (such consent not to be unreasonably withheld), and (b) qualified to do business and in good standing in each jurisdiction in which the failure to so qualify or be in good standing would reasonably be expected to have a material adverse effect on any such Subsidiary’s business, operations,
40
property, or condition (financial or otherwise) and (c) has all requisite power and authority to conduct its business and own its property.
6.6 Financial Statements and Projections .(a) Fleetwood has delivered to the Agent and the Lenders the audited balance sheet and related statements of income, retained earnings, cash flows, and changes in stockholders equity for Fleetwood and its consolidated Subsidiaries as of April 25, 2004, and for the Fiscal Year then ended, accompanied by the report thereon of its independent certified public accountants, Ernst & Young. Fleetwood has also delivered to the Agent and the Lenders the unaudited balance sheet and related statements of income and cash flows for Fleetwood and its consolidated Subsidiaries as of the Fiscal Quarter ending January 23, 2005. Such financial statements are attached hereto as Exhibit C . All such financial statements have been prepared in accordance with GAAP and present accurately and fairly in all material respects the financial position of Fleetwood and its consolidated Subsidiaries as at the dates thereof and their results of operations for the periods then ended, subject in the case of the unaudited statements to normal year end audit adjustments and to the omission of footnotes required by GAAP.(b) The Latest Projections when submitted to the Lenders as required herein represent the good faith estimate by the Borrowers of the future financial performance of Fleetwood and its consolidated Subsidiaries for the periods set forth therein. The Latest Projections have been prepared on the basis of the assumptions set forth therein, which the Borrowers believe are fair and reasonable in light of current and reasonably foreseeable business conditions at the time submitted to the Lenders.6.7 Capitalization . Schedule 6.7 to the Existing Credit Agreement, as amended prior to the Closing Date, sets forth, as of the First Amendment and Restatement Date or of such amendment, the capitalization of Fleetwood and its Subsidiaries and all of the authorized and issued Capital Stock of each such Person. All outstanding Capital Stock has been validly issued, and is fully paid and non-assessable. All of the Capital Stock of Subsidiaries is owned, beneficially and of record, by the Person set forth on such Schedule 6.7 to the Existing Credit Agreement, as amended prior to the Closing Date.
6.8 Solvency . Each of Fleetwood, Holdings and Retail is, and upon the incurrence of any Obligations by such Loan Party will be, Solvent. Each of FMC, taken as a whole, and FRC, taken as a whole, is, and upon the incurrence of any Obligations by any Loan Party will be Solvent.
6.9 Debt . After giving effect to the Revolving Loans outstanding as of and the making of the Term Loan on the Closing Date, Fleetwood and its Subsidiaries have no Debt on the Closing Date, except (a) the Obligations, (b) the Subordinated Debt existing on the Closing Date in an amount (including principal and accrued but unpaid interest) of not more than $375,000,000, and the Trust Securities in relation thereto also outstanding on the Closing Date, (c) Debt described on Schedule 6.9 hereto, (d) Floor Plan Debt incurred in accordance with
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||