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EXHIBIT 10(a)
EXECUTION VERSION
AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
PNC BANK, NATIONAL ASSOCIATION (AGENT AND LENDER)
AND
LESCO, INC.
LESCO SERVICES, INC.
LESCO TECHNOLOGIES, LLC
AND
AIM LAWN & GARDEN PRODUCTS, INC.
(BORROWERS)
OCTOBER 7, 2005
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TABLE OF CONTENTS
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I.
DEFINITIONS...............................................................
1
1.1.
Accounting
Terms................................................ 1
1.2.
General
Terms...................................................
1
1.3.
Uniform
Commercial Code Terms...................................
17
1.4.
Certain Matters
of Construction................................. 17
II. ADVANCES,
PAYMENTS.......................................................
17
2.1.
(a) Revolving
Advances.......................................... 17
2.2.
Procedure for
Borrowing Advances................................ 18
2.3.
Disbursement of
Advance Proceeds................................ 20
2.4.
Intentionally
Omitted........................................... 21
2.5.
Maximum
Advances................................................
21
2.6.
Repayment of
Advances........................................... 21
2.7.
Repayment of
Excess Advances.................................... 21
2.8.
Statement of
Account............................................ 21
2.9.
Letters of
Credit............................................... 22
2.10.
Issuance of Letters of
Credit................................... 22
2.11.
Requirements For
Issuance of Letters of Credit.................. 23
2.12.
Disbursements,
Reimbursement.................................... 23
2.13.
Repayment of
Participation Advances............................. 24
2.14.
Documentation...................................................
25
2.15.
Determination to Honor
Drawing Request.......................... 25
2.16.
Nature of
Participation and Reimbursement Obligations........... 25
2.17.
Indemnity.......................................................
26
2.18.
Liability for Acts and
Omissions................................ 27
2.19.
Additional
Payments............................................. 28
2.20.
Manner of Borrowing
and Payment................................. 28
2.21.
Use of
Proceeds.................................................
30
2.22.
Defaulting
Lender............................................... 30
III. INTEREST AND
FEES.......................................................
31
3.1.
Interest........................................................
31
3.2.
Letter of Credit
Fees........................................... 31
3.3.
Facility
Fee....................................................
32
3.4.
Intentionally
Omitted........................................... 32
3.5.
Computation of
Interest and Fees................................ 32
3.6.
Maximum
Charges.................................................
33
3.7.
Increased
Costs................................................. 33
3.8.
Basis For
Determining Interest Rate Inadequate or Unfair........ 34
3.9.
Capital
Adequacy................................................
34
3.10.
Gross Up for
Taxes.............................................. 35
3.11.
Withholding Tax
Exemption....................................... 35
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IV. COLLATERAL: GENERAL
TERMS................................................ 36
4.1.
Security
Interest in the Collateral.............................
36
4.2.
Perfection of
Security Interest................................. 36
4.3.
Disposition of
Collateral....................................... 37
4.4.
Preservation of
Collateral...................................... 37
4.5.
Ownership of
Collateral......................................... 38
4.6.
Defense of
Agent's and Lenders' Interests....................... 38
4.7.
Books and
Records............................................... 38
4.8.
Financial
Disclosure............................................ 39
4.9.
Compliance with
Laws............................................ 39
4.10.
Inspection of
Premises.......................................... 39
4.11.
Insurance.......................................................
40
4.12.
Failure to Pay
Insurance........................................ 41
4.13.
Payment of
Taxes................................................ 41
4.14.
Payment of Leasehold
Obligations................................ 42
4.15.
Receivables.....................................................
42
4.16.
Inventory.......................................................
44
4.17.
Maintenance of
Equipment........................................ 44
4.18.
Exculpation of
Liability........................................ 45
4.19.
Environmental
Matters........................................... 45
4.20.
Financing
Statements............................................ 47
V. REPRESENTATIONS AND
WARRANTIES............................................ 47
5.1.
Authority.......................................................
47
5.2.
Formation and
Qualification..................................... 48
5.3.
Survival of
Representations and Warranties...................... 48
5.4. Tax
Returns.....................................................
48
5.5.
Financial
Statements............................................ 48
5.6.
Corporate
Name.................................................. 49
5.7.
O.S.H.A. and
Environmental Compliance........................... 50
5.8.
Solvency; No
Litigation, Violation, Indebtedness or Default..... 50
5.9.
Patents,
Trademarks, Copyrights and Licenses....................
51
5.10.
Licenses and
Permits............................................ 52
5.11.
Default of
Indebtedness......................................... 52
5.12.
No
Default......................................................
52
5.13.
No Burdensome
Restrictions...................................... 52
5.14.
No Labor
Disputes...............................................
52
5.15.
Margin
Regulations..............................................
53
5.16.
Investment Company
Act.......................................... 53
5.17.
Disclosure......................................................
53
5.18.
Intentionally
Omitted........................................... 53
5.19.
Swaps...........................................................
53
5.20.
Conflicting
Agreements.......................................... 53
5.21.
Application of Certain
Laws and Regulations..................... 53
5.22.
Business and Property
of Borrowers.............................. 54
5.23.
Section 20
Subsidiaries......................................... 54
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5.24.
Anti-Terrorism
Laws............................................. 54
VI. AFFIRMATIVE
COVENANTS....................................................
55
6.1.
Payment of
Fees................................................. 55
6.2.
Conduct of
Business and Maintenance of Existence and Assets..... 55
6.3.
Violations......................................................
55
6.4.
Government
Receivables.......................................... 55
6.5.
Intentionally
Omitted........................................... 56
6.6.
Fixed Charge
Coverage Ratio..................................... 56
6.7.
[Intentionally
Omitted]......................................... 56
6.8.
Landlord's
Waivers.............................................. 56
6.9.
Execution of
Supplemental Instruments........................... 56
6.10.
Payment of
Indebtedness, Including Taxes, Etc................... 56
6.11.
Standards of Financial
Statements............................... 57
6.12.
Inventory
Appraisals............................................ 57
6.13.
Field
Examinations..............................................
57
6.14.
Anti-Terrorism
Laws............................................. 57
VII. NEGATIVE
COVENANTS......................................................
57
7.1.
Merger,
Consolidation, Acquisition and Sale of Assets...........
58
7.2.
Creation of
Liens............................................... 58
7.3.
Guarantees......................................................
58
7.4.
Investments.....................................................
58
7.5.
Loans...........................................................
58
7.6.
Intentionally
Omitted........................................... 58
7.7.
Dividends.......................................................
58
7.8.
Indebtedness....................................................
59
7.9.
Nature of
Business.............................................. 59
7.10.
Transactions with
Affiliates.................................... 60
7.11.
Leases..........................................................
60
7.12.
Subsidiaries....................................................
60
7.13.
Fiscal Year and
Accounting Changes.............................. 60
7.14.
Pledge of
Credit................................................ 60
7.15.
Amendment of Articles
of Incorporation, By-Laws................. 60
7.16.
Compliance with
ERISA........................................... 60
7.17. Prepayment of
Indebtedness...................................... 61
7.18.
Other
Agreements................................................
61
VIII. CONDITIONS
PRECEDENT...................................................
61
8.1.
Conditions to
Initial Advances.................................. 61
8.2.
Conditions to
Each Advance...................................... 64
IX. INFORMATION AS TO
BORROWER...............................................
65
9.1.
Disclosure of
Material Matters.................................. 65
9.2.
Borrowing Base;
Schedules....................................... 65
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9.3.
Consummation of
Bank Products................................... 66
9.4.
Litigation......................................................
66
9.5.
Material
Occurrences............................................
66
9.6.
Government
Receivables.......................................... 66
9.7.
Annual Financial
Statements..................................... 66
9.8.
Quarterly
Financial Statements.................................. 67
9.9.
Intentionally
Omitted........................................... 67
9.10.
Other
Reports...................................................
67
9.11.
Additional
Information.......................................... 67
9.12.
Projected Operating
Budget...................................... 68
9.13.
Variances From
Operating Budget................................. 68
9.14.
Notice of Suits,
Adverse Events................................. 68
9.15.
ERISA Notices and
Requests...................................... 68
9.16.
Additional
Documents............................................ 69
X. EVENTS OF
DEFAULT.........................................................
69
XI. LENDERS' RIGHTS AND REMEDIES AFTER
DEFAULT............................... 72
11.1.
Rights and
Remedies............................................. 72
11.2.
Agent's
Discretion..............................................
73
11.3.
Setoff..........................................................
73
11.4.
Rights and Remedies
not Exclusive............................... 73
11.5.
Allocation of Payments
After Event of Default................... 73
XII. WAIVERS AND JUDICIAL
PROCEEDINGS........................................ 74
12.1.
Waiver of
Notice................................................ 74
12.2.
Delay...........................................................
74
12.3.
Jury
Waiver.....................................................
74
XIII. EFFECTIVE DATE AND
TERMINATION......................................... 75
13.1.
Term............................................................
75
13.2.
Termination.....................................................
75
XIV. REGARDING
AGENT.........................................................
76
14.1.
Appointment,
Intercreditor Agreement............................ 76
14.2.
Nature of
Duties................................................ 76
14.3.
Lack of Reliance on
Agent and Resignation....................... 77
14.4.
Certain Rights of
Agent......................................... 77
14.5.
Reliance........................................................
77
14.6.
Notice of
Default............................................... 78
14.7.
Indemnification.................................................
78
14.8.
Agent in its
Individual Capacity................................ 78
14.9.
Delivery of
Documents........................................... 78
14.10.
Borrowers' Undertaking to Agent.................................
79
14.11. No
Reliance on Agent's Customer Identification Program..........
79
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XV. BORROWING
AGENCY.........................................................
79
15.1.
Borrowing Agency
Provisions..................................... 79
15.2.
Waiver of
Subrogation........................................... 80
XVI.
MISCELLANEOUS...........................................................
80
16.1.
Governing
Law................................................... 80
16.2.
Entire
Understanding............................................
81
16.3.
Successors and
Assigns; Participations; New Lenders............. 83
16.4.
Application of
Payments, Overadvances for GE Capital Proceeds... 84
16.5.
Indemnity.......................................................
85
16.6.
Notice..........................................................
85
16.7.
Survival........................................................
87
16.8.
Severability....................................................
88
16.9.
Expenses........................................................
88
16.10.
Injunctive Relief...............................................
88
16.11.
Consequential Damages...........................................
88
16.12.
Captions........................................................
88
16.13.
Counterparts; Telecopied Signatures.............................
89
16.14.
Construction....................................................
89
16.15.
Confidentiality; Sharing Information............................
89
16.16.
Publicity.......................................................
90
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AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Amended and Restated Revolving Credit and Security Agreement
(this
"Agreement"), dated as of October 7, 2005, among LESCO, INC., a
corporation
organized under the laws of the State of Ohio ("LESCO"), LESCO
SERVICES, INC., a
corporation organized under the laws of the State of Ohio ("LSI"),
LESCO
TECHNOLOGIES, LLC, a limited liability company organized under the
laws of the
State of Nevada ("Technologies"), and AIM LAWN & GARDEN
PRODUCTS, INC., a
corporation organized under the laws of the State of Ohio ("AIM")
(each a
"Borrower" and collectively "Borrowers"), PNC BANK, NATIONAL
ASSOCIATION, and
the FINANCIAL INSTITUTIONS WHICH MAY HEREAFTER BECOME A PARTY
HERETO
(collectively, the "Lenders" and individually a "Lender"), and PNC
BANK,
NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such
capacity, the
"Agent").
IN
CONSIDERATION of the mutual covenants and undertakings herein
contained,
Borrowers, Lenders and Agent hereby agree as follows:
I.
DEFINITIONS.
1.1.
Accounting Terms.
As
used in this Agreement, the Note, or any certificate, report or
other
document made or delivered pursuant to this Agreement, accounting
terms not
defined in Section 1.2 or elsewhere in this Agreement and
accounting terms
partly defined in Section 1.2 to the extent not defined, shall have
the
respective meanings given to them under GAAP; provided, however,
whenever such
accounting terms are used for the purposes of determining
compliance with
financial covenants in this Agreement, such accounting terms shall
be defined in
accordance with GAAP as applied in preparation of the audited
financial
statements of Borrowers for the fiscal year ended December 31,
2004.
1.2.
General Terms.
For
purposes of this Agreement the following terms shall have the
following
meanings:
"Accountants" shall have the meaning set forth in Section 9.7
hereof.
"Accounts Sales Agreement" shall mean that certain Portfolio
Purchase
and Sale Agreement dated as of December 16, 2003 by and among
Borrowers and GE
Capital pursuant to which GE Capital is purchasing certain
Receivables of LESCO.
"ACH Transactions" shall mean any cash management or related
services
including the automated clearing house transfer of funds by the
Agent for the
account of any Borrower pursuant to agreement or overdrafts.
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"Advances" shall mean and include the Revolving Advances and
Letters
of Credit and GE Proceeds Advances.
"Affiliate" of any Person shall mean (a) any Person which, directly
or
indirectly, is in control of, is controlled by, or is under common
control with
such Person, or (b) any Person who is a director or officer (i) of
such Person,
(ii) of any Subsidiary of such Person or (iii) of any Person
described in clause
(a) above. For purposes of this definition, control of a Person
shall mean the
power, direct or indirect, (x) to vote 5% or more of the securities
having
ordinary voting power for the election of directors of such Person,
or (y) to
direct or cause the direction of the management and policies of
such Person
whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble to
this
Agreement and shall include its successors and assigns.
"Alternate Base Rate" shall mean, for any day, a rate per annum
equal
to the higher of (i) the Base Rate in effect on such day and (ii)
the Federal
Funds Open Rate in effect on such day plus 1/2 of 1%.
"Anti-Terrorism Laws" shall mean any Applicable Law relating to
terrorism or money laundering, including Executive Order No. 13224,
the USA
Patriot Act, the Laws comprising or implementing the Bank Secrecy
Act, and the
Laws administered by the United States Treasury Department's Office
of Foreign
Asset Control (as any of the foregoing Laws may from time to time
be amended,
renewed, extended, or replaced).
"Applicable Law" shall mean all laws, rules and regulations
applicable
to the person, conduct, transaction, covenant, Other Document or
contract in
question, including all applicable common law and equitable
principles; all
provisions of all applicable state, federal and foreign
constitutions, statutes,
rules, regulations and orders of any Governmental Body, and all
orders,
judgments and decrees of all courts and arbitrators.
"Assignment of Account" shall mean the existing pledge by LESCO of
the
BlackRock Account, together with all amendments, supplements,
modifications,
substitutions and replacements thereto and thereof.
"Authority" shall have the meaning set forth in Section
4.19(d).
"Bank Products" shall mean any one or more of the following types
of
services or facilities extended to any Borrower by the Agent or any
Lender, or
any Affiliate of the Agent or any Lender in reliance on the Agent's
or such
Lender's agreement, respectively, to indemnify such Affiliate: (a)
credit cards,
(b) ACH Transactions, (c) Interest Rate Protection Agreements, and
(d) foreign
exchange contracts.
"Bank Products Reserves" shall mean all reserves which the Agent
from
time to time establishes in its sole discretion for the Bank
Products then
provided or outstanding.
"Base Rate" shall mean the base commercial lending rate of PNC
as
publicly announced to be in effect from time to time, such rate to
be adjusted
automatically, without notice, on the effective date of any change
in such rate.
This rate of interest is determined from
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time to time by PNC as a means of pricing some loans to its
customers and is
neither tied to any external rate of interest or index nor does it
necessarily
reflect the lowest rate of interest actually charged by PNC to any
particular
class or category of customers of PNC.
"Blocked Accounts" shall have the meaning set forth in Section
4.15(h).
"Blocked Person" shall have the meaning assigned to such term
in
Section 5.24.
"Borrower" or "Borrowers" shall have the meaning set forth in
the
preamble to this Agreement and shall extend to all permitted
successors and
assigns of such Persons.
"Borrowing Base Certificate" shall mean a certificate duly executed
by
an officer of Borrowing Agent appropriately completed and in
substantially the
form of Exhibit A hereto.
"Borrowers on a consolidated basis" shall mean LESCO, LSI,
Technologies and AIM.
"Borrowers' Account" shall have the meaning set forth in Section
2.8.
"Borrowing Agent" shall mean LESCO.
"Business Day" shall mean any day other than Saturday or Sunday or
a
legal holiday on which commercial banks are authorized or required
by law to be
closed for business in East Brunswick, New Jersey and, if the
applicable
Business Day relates to any Eurodollar Rate Loans, such day must
also be a day
on which dealings are carried on in the London interbank
market.
"Cash on Deposit" shall mean the aggregate amount of permitted
investments under Section 7.4 and cash balances in LESCO's deposit
accounts to
the extent that such permitted investments and cash deposits (i)
are assigned to
the Agent to secure the Obligations pursuant to the Assignment of
Account or
other agreement acceptable to the Agent, and (ii) are subject to a
first
priority security interest in favor of the Agent.
"Cash on Deposit Advance Rate" shall have the meaning set forth
in
Section 2.1(a)(y)(ii) hereof.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601 et
seq.
"Change of Control" shall mean (a) the occurrence of any event
(whether in one or more transactions) which results in a transfer
of control of
any Borrower to a Person who is not an Original Owner or (b) any
merger or
consolidation of or with any Borrower or sale of all or
substantially all of the
property or assets of any Borrower. For purposes of this
definition, "control of
Borrower" shall mean the power, direct or indirect (x) to vote 50%
or more of
the securities having ordinary voting power for the election of
directors of any
Borrower or (y) to direct or cause the direction of the management
and policies
of any Borrower by contract or otherwise.
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"Change of Ownership" shall mean (a) 50% or more of the common
stock
or other ownership interests of any Borrower is no longer owned or
controlled by
(including for the purposes of the calculation of percentage
ownership, any
shares of common stock or other ownership interests into which any
capital stock
or other ownership interests of any Borrower held by any of the
Original Owners
is convertible or for which any such shares of the capital stock or
other
ownership interests of any Borrower or of any other Person may be
exchanged and
any shares of common stock or other ownership interests issuable to
such
Original Owners upon exercise of any warrants, options or similar
rights which
may at the time of calculation be held by such Original Owners) a
Person who is
an Original Owner or (b) any merger, consolidation or sale of
substantially all
of the property or assets of any Borrower.
"Charges" shall mean all taxes, charges, fees, imposts, levies
or
other assessments, including, without limitation, all net income,
gross income,
gross receipts, sales, use, ad valorem, value added, transfer,
franchise,
profits, inventory, capital stock, license, withholding, payroll,
employment,
social security, unemployment, excise, severance, stamp, occupation
and property
taxes, custom duties, fees, assessments, liens, claims and charges
of any kind
whatsoever, together with any interest and any penalties, additions
to tax or
additional amounts, imposed by any taxing or other authority,
domestic or
foreign (including, without limitation, the Pension Benefit
Guaranty Corporation
or any environmental agency or superfund), upon the Collateral, or
any of the
Borrowers.
"Closing Date" shall mean October 7, 2005, or such other date as
may
be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from
time to time and the regulations promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b)
all Equipment;
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property, including, without limitation,
Account
No. 25994 at BlackRock Provident Institutional Funds in the name of
"PNC Bank
National Association, Pledgee f/b/o Lesco Inc.", the "BlackRock
Account";
(f) all of each Borrower's right, title and interest in and to (i)
its
respective goods and other property including, but not limited to,
all
merchandise returned or rejected by Customers, relating to or
securing any of
the Receivables; (ii) all of each Borrower's rights as a consignor,
a consignee,
an unpaid vendor, mechanic, artisan, or other lienor, including
stoppage in
transit, setoff, detinue, replevin, reclamation and repurchase;
(iii) all
additional amounts due to any Borrower from any Customer relating
to the
Receivables; (iv) other property, including warranty claims,
relating to any
goods securing this Agreement; (v) all of each Borrower's
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contract rights, rights of payment which have been earned under a
contract
right, instruments (including promissory notes), documents, chattel
paper
(including electronic chattel paper), warehouse receipts, deposit
accounts,
letters of credit, and money; (vi) all commercial tort claims
(whether now
existing or hereafter arising); (vii) if and when obtained by any
Borrower, all
real and personal property of third parties in which such Borrower
has been
granted a lien or security interest as security for the payment or
enforcement
of Receivables; and (viii) any other goods, personal property or
real property
now owned or hereafter acquired in which any Borrower has expressly
granted a
security interest or may in the future grant a security interest to
Agent
hereunder, or in any amendment or supplement hereto or thereto, or
under any
other agreement between Agent and any Borrower;
(g) all of each Borrower's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers,
computers, computer
software (owned by any Borrower or in which it has an interest),
computer
programs, tapes, disks and documents relating to (a), (b), (c),
(d), (e) or (f)
of this Paragraph; and
(h) all proceeds and products of (a), (b), (c), (d), (e), (f) and
(g)
in whatever form, including, but not limited to: cash, deposit
accounts (whether
or not comprised solely of proceeds), certificates of deposit,
insurance
proceeds (including hazard, flood and credit insurance), negotiable
instruments
and other instruments for the payment of money, chattel paper,
security
agreements, documents, eminent domain proceeds, condemnation
proceeds and tort
claim proceeds.
"Commitment Percentage" of any Lender shall mean the percentage
set
forth below such Lender's name on the signature page hereof as same
may be
adjusted upon any assignment by a Lender pursuant to Section
16.3(b) hereof.
"Commitment Transfer Supplement" shall mean a document in the form
of
Exhibit 16.3 hereto, properly completed and otherwise in form and
substance
satisfactory to Agent by which the Purchasing Lender purchases and
assumes a
portion of the obligation of Lenders to make Advances under this
Agreement.
"Consents" shall mean all filings and all licenses, permits,
consents,
approvals, authorizations, qualifications and orders of
governmental authorities
and other third parties, domestic or foreign, necessary to carry on
any
Borrower's business, including, without limitation, any Consents
required under
all applicable federal, state or other applicable law.
"Controlled Group" shall mean all members of a controlled group
of
corporations and all trades or businesses (whether or not
incorporated) under
common control which, together with any Borrower, are treated as a
single
employer under Section 414 of the Code.
"Customer" shall mean and include the account debtor with respect
to
any Receivable and/or the prospective purchaser of goods, services
or both with
respect to any contract or contract right, and/or any party who
enters into or
proposes to enter into any contract or other arrangement with any
Borrower,
pursuant to which such Borrower is to deliver any personal property
or perform
any services.
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"Default" shall mean an event which, with the giving of notice
or
passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1
hereof.
"Defaulting Lender" shall have the meaning set forth in Section
2.22(a) hereof.
"Depository Accounts" shall have the meaning set forth in
Section
4.15(h) hereof.
"Disputanta Sales Agreement" shall mean that certain Asset
Purchase
Agreement, dated October 24, 2002, between the Disputanta Purchaser
as purchaser
and LESCO as seller.
"Disputanta Note" shall mean that certain promissory note,
dated
November 4, 2002, made by the Disputanta Purchaser in favor of
LESCO in the
stated principal amount of $1,850,000.
"Disputanta Purchaser" shall mean KPAC Holdings, Inc., a
Virginia
corporation.
"Documents" shall have the meaning set forth in Section 8.1(c)
hereof.
"Dollar" and the sign "$" shall mean lawful money of the United
States
of America.
"Domestic Rate Loan" shall mean any Advance that bears interest
based
upon the Alternate Base Rate.
"Earnings Before Interest and Taxes" shall mean for any period the
sum
of (i) net income (or loss) of Borrowers on a consolidated basis
for such
period, plus (ii) all interest expense of Borrowers on a
consolidated basis for
such period, plus (iii) all charges against income of Borrowers on
a
consolidated basis for such period for federal, state and local
taxes.
"EBITDA" shall mean for any period the sum of (i) Earnings
Before
Interest and Taxes for such period plus (ii) depreciation expenses
for such
period, plus (iii) amortization expenses for such period; provided
however, the
effect of the following items shall be excluded from the
calculation of EBITDA
to the extent that such items are included in EBITDA in the first
instance: (a)
acceleration of expenses in connection with the Borrowers'
restructuring
effected in January, 2002, (b) nonrecurring fees charged by the
Agent and the
Lenders under this Agreement, (c) charges taken in the fourth
fiscal quarter of
2004 in an amount not in excess of $5,200,000 related to
termination of LESCO's
purchase of Novex product pursuant to the Disputanta Sales
Agreement between
LESCO and the Disputanta Purchaser (including charges taken for the
termination
payment made by LESCO to the Disputanta Purchaser, reductions in
the value of
Novex Inventory, write-off of the Disputanta Note, and related
legal expenses),
and (d) charges in the amount of $35,000,000 taken in the fourth
fiscal quarter
of 2005 with respect to the sale of the assets to the TCS Sales
Agreement.
"Eligible Inventory" shall mean and include Inventory excluding
work
in process, with respect to each Borrower valued at the lower of
cost (average
cost method) or market value, which is not, in Agent's reasonable
opinion,
obsolete, slow moving or unmerchantable and
6
<PAGE>
which Agent, in its sole reasonable discretion, shall not deem
ineligible
Inventory, based on such considerations as Agent may from time to
time deem
appropriate including, without limitation, whether the Inventory is
subject to a
perfected, first priority security interest in favor of Agent and
whether the
Inventory conforms to all standards imposed by any governmental
agency, division
or department thereof which has regulatory authority over such
goods or the use
or sale thereof. Any Inventory located on a leased premises for
which the Agent
has not received a satisfactory landlord's or warehouseman's
agreement within
ninety (90) days after the Closing Date shall be excluded from
Eligible
Inventory unless such Inventory is subject to a reserve in an
amount established
by the Agent in it sole reasonable discretion (but in the case of
leased
premises, in no event more than three months of rental payments for
such
premises). Eligible Inventory shall exclude all Inventory
in-transit; provided
however, (i) Stores-on-Wheels Inventory which meets the other
criteria set forth
above and for which title has passed to a Borrower and which is
insured to the
full value thereof shall be included in Eligible Inventory, and
(ii) Inventory
in transit by common carrier from one of the Borrowers' locations
set forth on
Schedule 4.5 to another of the Borrower's locations set forth on
Schedule 4.5
and which is insured to the full value thereof shall be included in
Eligible
Inventory, subject to applicable reserves established by the Agent
with respect
to unpaid freight charges related to such in-transit Inventory.
"Environmental Complaint" shall have the meaning set forth in
Section
4.19(d) hereof.
"Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and
sanitation
laws, statutes, ordinances and codes relating to the protection of
the
environment and/or governing the use, storage, treatment,
generation,
transportation, processing, handling, production or disposal of
Hazardous
Substances and the rules, regulations, policies, published
guidelines, written
interpretations, decisions, orders and directives of federal, state
and local
governmental agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each Borrower all of
such
Borrower's goods (other than Inventory) whether now owned or
hereafter acquired
and wherever located including, without limitation, all equipment,
machinery,
apparatus, motor vehicles, fittings, furniture, furnishings,
fixtures, parts,
accessories and all replacements and substitutions therefor or
accessions
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of
1974, as amended from time to time and the rules and regulations
promulgated
thereunder.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the
then
current Interest Period relating thereto the interest rate per
annum determined
by PNC by dividing (the resulting quotient rounded upwards, if
necessary, to the
nearest 1/100th of 1% per annum) (a) the rate of interest
determined by PNC in
accordance with its usual procedures (which determination shall be
conclusive
absent manifest error) to be the average of the London interbank
offered rates
for U.S. Dollars quoted by the British Bankers' Association as set
forth on
Moneyline Telerate (or appropriate successor or, if British
Banker's Association
or its successor ceases to provide such quotes, a comparable
replacement
determined by Agent) display page 3750 (or such other
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<PAGE>
display page on Moneyline Telerate Service as may replace display
page 3750) two
(2) Business Days prior to the first day of such Interest Period
for an amount
comparable to such Eurodollar Rate Loan and having a borrowing date
and a
maturity comparable to such Interest Period by (b) a number equal
to 1.00 minus
the Reserve Percentage. The Eurodollar Rate may also be expressed
by the
following formula:
Average of London interbank offered
rates quoted by BBA as shown on
Eurodollar Rate = Moneyline Telerate display page 3750
or appropriate successor
------------------------------------
1.00 - Reserve Percentage
"Eurodollar Rate Loan" shall mean an Advance at any time that
bears
interest based on the Eurodollar Rate.
"Event of Default" shall mean the occurrence of any of the events
set
forth in Article X hereof.
"Executive Order No. 13224" shall mean the Executive Order No.
13224
on Terrorist Financing, effective September 24, 2001, as the same
has been, or
shall hereafter be, renewed, extended, amended or replaced.
"Existing Loan Agreement" shall mean that certain Revolving Credit
and
Security Agreement dated as of December 30, 2003, as amended, among
the
Borrowers, PNC Bank, National Association, as administrative agent,
and the
other lenders for which PNC Bank serves as administrative
agent.
"Federal Funds Effective Rate" for any day shall mean the rate
per
annum (based on a year of 360 days and actual days elapsed and
rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of
New York (or
any successor) on such day as being the weighted average of the
rates on
overnight federal funds transactions arranged by federal funds
brokers on the
previous trading day, as computed and announced by such Federal
Reserve Bank (or
any successor) in substantially the same manner as such Federal
Reserve Bank
computes and announces the weighted average it refers to as the
"Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such
Federal
Reserve Bank (or its successor) does not announce such rate on any
day, the
"Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective
Rate for the last day on which such rate was announced.
"Federal Funds Open Rate" shall mean the rate per annum determined
by
the Agent in accordance with its usual procedures (which
determination shall be
conclusive absent manifest error) to be the open rate for federal
funds
transactions as of the opening of business for federal funds
transactions among
members of the Federal Reserve System arranged by federal funds
brokers on such
day, as quoted by Garvin Guybutler, any successor entity thereto,
or any other
broker selected by the Bank, as set forth on the applicable
Telerate display
page; provided, however; that if such day is not a Business Day,
the Federal
Funds Open Rate for such day shall be the Open Rate on the
immediately preceding
Business Day, or if no such rate shall be quoted by a Federal funds
broker at
such time, such other rate as determined by the Agent in accordance
with its
usual procedures.
8
<PAGE>
"Fee Letter" shall mean the fee letter, dated October 7, 2005,
among
Borrowers and PNC.
"Fixed Charge Coverage Ratio" shall mean and include, with respect
to
any fiscal period, the ratio of (a) EBITDA minus Non-Financed
Capital
Expenditures, minus income taxes expensed on a consolidated basis
(but excluding
any non-recurring tax adjustments related to any of the exclusions
set forth in
items (a) or (b) in the definition of "EBITDA" herein), all the
foregoing during
such period to (b) Fixed Charges during such period.
"Fixed Charges" shall mean the sum of consolidated interest expense
of
the Borrowers on a consolidated basis, Senior Debt Payments,
principal on other
Indebtedness for borrowed money, and payments under capitalized
leases, the
foregoing all as determined in conformity with GAAP.
"Formula Amount" shall have the meaning set forth in Section
2.1(a).
"GAAP" shall mean generally accepted accounting principles in
the
United States of America in effect from time to time.
"GE Capital" shall mean GE Capital Financial Inc., a Utah
industrial
loan corporation.
"GE Capital Proceeds" shall mean proceeds of any of the
Borrowers'
accounts receivable purchased by GE Capital pursuant to the Account
Sales
Agreement or payments due under the GE Program Agreement from
customers of any
of the Borrowers.
"GE
Proceeds Advance" shall have the meaning set forth in Section
16.4(b).
"General Intangibles" shall mean and include as to each Borrower
all
of such Borrower's general intangibles, whether now owned or
hereafter acquired
including, without limitation, all payment intangibles, choses in
action, causes
of action, corporate or other business records, inventions,
designs, patents,
patent applications, equipment formulations, manufacturing
procedures, quality
control procedures, trademarks, service marks, trade secrets,
goodwill,
copyrights, design rights, software, computer information, source
codes, codes,
records and dates, registrations, licenses, franchises, customer
lists, tax
refunds, tax refund claims, computer programs, all claims under
guaranties,
security interests or other security held by or granted to such
Borrower to
secure payment of any of the Receivables by a Customer (other than
to the extent
covered by Receivables) all rights of indemnification and all other
intangible
property of every kind and nature (other than Receivables).
"GE Program Agreement" shall mean that certain Private Label
Business
Credit Program Agreement, dated as of December 16, 2003, by and
among Borrowers
and GE Capital.
"Governmental Body" shall mean any nation or government, any state
or
other political subdivision thereof or any entity exercising the
legislative,
judicial, regulatory or administrative functions of or pertaining
to a
government.
"Hazardous Discharge" shall have the meaning set forth in
Section
4.19(d) hereof.
9
<PAGE>
"Hazardous Substance" shall mean, without limitation, any
flammable
explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum
products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic
Substances or
related materials as defined in CERCLA, the Hazardous Materials
Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, or any
other
applicable Environmental Law and in the regulations adopted
pursuant thereto.
"Hazardous Wastes" shall mean all wastes subject to regulation
under
CERCLA, RCRA or applicable state law, and any other applicable
Federal and state
laws now in force or hereafter enacted relating to hazardous waste
disposal.
"Indebtedness" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be
classified
upon a balance sheet as liabilities (except capital stock and
surplus earned or
otherwise) and in any event, without limitation by reason of
enumeration, shall
include all indebtedness, debt and other similar monetary
obligations of such
Person whether direct or guaranteed, and all premiums, if any, due
at the
required prepayment dates of such indebtedness, and all
indebtedness secured by
a Lien on assets owned by such Person, whether or not such
indebtedness actually
shall have been created, assumed or incurred by such Person. Any
indebtedness of
such Person resulting from the acquisition by such Person of any
assets subject
to any Lien shall be deemed, for the purposes hereof, to be the
equivalent of
the creation, assumption and incurring of the indebtedness secured
thereby,
whether or not actually so created, assumed or incurred.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve
System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24,
Seventh), as
amended.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated as of December 30, 2003, between GE Capital and the
Agent,
together with that certain Consent and Agreement executed by each
Borrower for
the benefit of the Agent and GE Capital, as the foregoing may be
amended,
modified, extended or restated from time to time.
"Interest Period" shall mean the period provided for any
Eurodollar
Rate Loan pursuant to Section 2.2(b).
"Interest Rate Protection Agreements" shall mean documentation
for
interest rate swaps in a standard International Swap Dealer
Association
Agreement or such other form as is acceptable to the Agent which
provide for the
method of calculating the reimbursable amount of the provider's
credit exposure
in a reasonable and customary basis.
"Inventory" shall mean and include as to each Borrower all of
such
Borrower's now owned or hereafter acquired goods, merchandise and
other personal
property, wherever located, to be furnished under any consignment
arrangement,
contract of service or held for sale or lease, all raw materials,
work in
process, finished goods and materials and supplies of any kind,
nature or
description which are or might be used or consumed in such
Borrower's business
or used in selling or furnishing such goods, merchandise and other
personal
property, and all documents of title or other documents
representing them.
10
<PAGE>
"Inventory Advance Rate" shall have the meaning set forth in
Section
2.1(a)(y)(i) hereof.
"Investment Property" shall mean and include as to each Borrower,
all
of such Borrower's now owned or hereafter acquired securities
(whether
certificated or uncertificated), securities entitlements,
securities accounts,
commodities contracts and commodities accounts.
"Issuer" shall mean any Person who issues a Letter of Credit
and/or
accepts a draft pursuant to the terms hereof.
"Leasehold Interests" shall mean all of each Borrower's right,
title
and interest in and to the leasehold interests identified on
Schedule 4.19
hereto.
"Lender" and "Lenders" shall have the meaning ascribed to such term
in
the preamble to this Agreement and shall include each Person which
becomes a
transferee, successor or assign of any Lender.
"Letter of Credit Fees" shall have the meaning set forth in
Section
3.2.
"Letters of Credit" shall have the meaning set forth in Section
2.9.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation,
assignment, security interest, lien (whether statutory or
otherwise), Charge,
claim or encumbrance, or preference, priority or other security
agreement or
preferential arrangement held or asserted in respect of any asset
of any kind or
nature whatsoever including, without limitation, any conditional
sale or other
title retention agreement, any lease having substantially the same
economic
effect as any of the foregoing, and the filing of, or agreement to
give, any
financing statement under the Uniform Commercial Code or comparable
law of any
jurisdiction.
"Material Adverse Effect" shall mean a material adverse effect on
(a)
the condition, operations, assets, business or prospects of the
Borrowers, taken
as a whole, (b) the Borrowers' ability to pay the Obligations in
accordance with
the terms thereof, (c) the value of the Collateral, or Agent's
Liens on the
Collateral or the priority of any such Lien or (d) the practical
realization of
the benefits of Agent's and each Lender's rights and remedies under
this
Agreement and the Other Documents.
"Maximum Face Amount" shall mean, with respect to any
outstanding
Letter of Credit, the face amount of such Letter of Credit
including all
automatic increases provided for in such Letter of Credit, whether
or not any
such automatic increase has become effective.
"Maximum Revolving Advance Amount" shall mean $50,000,000.
"Monthly Advances" shall have the meaning set forth in Section
3.1
hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in
Sections 3(37) and 4001(a)(3) of ERISA.
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<PAGE>
"Net Orderly Liquidation Value" shall mean with regard to any
Inventory, the net proceeds that could be expected from an orderly
liquidation
sale of such Inventory based upon an appraisal of the Borrowers'
Inventory
conducted by an appraisal firm selected by the Agent, which
appraisal of the net
proceeds would be calculated after all expenses, professionally
managed, with
the seller obligated to sell over a defined period assuming that
(a) the
Borrowers' facilities are in limited operation, utilizing select
current
employees of the Borrowers, for the purpose of liquidating the
Inventory, (b)
the Inventory would be disposed of on a piecemeal basis or through
appropriate
groupings, under a scenario whereby the purchasers are buying "as
is, where is"
for cash or cash equivalent, (c) the terms are sold on a Free On
Board ("FOB")
warehouse basis, and (d) taking into consideration current economic
trends,
condition, location and marketability.
"Non-Financed Capital Expenditures" shall mean capital expenditures
of
the Borrowers which are not financed by any third party lender but
shall include
capital expenditures which are financed with Revolving
Advances.
"Note" shall mean the Revolving Credit Note.
"Obligations" shall mean and include any and all loans,
advances,
debts, liabilities, obligations, covenants and duties owing by
Borrowers to
Lenders or Agent or any Affiliate of Agent or any Lender of any
kind or nature,
present or future (including, without limitation, any interest
accruing thereon
after maturity, or after the filing of any petition in bankruptcy,
or the
commencement of any insolvency, reorganization or like proceeding
relating to
any Borrower, whether or not a claim for post-filing or
post-petition interest
is allowed in such proceeding), whether or not evidenced by any
note, guaranty
or other instrument, whether arising under any agreement,
instrument or
document, (including, without limitation, this Agreement and the
Other
Documents) whether or not for the payment of money, whether arising
by reason of
an extension of credit, opening of a letter of credit, loan,
equipment lease or
guarantee, under any interest or currency swap, future, option or
other similar
agreement (including the Interest Rate Protection Agreement)
entered into with
the Agent or any Lender or any of their respective Affiliates, or
in any other
manner, whether arising out of overdrafts or deposit or other
accounts or
electronic funds transfers (whether through automated clearing
houses or
otherwise) or out of the Agent's or any Lender's or any of their
respective
Affiliate's non-receipt of or inability to collect funds or
otherwise not being
made whole in connection with depository transfer check or other
similar
arrangements, whether direct or indirect (including those acquired
by assignment
or participation), absolute or contingent, joint or several, due or
to become
due, now existing or hereafter arising, contractual or tortious,
liquidated or
unliquidated, regardless of how such indebtedness or liabilities
arise or by
what agreement or instrument they may be evidenced or whether
evidenced by any
agreement or instrument, including, but not limited to, any and all
of any
Borrower's Indebtedness and/or liabilities under this Agreement,
the Other
Documents or under any other agreement between Agent or Lenders or
any of their
respective Affiliates and any Borrower and any amendments,
extensions, renewals
or increases and all costs and expenses of Agent and any Lender or
any of their
respective Affiliates incurred in the documentation, negotiation,
modification,
enforcement, collection or otherwise in connection with any of the
foregoing,
including but not limited to reasonable attorneys' fees and
expenses and all
obligations of any Borrower to Agent or Lenders to perform acts or
refrain from
taking any action.
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<PAGE>
"Original Owners" shall mean the shareholders of LESCO as of
the
Closing Date.
"Other Documents" shall mean the Note, the Assignment of Account,
the
Patent, Trademark and Copyright Security Agreement and any and all
other
agreements, instruments and documents, including, without
limitation,
guaranties, pledges, powers of attorney, consents, and all other
writings
heretofore, now or hereafter executed by any Borrower and/or
delivered to Agent
or any Lender in respect of the transactions contemplated by
this
"Parent" of any Person shall mean a corporation or other entity
owning, directly or indirectly at least 50% of the shares of stock
or other
ownership interests having ordinary voting power to elect a
majority of the
directors of the Person, or other Persons performing similar
functions for any
such Person.
"Participant" shall mean each Person who shall be granted the right
by
any Lender to participate in any of the Advances and who shall have
entered into
a participation agreement in form and substance satisfactory to
such Lender.
"Patent, Trademark and Copyright Security Agreement" shall mean
the
Patent, Trademark and Copyright Security Agreement executed and
delivered by
each of the Borrowers to the Agent for the benefit of the
Lenders.
"Payment Office" shall mean initially Two Tower Center
Boulevard,
Eighth Floor, East Brunswick, New Jersey 08816; thereafter, such
other office of
Agent, if any, which it may designate by notice to Borrowing Agent
and to each
Lender to be the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent
for
the benefit of Agent and Lenders; (b) Liens for taxes, assessments
or other
governmental charges not delinquent or being contested in good
faith and by
appropriate proceedings and with respect to which proper reserves
have been
taken by Borrowers; provided, that, the Lien shall have no effect
on the
priority of the Liens in favor of Agent or the value of the assets
in which
Agent has such a Lien and a stay of enforcement of any such Lien
shall be in
effect; (c) matters of record disclosed on the title insurance
commitments
obtained pursuant to Section 8.1(r), (d) Liens disclosed in the
financial
statements or notes thereto referred to in Section 5.5, the
existence of which
Agent has consented to in writing; (e) deposits or pledges to
secure obligations
under worker's compensation, social security or similar laws, or
under
unemployment insurance; (f) deposits or pledges to secure bids,
tenders,
contracts (other than contracts for the payment of money), leases,
statutory
obligations, surety and appeal bonds and other obligations of like
nature
arising in the ordinary course of any Borrower's business and an
escrow in an
amount not in excess of $3,650,000 to support LESCO's obligations
under the
Strongsville Assignment Agreement which will be used to reimburse
The Glidden
Company for certain obligations of LESCO; (g) judgment Liens that
have been
stayed or bonded and mechanics', workers', materialmen's or other
like Liens
arising in the ordinary course of any Borrower's business with
respect to
obligations which are not due or which are being contested in good
faith by the
applicable Borrower; (h) Liens placed upon fixed assets hereafter
acquired to
secure a portion of the purchase price thereof, provided that (x)
any such lien
shall not encumber any other property
13
<PAGE>
of the Borrowers and (y) the aggregate amount of Indebtedness
secured by such
Liens incurred as a result of such purchases during any fiscal year
shall not
exceed the amount provided for in Section 7.6; (i) Liens which
individually or
in the aggregate do not encumber Collateral having a value in
excess of
$500,000; (j) Liens on assets of LESCO in favor of TCS granted
under the TCS
Supply Agreement to secure the obligations of LESCO under the TCS
Supply
Agreement, provided such Liens are subject to the terms of the
Subordination
Agreement, and (l) Liens disclosed on Schedule 1.2(p).
"Person" shall mean any individual, sole proprietorship,
partnership,
corporation, business trust, joint stock company, trust,
unincorporated
organization, association, limited liability company, institution,
public
benefit corporation, joint venture, entity or government (whether
Federal,
state, county, city, municipal or otherwise, including any
instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning
of
Section 3(3) of ERISA, maintained for employees of Borrowers or any
member of
the Controlled Group or any such Plan to which any Borrower or any
member of the
Controlled Group is required to contribute on behalf of any of its
employees.
"Pro Forma Balance Sheet" shall have the meaning set forth in
Section
5.5(a) hereof.
"Pro Forma Financial Statements" shall have the meaning set forth
in
Section 5.5(b) hereof.
"Projections" shall have the meaning set forth in Section
5.5(b)
hereof.
"Purchasing Lender" shall have the meaning set forth in Section
16.3
hereof.
"RCRA" shall mean the Resource Conservation and Recovery Act,
42
U.S.C. Sections 6901 et seq., as amended.
"Real Property" shall mean all of each Borrower's right, title
and
interest in and to owned premises and premises leased pursuant to a
ground
lease, all the foregoing as identified on Schedule 4.19 hereto.
"Receivables" shall mean and include, as to each Borrower, all of
such
Borrower's accounts, contract rights, instruments (including those
evidencing
indebtedness owed to Borrowers by their Affiliates), documents,
chattel paper
(including electronic chattel paper), general intangibles relating
to accounts,
drafts and acceptances, credit card receivables, and all other
forms of
obligations owing to such Borrower arising out of or in connection
with the sale
or lease of Inventory or the rendition of services, all supporting
obligations,
guarantees and other security therefor, whether secured or
unsecured, now
existing or hereafter created, and whether or not specifically sold
or assigned
to Agent hereunder.
"Release" shall have the meaning set forth in Section 5.7(c)(i)
hereof.
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<PAGE>
"Reportable Event" shall mean a reportable event described in
Section
4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least
fifty-one
percent (51%) of the Advances and, if no Advances are outstanding,
shall mean
Lenders holding at least fifty-one percent (51%) of the Commitment
Percentages;
provided however, if there are two or less Lenders at any given
time, then
"Required Lenders" shall mean all the Lenders.
"Reserve Percentage" shall mean the maximum effective percentage
in
effect on any day as prescribed by the Board of Governors of the
Federal Reserve
System (or any successor) for determining the reserve requirements
(including,
without limitation, supplemental, marginal and emergency reserve
requirements)
with respect to eurocurrency funding.
"Revolving Advances" shall mean Advances made other than Letters
of
Credit.
"Revolving Credit Note" shall mean, collectively, the promissory
notes
referred to in Section 2.1(a) hereof.
"Revolving Interest Rate" shall mean an interest rate per annum
equal
to (a) the sum of the Alternate Base Rate minus one half of one
percent (0.50%)
with respect to Domestic Rate Loans, and (b) the sum of the
Eurodollar Rate plus
one and one-fourth percent (1.25%) with respect to Eurodollar Rate
Loans.
"Section 20 Subsidiary" shall mean the Subsidiary of the bank
holding
company controlling PNC, which Subsidiary has been granted
authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Senior Debt Payments" shall mean and include all cash actually
expended by Borrowers to make (a) interest payments on any Advances
hereunder,
plus, (b) payments for all fees, commissions and charges set forth
herein and
with respect to any Advances, plus (c) capitalized lease payments,
plus (d)
payments with respect to any other Indebtedness for borrowed money,
plus (e) to
the extent not included in EBITDA, recurring fees paid to GE
Capital with
respect to the Accounts Sales Agreement and/or the GE Program
Agreement;
provided, Senior Debt Payments shall not include nonrecurring fees
charged by
the Agent and the Lenders under this Agreement or by GE Capital
under the
Accounts Sales Agreement and/or the GE Program Agreement which are
payable on or
before the Closing Date.
"Settlement Date" shall mean the Closing Date and thereafter
Wednesday
of each week unless such day is not a Business Day in which case it
shall be the
next succeeding Business Day.
"Stores-on-Wheels Inventory" shall mean Inventory which is located
on
motor vehicles owned or leased by a Borrower and from which such
Borrower sells
such Inventory to its Customers in the ordinary course of
business.
"Strongsville Assignment Agreement" shall mean that certain
Assignment
and Assumption of Lease Agreement among LSI, as assignor, The
Glidden Company,
as assignee,
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and LESCO pursuant to which LSI shall transfer its rights under the
Strongsville
Lease to The Glidden Company.
"Strongsville Lease Agreement" shall mean that certain Lease
Agreement
dated June 13, 2000 between Lescar Company, as landlord, and LESCO,
as tenant,
with respect to LESCO's lease of the real property and improvements
located at
15885 Sprague Road, Strongsville, Cuyahoga County, Ohio.
"Subordination Agreement" shall mean that certain Subordination
Agreement between TCS and the Agent with respect to the
subordination of the
liens of TCS in the assets of LESCO to the Liens of the Agent in
the assets of
LESCO, in substantially the form of Exhibit 8.1(r).
"Subsidiary" shall mean a corporation or other entity of whose
shares
of stock or other ownership interests having ordinary voting power
(other than
stock or other ownership interests having such power only by reason
of the
happening of a contingency) to elect a majority of the directors of
such
corporation, or other Persons performing similar functions for such
entity, are
owned, directly or indirectly, by such Person.
"TCS" shall mean Turf Care Supply Corp., a Delaware
corporation.
"TCS Sales Agreement" shall mean that certain Asset Purchase
Agreement
dated as of July 26, 2005, as amended, between LESCO, as seller,
and TCS, as
buyer.
"TCS Supply
Agreement" shall mean that certain Long-Term Supply
Agreement effective as of October 1, 2005, between TCS, as
supplier, and LESCO.
"Term" shall have the meaning set forth in Section 13.1 hereof.
"Termination Event" shall mean (i) a Reportable Event with respect
to
any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower
or any
member of the Controlled Group from a Plan or Multiemployer Plan
during a plan
year in which such entity was a "substantial employer" as defined
in Section
4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan
in a distress termination described in Section 4041(c) of ERISA;
(iv) the
institution by the PBGC of proceedings to terminate a Plan or
Multiemployer
Plan; (v) any event or condition (a) which might constitute grounds
under
Section 4042 of ERISA for the termination of, or the appointment of
a trustee to
administer, any Plan or Multiemployer Plan, or (b) that may result
in
termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi)
the partial or complete withdrawal within the meaning of Sections
4203 and 4205
of ERISA, of any Borrower or any member of the Controlled Group
from a
Multiemployer Plan.
"Toxic Substance" shall mean and include any material present on
the
Real Property or the Leasehold Interests which has been shown to
have
significant adverse effect on human health or which is subject to
regulation
under the Toxic Substances Control Act (TSCA), 15 U.S.C. Sections
2601 et seq.,
applicable state law, or any other applicable Federal or state laws
now in force
or hereafter enacted relating to toxic substances. "Toxic
Substance" includes
but is not limited to asbestos, polychlorinated biphenyls (PCBs)
and lead-based
paints.
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"Transactions" shall have the meaning set forth in Section 5.5
hereof.
"Transferee" shall have the meaning set forth in Section
16.3(b)
hereof.
"Undrawn Availability" at a particular date shall mean an amount
equal
to (a) the lesser of (i) the Formula Amount plus outstanding
Letters of Credit
or (ii) the Maximum Revolving Advance Amount, minus (b) the sum of
(i) the
outstanding amount of Advances plus (ii) all amounts due and owing
to Borrowers'
trade creditors which are outstanding beyond sixty (60) days from
the due date,
plus (iii) fees and expenses for which Borrowers are liable but
which have not
been paid or charged to Borrowers' Account.
"USA Patriot Act" shall mean the Uniting and Strengthening America
by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of
2001, Public Law 107-56, as the same has been, or shall hereafter
be, renewed,
extended, amended or replaced.
"Week" shall mean the time period commencing with the opening
of
business on a Wednesday and ending on the end of business the
following Tuesday.
1.3.
Uniform Commercial Code Terms.
All
terms used herein and defined in the Uniform Commercial Code as
adopted
in the State of Ohio from time to time shall have the meaning given
therein
unless otherwise defined herein. To the extent the definition of
any category or
type of Collateral is expanded by any amendment, modification or
revision to the
Uniform Commercial Code, such expanded definition will apply
automatically as of
the date of such amendment, modification or revision.
1.4.
Certain Matters of Construction.
The
terms "herein", "hereof" and "hereunder" and other words of
similar
import refer to this Agreement as a whole and not to any particular
section,
paragraph or subdivision. Any pronoun used shall be deemed to cover
all genders.
Wherever appropriate in the context, terms used herein in the
singular also
include the plural and vice versa. All references to statutes and
related
regulations shall include any amendments of same and any successor
statutes and
regulations. Unless otherwise provided, all references to any
instruments or
agreements to which Agent is a party, including, without
limitation, references
to any of the Other Documents, shall include any and all
modifications or
amendments thereto and any and all extensions or renewals
thereof.
II. ADVANCES, PAYMENTS.
2.1.
(a) Revolving Advances.
Subject to the terms and conditions set forth in this Agreement,
each
Lender, severally and not jointly, will make Revolving Advances to
Borrowers in
aggregate amounts outstanding at any time equal to such Lender's
Commitment
Percentage of the lesser of (x) the Maximum
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Revolving Advance Amount less the aggregate amount of outstanding
Letters of
Credit and GE Proceeds Advances or (y) an amount equal to the sum
of:
(i) up to the lesser of (A) 70%, subject to the provisions of
Section 2.1(c) hereof ("Inventory Advance Rate"), of the value
of
Eligible Inventory, or (B) 85% of the Net Orderly Liquidation Value
of
the Inventory at any one time; plus
(ii) one hundred percent (100%), subject to the provisions of
Section 2.1(c) hereof ("Cash on Deposit Advance Rate"), of Cash
on
Deposit in excess of $5,000,000 (the Inventory Advance Rate and
the
Cash on Deposit Advance Rate shall be referred to collectively, as
the
"Advance Rates"), minus
(iii) the amount by which the availability for Revolving
Advances
based upon Stores-on-Wheels Inventory under item (i) above
exceeds
$10,000,000; minus
(iv) the
aggregate amount of outstanding Letters of Credit and GE
Proceeds Advances, minus
(v) the Bank Products Reserves and such other reserves as Agent
may reasonably deem proper and necessary from time to time.
The amount derived
from (a) the sum of Section 2.1(a)(y)(i) and (ii) minus
the sum of (b) Sections 2.1 (a)(y)(iii), (iv) and (v) at any time
and from time
to time shall be referred to as the "Formula Amount". The Revolving
Advances
shall be evidenced by one or more secured promissory notes
(collectively, the
"Revolving Credit Note") substantially in the form attached hereto
as Exhibit
2.1(a).
(b) Intentionally Omitted.
(c) Discretionary Rights. Until such time as a current appraisal
is
conducted on the Borrowers' Inventory and reviewed to the
satisfaction of the
Agent, the Inventory Advance Rate shall be set at 60%. Subject to
Section 16.2,
the Advance Rates may be increased or decreased by Agent at any
time and from
time to time in the exercise of its reasonable discretion. Each
Borrower
consents to any such increases or decreases and acknowledges that
decreasing the
Advance Rates or increasing the reserves may limit or restrict
Advances
requested by Borrowing Agent.
2.2.
Procedure for Borrowing Advances.
(a) Borrowing Agent on behalf of any Borrower may notify Agent
prior
to 11:00 a.m. on a Business Day of a Borrower's request to incur,
on that day, a
Revolving Advance hereunder. Should any amount required to be paid
as interest
hereunder, or as fees or other charges under this Agreement or any
Other
Document, or with respect to any other Obligation, become due, same
shall be
deemed a request for a Revolving Advance as of the date such
payment is due, in
the amount required to pay in full such interest, fee, charge or
Obligation
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<PAGE>
under this Agreement or any other agreement with Agent or Lenders,
and such
request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event
any
Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent
shall give
Agent at least three (3) Business Days' prior written notice,
specifying (i) the
date of the proposed borrowing (which shall be a Business Day),
(ii) the type of
borrowing and the amount on the date of such Advance to be
borrowed, which
amount shall be in a minimum amount of $1,000,000 and in integral
multiples of
$500,000 thereafter, and (iii) the duration of the first Interest
Period
therefor. Interest Periods for Eurodollar Rate Loans shall be for
one, two or
three months; provided, if an Interest Period would end on a day
that is not a
Business Day, it shall end on the next succeeding Business Day
unless such day
falls in the next succeeding calendar month in which case the
Interest Period
shall end on the next preceding Business Day. No Eurodollar Rate
Loan shall be
made available to Borrower during the continuance of a Default or
an Event of
Default.
(c) Each Interest Period of a Eurodollar Rate Loan shall commence
on
the date such Eurodollar Rate Loan is made and shall end on such
date as
Borrowing Agent may elect as set forth in subsection (b)(iii) above
provided
that the exact length of each Interest Period shall be determined
in accordance
with the practice of the interbank market for offshore Dollar
deposits and no
Interest Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period
applicable to a Eurodollar Rate Loan by its notice of borrowing
given to Agent
pursuant to Section 2.2(b) or by its notice of conversion given to
Agent
pursuant to Section 2.2(d), as the case may be. Borrowing Agent
shall elect the
duration of each succeeding Interest Period by giving irrevocable
written notice
to Agent of such duration not less than three (3) Business Days
prior to the
last day of the then current Interest Period applicable to such
Eurodollar Rate
Loan. If Agent does not receive timely notice of the Interest
Period elected by
Borrowing Agent, Borrowers shall be deemed to have elected to
convert to a
Domestic Rate Loan subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and
be
continuing, any Borrower may, on the last Business Day of the then
current
Interest Period applicable to any outstanding Eurodollar Rate Loan,
or on any
Business Day with respect to Domestic Rate Loans, convert any such
loan into a
loan of another type in the same aggregate principal amount
provided that any
conversion of a Eurodollar Rate Loan shall be made only on the last
Business Day
of the then current Interest Period applicable to such Eurodollar
Rate Loan. If
a Borrower desires to convert a loan, Borrowing Agent shall give
Agent not less
than three (3) Business Days' prior written notice to convert from
a Domestic
Rate Loan to a Eurodollar Rate Loan or one (1) Business Day's prior
written
notice to convert from a Eurodollar Rate Loan to a Domestic Rate
Loan,
specifying the date of such conversion, the loans to be converted
and if the
conversion is from a Domestic Rate Loan to any other type of loan,
the duration
of the first Interest Period therefor. After giving effect to each
such
conversion, there shall not be outstanding more than five (5)
Eurodollar Rate
Loans, in the aggregate.
(e) Intentionally Omitted.
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<PAGE>
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent
and
Lenders harmless from and against any and all losses or expenses
that Agent and
Lenders may sustain or incur as a consequence of any prepayment,
conversion of
or any default by any Borrower in the payment of the principal of
or interest on
any Eurodollar Rate Loan or failure by any Borrower to complete a
borrowing of,
a prepayment of or conversion of or to a Eurodollar Rate Loan after
notice
thereof has been given, including, but not limited to, any interest
payable by
Agent or Lenders to lenders of funds obtained by it in order to
make or maintain
its Eurodollar Rate Loans hereunder. A certificate as to any
additional amounts
payable pursuant to the foregoing sentence submitted by Agent or
any Lender to
Borrowing Agent shall be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof, if any applicable
law,
treaty, regulation or directive, or any change therein or in the
interpretation
or application thereof, shall make it unlawful for any Lender (for
purposes of
this subsection (g), the term "Lender" shall include any Lender and
the office
or branch where any Lender or any corporation or bank controlling
such Lender
makes or maintains any Eurodollar Rate Loans) to make or maintain
its Eurodollar
Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans
hereunder
shall forthwith be cancelled and Borrowers shall, if any affected
Eurodollar
Rate Loans are then outstanding, promptly upon request from Agent,
either pay
all such affected Eurodollar Rate Loans or convert such affected
Eurodollar Rate
Loans into loans of another type. If any such payment or conversion
of any
Eurodollar Rate Loan is made on a day that is not the last day of
the Interest
Period applicable to such Eurodollar Rate Loan, Borrowers shall pay
Agent, upon
Agent's request, such amount or amounts as may be necessary to
compensate
Lenders for any loss or expense sustained or incurred by Lenders in
respect of
such Eurodollar Rate Loan as a result of such payment or
conversion, including
(but not limited to) any interest or other amounts payable by
Lenders to lenders
of funds obtained by Lenders in order to make or maintain such
Eurodollar Rate
Loan. A certificate as to any additional amounts payable pursuant
to the
foregoing sentence submitted by Lenders to Borrowing Agent shall be
conclusive
absent manifest error.
2.3.
Disbursement of Advance Proceeds.
All
Advances shall be disbursed from whichever office or other place
Agent
may designate from time to time and, together with any and all
other Obligations
of Borrowers to Agent or Lenders, shall be charged to Borrowers'
Account on
Agent's books. During the Term, Borrowers may use the Revolving
Advances by
borrowing, prepaying and reborrowing, all in accordance with the
terms and
conditions hereof. The proceeds of each Revolving Advance requested
by Borrowers
or deemed to have been requested by Borrowers under Section 2.2(a)
hereof shall,
with respect to requested Revolving Advances to the extent Lenders
make such
Revolving Advances, be made available to the applicable Borrower on
the day so
requested by way of credit to such Borrower's operating account at
PNC, or such
other bank as Borrowing Agent may designate following notification
to Agent, in
immediately available federal funds or other immediately available
funds or,
with respect to Revolving Advances deemed to have been requested by
any
Borrower, be disbursed to Agent to be applied to the outstanding
Obligations
giving rise to such deemed request.
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<PAGE>
2.4.
Intentionally Omitted.
2.5.
Maximum Advances.
The
aggregate balance of Revolving Advances outstanding at any time
shall
not exceed the lesser of (a) Maximum Revolving Advance Amount less
outstanding
Letters of Credit, or (b) the Formula Amount.
2.6.
Repayment of Advances.
(a) The Revolving Advances shall be due and payable in full on
the
last day of the Term subject to earlier prepayment as herein
provided.
(b) Each Borrower recognizes that the amounts evidenced by
checks,
notes, drafts or any other items of payment relating to and/or
proceeds of
Collateral may not be collectible by Agent on the date received.
In
consideration of Agent's agreement to conditionally credit
Borrowers' Account as
of the Business Day on which Agent receives those items of payment,
each
Borrower agrees that, in computing the charges under this
Agreement, all items
of payment shall be deemed applied by Agent on account of the
Obligations one
(1) Business Day after the Business Day Agent receives such
payments via wire
transfer or electronic depository check. Agent is not, however,
required to
credit Borrowers' Account for the amount of any item of payment
which is
unsatisfactory to Agent in the Agent's reasonable discretion, and
Agent may
charge Borrowers' Account for the amount of any item of payment
which is
returned to Agent unpaid.
(c) All payments of principal, interest and other amounts
payable
hereunder, or under any of the Other Documents shall be made to
Agent at the
Payment Office not later than 1:00 P.M. (New York Time) on the due
date therefor
in lawful money of the United States of America in federal funds or
other funds
immediately available to Agent. Agent shall have the right to
effectuate payment
on any and all Obligations due and owing hereunder by charging
Borrowers'
Account or by making Advances as provided in Section 2.2
hereof.
(d) Borrowers shall pay principal, interest, and all other
amounts
payable hereunder, or under any related agreement, without any
deduction
whatsoever, including, but not limited to, any deduction for any
setoff or
counterclaim.
2.7.
Repayment of Excess Advances.
The
aggregate balance of Advances outstanding at any time in excess of
the
maximum amount of Advances permitted hereunder shall be immediately
due and
payable without the necessity of any demand, at the Payment Office,
whether or
not a Default or Event of Default has occurred.
2.8.
Statement of Account.
Agent shall maintain, in accordance with its customary procedures,
a loan
account ("Borrowers' Account") in the name of Borrowers in which
shall be
recorded the date and amount of each Advance made by Agent and the
date and
amount of each payment in respect
21
<PAGE>
thereof; provided, however, the failure by Agent to record the date
and amount
of any Advance shall not adversely affect Agent or any Lender. Each
month, Agent
shall send to Borrowing Agent a statement showing the accounting
for the
Advances made, payments made or credited in respect thereof, and
other
transactions between Agent and Borrowers, during such month. The
monthly
statements shall be deemed correct and binding upon Borrowers in
the absence of
manifest error and shall constitute an account stated between
Lenders and
Borrowers unless Agent receives a written statement of Borrowers'
specific
exceptions thereto within thirty (30) days after such statement is
received by
Borrowing Agent. The records of Agent with respect to the loan
account shall be
conclusive evidence absent manifest error of the amounts of
Advances and other
charges thereto and of payments applicable thereto.
2.9.
Letters of Credit.
Subject to the terms and conditions hereof and upon prior request
by
Borrowing Agent to Agent by 10:00 a.m. on the date which is five
(5) Business
Days prior to the proposed issuance thereof, Agent shall issue or
cause the
issuance of Letters of Credit ("Letters of Credit") on behalf of
any Borrower;
provided, however, that Agent will not be required to issue or
cause to be
issued any Letters of Credit to the extent that the face amount of
such Letters
of Credit would then cause the sum of (i) the outstanding Revolving
Advances
plus (ii) outstanding Letters of Credit and GE Proceeds Advances to
exceed the
lesser of (x) the Maximum Revolving Advance Amount or (y) the
Formula Amount.
The maximum amount of outstanding Letters of Credit shall not
exceed $20,000,000
in the aggregate at any time. All disbursements or payments related
to Letters
of Credit shall be deemed to be Domestic Rate Loans consisting of
Revolving
Advances and shall bear interest at the Revolving Interest Rate for
Domestic
Rate Loans; Letters of Credit that have not been drawn upon shall
not bear
interest. The term "Letters of Credit" shall include the Letters of
Credit set
forth on Schedule 2.9, each of which shall be deemed to be issued
pursuant to
this Agreement as of the date hereof.
2.10. Issuance of Letters of Credit.
(a) Borrowing Agent, on behalf of Borrowers, may request Agent
to
issue or cause the issuance of a Letter of Credit by delivering to
Agent at the
Payment Office, Agent's form of Letter of Credit Application (the
"Letter of
Credit Application") completed to the satisfaction of Agent; and,
such other
certificates, documents and other papers and information as Agent
may reasonably
request. Borrowing Agent, on behalf of Borrowers, also has the
right to give
instructions and make agreements with respect to any application,
any applicable
letter of credit and security agreement, any applicable letter of
credit
reimbursement agreement and/or any other applicable agreement, any
letter of
credit and the disposition of documents, disposition of any
unutilized funds,
and to agree with Agent upon any amendment, extension or renewal of
any Letter
of Credit.
(b) Each Letter of Credit shall, among other things, (i) provide
for
the payment of sight drafts, other written demands for payment, or
acceptances
of usance drafts when presented for honor thereunder in accordance
with the
terms thereof and when accompanied by the documents described
therein and (ii)
have an expiry date not later than twelve (12) months after such
Letter of
Credit's date of issuance and in no event later than the last day
of the Term.
Each standby Letter of Credit shall be subject either to the
Uniform
22
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Customs and Practice for Documentary Credits (1993 Revision),
International
Chamber of Commerce Publication No. 500, and any amendments or
revision thereof
adhered to by the Issuer ("UCP 500") or the International Standby
Practices
(ISP98-International Chamber of Commerce Publication Number 590)
(the "ISP98
Rules"), as determined by Agent, and each trade Letter of Credit
shall be
subject to UCP 500.
(c) Agent shall use its reasonable efforts to notify Lenders of
the
request by Borrowing Agent for a Letter of Credit hereunder.
2.11. Requirements For Issuance of Letters of Credit.
Borrowing Agent shall authorize and direct any Issuer to name
the
applicable Borrower as the "Applicant" or "Account Party" of each
Letter of
Credit. If Agent is not the Issuer of any Letter of Credit,
Borrowing Agent
shall authorize and direct the Issuer to deliver to Agent all
instruments,
documents, and other writings and property received by the Issuer
pursuant to
the Letter of Credit and to accept and rely upon Agent's
instructions and
agreements with respect to all matters arising in connection with
the Letter of
Credit, the application therefor.
2.12. Disbursements, Reimbursement.
(a) Immediately upon the issuance of each Letter of Credit,
each
Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to,
purchase from Agent a participation in such Letter of Credit and
each drawing
thereunder in an amount equal to such Lender's Commitment
Percentage of the
Maximum Face Amount of such Letter of Credit and the amount of such
drawing,
respectively.
(b) In the event of any request for a drawing under a Letter of
Credit
by the beneficiary or transferee thereof, Agent will promptly
notify Borrowing
Agent. Provided that Borrowing Agent shall have received such
notice, the
Borrowers shall reimburse (such obligation to reimburse Agent shall
sometimes be
referred to as a "Reimbursement Obligation") Agent prior to 12:00
Noon, New York
time on each date that an amount is paid by Agent under any Letter
of Credit
(each such date, a "Drawing Date") in an amount equal to the amount
so paid by
Agent. In the event Borrowers fail to reimburse Agent for the full
amount of any
drawing under any Letter of Credit by 12:00 Noon, New York time, on
the Drawing
Date, Agent will promptly notify each Lender thereof, and Borrowers
shall be
deemed to have requested that a Domestic Rate Loan be made by the
Lenders to be
disbursed on the Drawing Date under such Letter of Credit, subject
to the amount
of the unutilized portion of the lesser of Maximum Revolving
Advance Amount or
the Formula Amount and subject to Section 8.2 hereof. Any notice
given by Agent
pursuant to this Section 2.12(b) may be oral if immediately
confirmed in
writing; provided that the lack of such an immediate confirmation
shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Lender shall upon any notice pursuant to Section 2.12(b)
make
available to Agent an amount in immediately available funds equal
to its
Commitment Percentage of the amount of the drawing, whereupon the
participating
Lenders shall (subject to Section 2.12(d)) each be deemed to have
made a
Domestic Rate Loan to Borrowers in that amount. If any Lender so
notified fails
to make available to Agent the amount of such Lender's
23
<PAGE>
Commitment Percentage of such amount by no later than 2:00 p.m.,
New York time
on the Drawing Date, then interest shall accrue on such Lender's
obligation to
make such payment, from the Drawing Date to the date on which such
Lender makes
such payment (i) at a rate per annum equal to the Federal Funds
Open Rate during
the first three days following the Drawing Date and (ii) at a rate
per annum
equal to the rate applicable to Domestic Rate Loans on and after
the fourth day
following the Drawing Date. Agent will promptly give notice of the
occurrence of
the Drawing Date, but failure of Agent to give any such notice on
the Drawing
Date or in sufficient time to enable any Lender to effect such
payment on such
date shall not relieve such Lender from its obligation under this
Section
2.12(c), provided that such Lender shall not be obligated to pay
interest as
provided in Section 2.12(c) (i) and (ii) until and commencing from
the date of
receipt of notice from Agent of a drawing.
(d) With respect to any unreimbursed drawing that is not
converted
into a Domestic Rate Loan to Borrowers in whole or in part as
contemplated by
Section 2.12(b), because of Borrowers' failure to satisfy the
conditions set
forth in Section 8.2 (other than any notice requirements) or for
any other
reason, Borrowers shall be deemed to have incurred from Agent a
borrowing (each
a "Letter of Credit Borrowing") in the amount of such drawing. Such
Letter of
Credit Borrowing shall be due and payable on demand (together with
interest) and
shall bear interest at the rate per annum applicable to a Domestic
Rate Loan.
Each Lender's payment to Agent pursuant to Section 2.12(c) shall be
deemed to be
a payment in respect of its participation in such Letter of Credit
Borrowing and
shall constitute a "Participation Advance" from such Lender in
satisfaction of
its Participation Commitment under this Section 2.12.
(e) Each Lender's Participation Commitment shall continue until
the
last to occur of any of the following events: (x) Agent ceases to
be obligated
to issue or cause to be issued Letters of Credit hereunder; (y) no
Letter of
Credit issued or created hereunder remains outstanding and
uncancelled and (z)
all Persons (other than the Borrowers) have been fully reimbursed
for all
payments made under or relating to Letters of Credit.
2.13. Repayment of Participation Advances.
(a) Upon (and only upon) receipt by Agent for its account of
immediately available funds from Borrowers (i) in reimbursement of
any payment
made by the Agent under the Letter of Credit with respect to which
any Lender
has made a Participation Advance to Agent, or (ii) in payment of
interest on
such a payment made by Agent under such a Letter of Credit, Agent
will pay to
each Lender, in the same funds as those received by Agent, the
amount of such
Lender's Commitment Percentage of such funds, except Agent shall
retain the
amount of the Commitment Percentage of such funds of any Lender
that did not
make a Participation Advance in respect of such payment by
Agent.
(b) If Agent is required at any time to return to any Borrower, or
to
a trustee, receiver, liquidator, custodian, or any official in any
insolvency
proceeding, any portion of the payments made by Borrowers to Agent
pursuant to
Section 2.13(a) in reimbursement of a payment made under the Letter
of Credit or
interest or fee thereon, each Lender shall, on demand of Agent,
forthwith return
to Agent the amount of its Commitment Percentage of any amounts so
returned by
Agent plus interest at the Federal Funds Effective Rate.
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2.14. Documentation.
Each
Borrower agrees to be bound by the terms of the Letter of
Credit
Application and, absent manifest error, by Agent's interpretations
of any Letter
of Credit issued on behalf of such Borrower and by Agent's written
regulations
and customary practices relating to letters of credit, though
Agent's
interpretations may be different from such Borrower's own. In the
event of a
conflict between the Letter of Credit Application and this
Agreement, this
Agreement shall govern. It is understood and agreed that, except in
the case of
gross negligence or willful misconduct (as determined by a court of
competent
jurisdiction in a final non-appealable judgment), Agent shall not
be liable for
any error, negligence and/or mistakes, whether of omission or
commission, in
following the Borrowing Agent's or any Borrower's instructions or
those
contained in the Letters of Credit or any modifications, amendments
or
supplements thereto.
2.15. Determination to Honor Drawing Request.
In
determining whether to honor any request for drawing under any
Letter of
Credit by the beneficiary thereof, Agent shall be responsible only
to determine
that the documents and certificates required to be delivered under
such Letter
of Credit have been delivered and that they comply on their face
with the
requirements of such Letter of Credit and that any other drawing
condition
appearing on the face of such Letter of Credit has been satisfied
in the manner
so set forth.
2.16. Nature of Participation and Reimbursement Obligations.
Each
Lender's obligation in accordance with this Agreement to make
the
Revolving Advances or Participation Advances as a result of a
drawing under a
Letter of Credit, and the obligations of Borrowers to reimburse
Agent upon a
draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable,
and shall be performed strictly in accordance with the terms of
this Section
2.16 under all circumstances, including the following
circumstances:
(a) any set-off, counterclaim, recoupment, defense or other
right
which such Lender may have against Agent, any Borrower or any other
Person for
any reason whatsoever;
(b) the failure of any Borrower or any other Person to comply,
in
connection with a Letter of Credit Borrowing, with the conditions
set forth in
this Agreement for the making of a Revolving Advance, it being
acknowledged that
such conditions are not required for the making of a Letter of
Credit Borrowing
and the obligation of the Lenders to make Participation Advances
under Section
2.12;
(c) any lack of validity or enforceability of any Letter of
Credit;
(d) any claim of breach of warranty that might be made by Borrower
or
any Lender against the beneficiary of a Letter of Credit, or the
existence of
any claim, set-off, recoupment, counterclaim, crossclaim, defense
or other right
which any Borrower or any Lender may have at any time against a
beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or
the proceeds
thereof (or any Persons for whom any such transferee may be
acting), Agent or
any Lender or any other Person, whether in connection with this
Agreement,
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<PAGE>
the transactions contemplated herein or any unrelated transaction
(including any
underlying transaction between any Borrower or any Subsidiaries of
such Borrower
and the beneficiary for which any Letter of Credit was
procured);
(e) the lack of power or authority of any signer of (or any defect
in
or forgery of any signature or endorsement on) or the form of or
lack of
validity, sufficiency, accuracy, enforceability or genuineness of
any draft,
demand, instrument, certificate or other document presented under
or in
connection with any Letter of Credit, or any fraud or alleged fraud
in
connection with any Letter of Credit, or the transport of any
property or
provisions of services relating to a Letter of Credit, in each case
even if
Agent or any of Agent's Affiliates has been notified thereof;
(f) payment by Agent under any Letter of Credit against
presentation
of a demand, draft or certificate or other document which does not
comply with
the terms of such Letter of Credit;
(g)
the solvency of, or any acts or omissions by, any beneficiary
of
any Letter of Credit, or any other Person having a role in any
transaction or
obligation relating to a Letter of Credit, or the existence,
nature, quality,
quantity, condition, value or other characteristic of any property
or services
relating to a Letter of Credit;
(h) any failure by the Agent or any of Agent's Affiliates to issue
any
Letter of Credit in the form requested by Borrowing Agent, unless
the Agent has
received written notice from Borrowing Agent of such failure within
three (3)
Business Days after the Agent shall have furnished Borrowing Agent
a copy of
such Letter of Credit and such error is material and no drawing has
been made
thereon prior to receipt of such notice;
(i) any Material Adverse Effect on any Borrower;
(j) any breach of this Agreement or any Other Document by any
party
thereto;
(k) the occurrence or continuance of an insolvency proceeding
with
respect to any Borrower;
(l) the fact that a Default or Event of Default shall have
occurred
and be continuing;
(m) the fact that the Term shall have expired or this Agreement or
the
Obligations hereunder shall have been terminated; and
(n) any other circumstance or happening whatsoever, whether or
not
similar to any of the foregoing.
2.17. Indemnity.
In
addition to amounts payable as provided in Section 16.5, each
Borrower
hereby agrees to protect, indemnify, pay and save harmless Agent
and any of
Agent's Affiliates that have issued
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a Letter of Credit from and against any and all claims, demands,
liabilities,
damages, taxes, penalties, interest, judgments, losses, costs,
charges and
expenses (including reasonable fees, expenses and disbursements of
counsel and
allocated costs of internal counsel) which the Agent or any of
Agent's
Affiliates may incur or be subject to as a consequence, direct or
indirect, of
the issuance of any Letter of Credit, other than as a result of (A)
the gross
negligence or willful misconduct of the Agent as determined by a
final and
non-appealable judgment of a court of competent jurisdiction or (b)
the wrongful
dishonor by the Agent or any of Agent's Affiliates of a proper
demand for
payment made under any Letter of Credit, except if such dishonor
resulted from
any act or omission, whether rightful or wrongful, of any present
or future de
jure or de facto Governmental Body (all such acts or omissions
herein called
"Governmental Acts").
2.18. Liability for Acts and Omissions.
As
between Borrowers and Agent and Lenders, each Borrower assumes all
risks
of the acts and omissions of, or misuse of the Letters of Credit
by, the
respective beneficiaries of such Letters of Credit. In furtherance
and not in
limitation of the respective foregoing, Agent shall not be
responsible for: (i)
the form, validity, sufficiency, accuracy, genuineness or legal
effect of any
document submitted by any party in connection with the application
for an
issuance of any such Letter of Credit, even if it should in fact
prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent
or forged
(even if Agent shall have been notified thereof); (ii) the validity
or
sufficiency of any instrument transferring or assigning or
purporting to
transfer or assign any such 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; (iii) the failure of the
beneficiary of
any such Letter of Credit, or any other party to which such Letter
of Credit may
be transferred, to comply fully with any conditions required in
order to draw
upon such Letter of Credit or any other claim of any Borrower
against any
beneficiary of such Letter of Credit, or any such transferee, or
any dispute
between or among any Borrower and any beneficiary of any Letter of
Credit or any
such transferee; (iv) 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; (v) errors in interpretation of
technical
terms; (vi) any loss or delay in the transmission or otherwise of
any document
required in order to make a drawing under any such Letter of Credit
or of the
proceeds thereof; (vii) the misapplication by the beneficiary of
any such Letter
of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii)
any consequences arising from causes beyond the control of Agent,
including any
governmental acts, and none of the above shall affect or impair, or
prevent the
vesting of, any of Agent's rights or powers hereunder. Nothing in
the preceding
sentence shall relieve Agent from liability for Agent's gross
negligence or
willful misconduct (as determined by a court of competent
jurisdiction in a
final non-appealable judgment) in connection with actions or
omissions described
in such clauses (i) through (viii) of such sentence. In no event
shall Agent or
Agent's Affiliates be liable to any Borrower for any indirect,
consequential,
incidental, punitive, exemplary or special damages or expenses
(including
without limitation attorneys' fees), or for any damages resulting
from any
change in the value of any property relating to a Letter of
Credit.
Without limiting the generality of the foregoing, Agent and each of
its
Affiliates (i) may rely on any oral or other communication believed
in good
faith by Agent or such Affiliate to have been authorized or given
by or on
behalf of the applicant for a Letter of Credit, (ii) may honor any
presentation
if the documents presented appear on their face substantially to
comply
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<PAGE>
with the terms and conditions of the relevant Letter of Credit;
(iii) may honor
a previously dishonored presentation under a Letter of Credit,
whether such
dishonor was pursuant to a court order, to settle or compromise any
claim of
wrongful dishonor, or otherwise, and shall be entitled to
reimbursement to the
same extent as if such presentation had initially been honored,
together with
any interest paid by Agent or its Affiliates; (iv) may honor any
drawing that is
payable upon presentation of a statement advising negotiation or
payment, upon
receipt of such statement (even if such statement indicates that a
draft or
other document is being delivered separately), and shall not be
liable for any
failure of any such draft or other document to arrive, or to
conform in any way
with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank
claiming that it rightfully honored under the laws or practices of
the place
where such bank is located; and (vi) may settle or adjust any claim
or demand
made on Agent or its Affiliate in any way related to any order
issued at the
applicant's request to an air carrier, a letter of guarantee or of
indemnity
issued to a carrier or any similar document (each an "Order") and
honor any
drawing in connection with any Letter of Credit that is the subject
of such
Order, notwithstanding that any drafts or other documents presented
in
connection with such Letter of Credit fail to conform in any way
with such
Letter of Credit. Nothing in the preceding sentence shall relieve
Agent from
liability for Agent's gross negligence or willful misconduct (as
determined by a
court of competent jurisdiction in a final non-appealable judgment)
in
connection with actions or omissions described in such clauses (i)
through (vii)
of such sentence. In no event shall Agent or Agent's Affiliates be
liable to any
Borrower for any indirect, consequential, incidental, punitive,
exemplary or
special damages or expenses (including without limitation
attorneys' fees), or
for any damages resulting from any change in the value of any
property relating
to a Letter of Credit.
In
furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Agent
under or in
connection with the Letters of Credit issued by it or any documents
and
certificates delivered thereunder, if taken or omitted in good
faith and without
gross negligence or willful misconduct (as determined by a court of
competent
jurisdiction in a final non-appealable judgment), shall not put
Agent under any
resulting liability to any Borrower or any Lender.
2.19. Additional Payments.
Any
sums expended by Agent or any Lender due to any Borrower's failure
to
perform or comply with its obligations under this Agreement or any
Other
Document including, without limitation, any Borrower's obligations
under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged
to Borrowers'
Account as a Revolving Advance and added to the Obligations.
2.20. Manner of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall be advanced
according
to the applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on
account
of the principal of and interest on the Revolving Advances, shall
be applied to
the Revolving Advances pro rata according to the applicable
Commitment
Percentages of Lenders. Except as expressly provided herein, all
payments
(including prepayments) to be made by any Borrower on
28
<PAGE>
account of principal, interest and fees shall be made without set
off or
counterclaim and shall be made to Agent on behalf of the Lenders to
the Payment
Office, in each case on or prior to 1:00 P.M., New York time, in
Dollars and in
immediately available funds.
(c) (i) Notwithstanding anything to the contrary contained in
Sections
2.13(a) and (b) hereof, commencing with the first Business Day
following the
Closing Date, each borrowing of Revolving Advances shall be
advanced by Agent
and each payment by any Borrower on account of Revolving Advances
shall be
applied first to those Revolving Advances advanced by Agent. On or
before 1:00
P.M., New York time, on each Settlement Date commencing with the
first
Settlement Date following the Closing Date, Agent and Lenders shall
make certain
payments as follows: (I) if the aggregate amount of new Revolving
Advances made
by Agent during the preceding Week (if any) exceeds the aggregate
amount of
repayments applied to outstanding Revolving Advances during such
preceding Week,
then each Lender shall provide Agent with funds in an amount equal
to its
applicable Commitment Percentage of the difference between (w) such
Revolving
Advances and (x) such repayments and (II) if the aggregate amount
of repayments
applied to outstanding Revolving Advances during such Week exceeds
the aggregate
amount of new Revolving Advances made during such Week, then Agent
shall provide
each Lender with funds in an amount equal to its applicable
Commitment
Percentage of the difference between (y) such repayments and (z)
such Revolving
Advances.
(ii) Each Lender shall be entitled to earn interest at the
applicable Revolving Interest Rate on outstanding Advances which
it
has funded.
(iii) Promptly following each Settlement Date, Agent shall
submit
to each Lender a certificate with respect to payments received
and
Advances made during the Week immediately preceding such
Settlement
Date. Such certificate of Agent shall be conclusive in the absence
of
manifest error.
(d) If any Lender or Participant (a "benefited Lender") shall at
any
time receive any payment of all or part of its Advances, or
interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or
involuntarily
or by set-off) in a greater proportion than any such payment to and
Collateral
received by any other Lender, if any, in respect of such other
Lender's
Advances, or interest thereon, and such greater proportionate
payment or receipt
of Collateral is not expressly permitted hereunder, such benefited
Lender shall
purchase for cash from the other Lenders a participation in such
portion of each
such other Lender's Advances, or shall provide such other Lender
with the
benefits of any such Collateral, or the proceeds thereof, as shall
be necessary
to cause such benefited Lender to share the excess payment or
benefits of such
Collateral or proceeds ratably with each of the other Lenders;
provided,
however, that if all or any portion of such excess payment or
benefits is
thereafter recovered from such benefited Lender, such purchase
shall be
rescinded, and the purchase price and benefits returned, to the
extent of such
recovery, but without interest. Each Lender so purchasing a portion
of another
Lender's Advances may exercise all rights of payment (including,
without
limitation, rights of set-off) with respect to such portion as
fully as if such
Lender were the direct holder of such portion.
(e) Unless Agent shall have been notified by telephone, confirmed
in
writing, by any Lender that such Lender will not make the amount
which would
constitute its applicable
29
<PAGE>
Commitment Percentage of the Advances available to Agent, Agent may
(but shall
not be obligated to) assume that such Lender shall make such amount
available to
Agent on the next Settlement Date and, in reliance upon such
assumption, make
available to Borrowers a corresponding amount. Agent will promptly
notify
Borrowers of its receipt of any such notice from a Lender. If such
amount is
made available to Agent on a date after such next Settlement Date,
such Lender
shall pay to Agent on demand an amount equal to the product of (i)
the daily
average Federal Funds Effective Rate (computed on the basis of a
year of 360
days) during such period as quoted by Agent, times (ii) such
amount, times (iii)
the number of days from and including such Settlement Date to the
date on which
such amount becomes immediately available to Agent. A certificate
of Agent
submitted to any Lender with respect to any amounts owing under
this paragraph
(e) shall be conclusive, in the absence of manifest error. If such
amount is not
in fact made available to Agent by such Lender within three (3)
Business Days
after such Settlement Date, Agent shall be entitled to recover such
an amount,
with interest thereon at the rate per annum then applicable to such
Revolving
Advances hereunder, on demand from Borrowers; provided, however,
that Agent's
right to such recovery shall not prejudice or otherwise adversely
affect
Borrowers' rights (if any) against such Lender.
2.21. Use of Proceeds.
Borrowers shall apply the proceeds of Advances to provide for their
working
capital needs, to pay fees and expenses relating to this
transaction and the
transactions contemplated by the Accounts Sales Agreement, for
capital
expenditures and for general corporate purposes of the
Borrowers.
2.22. Defaulting Lender.
(a) Notwithstanding anything to the contrary contained herein, in
the
event any Lender (x) has refused (which refusal constitutes a
breach by such
Lender of its obligations under this Agreement) to make available
its portion of
any Advance or (y) notifies either Agent or Borrowing Agent that it
does not
intend to make available its portion of any Advance (if the actual
refusal would
constitute a breach by such Lender of its obligations under this
Agreement)
(each, a "Lender Default"), all rights and obligations hereunder of
such Lender
(a "Defaulting Lender") as to which a Lender Default is in effect
and of the
other parties hereto shall be modified to the extent of the express
provisions
of this Section 2.22 while such Lender Default remains in
effect.
(b) Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on
their
respective Commitment Percentages, and no Commitment Percentage of
any Lender or
any pro rata share of any Advances required to be advanced by any
Lender shall
be increased as a result of such Lender Default. Amounts received
in respect of
principal of any type of Advances shall be applied to reduce the
applicable
Advances of each Lender pro rata based on the aggregate of the
outstanding
Advances of that type of all Lenders at the time of such
application; provided,
that, such amount shall not be applied to any Advances of a
Defaulting Lender at
any time when, and to the extent that, the aggregate amount of
Advances of any
Non-Defaulting Lender exceeds such Non-Defaulting Lender's
Commitment Percentage
of all Advances then outstanding.
30
<PAGE>
(c) A Defaulting Lender shall not be entitled to give instructions
to
Agent or to approve, disapprove, consent to or vote on any matters
relating to
this Agreement and the Other Documents. All amendments, waivers and
other
modifications of this Agreement and the Other Documents may be made
without
regard to a Defaulting Lender and, for purposes of the definition
of "Required
Lenders", a Defaulting Lender shall be deemed not to be a Lender
and not to have
Advances outstanding.
(d) Other than as expressly set forth in this Section 2.22, the
rights
and obligations of a Defaulting Lender (including the obligation to
indemnify
Agent) and the other parties hereto shall remain unchanged. Nothing
in this
Section 2.22 shall be deemed to release any Defaulting Lender from
its
obligations under this Agreement and the Other Documents, shall
alter such
obligations, shall operate as a waiver of any default by such
Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent
or any Lender
may have against any Defaulting Lender as a result of any default
by such
Defaulting Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a
Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting
Lender and shall
be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1.
Interest.
Interest on Revolving Advances shall be payable in arrears on the
first day
of each month with respect to Domestic Rate Loans and, with respect
to
Eurodollar Rate Loans, at the end of each Interest Period. Interest
charges
shall be computed on the actual principal amount of Advances
outstanding during
the month (the "Monthly Advances") at a rate per annum equal to the
applicable
Revolving Interest Rate. Whenever, subsequent to the date of this
Agreement, the
Alternate Base Rate is increased or decreased, the applicable
Revolving Interest
Rate for Domestic Rate Loans shall be similarly changed without
notice or demand
of any kind by an amount equal to the amount of such change in the
Alternate
Base Rate during the time such change or changes remain in effect.
The
Eurodollar Rate shall be adjusted with respect to Eurodollar Rate
Loans without
notice or demand of any kind on the effective date of any change in
the Reserve
Percentage as of such effective date. Upon and after the occurrence
of an Event
of Default, and during the continuation thereof, the Obligations
shall bear
interest at the applicable Revolving Interest Rate plus two percent
(2%) per
annum (the "Default Rate").
3.2. Letter of Credit
Fees.
(a) Borrowers shall pay (x) to Agent, for the benefit of Lenders,
fees
for each Letter of Credit for the period from and excluding the
date of issuance
of same to and including the date of expiration or termination,
equal to the
average daily face amount of each outstanding Letter of Credit
multiplied by one
percent (1.00%), such fees to be calculated on the basis of a
360-day year for
the actual number of days elapsed and to be payable quarterly in
arrears on the
first day of each January, April, July, and October and on the last
day of the
Term and (y) to the Issuer, for its own account, fees for each
Letter of Credit
for the period from and excluding the date of issuance of same to
and including
the date of expiration or termination, equal to the
31
<PAGE>
average daily face amount of each outstanding Letter of Credit
multiplied by one
fourth of one percent (0.25%), such fees to be calculated on the
basis of a
360-day year for the actual number of days elapsed and to be
payable quarterly
in arrears on the first day of each January, April, July, and
October and on the
last day of the Term , and (z) to the Issuer, for its own account
any and all
fees and expenses as agreed upon by the Issuer and the Borrowing
Agent in
connection with any Letter of Credit, including, without
limitation, in
connection with the opening, amendment or renewal of any such
Letter of Credit
and any acceptances created thereunder and shall reimburse Agent
for any and all
fees and expenses, if any, paid by Agent to the Issuer (all of the
foregoing
fees, the "Letter of Credit Fees"). All such charges shall be
deemed earned in
full on the date when the same are due and payable hereunder and
shall not be
subject to rebate or proration upon the termination of this
Agreement for any
reason. Any such charge in effect at the time of a particular
transaction shall
be the charge for that transaction, notwithstanding any subsequent
change in the
Issuer's prevailing charges for that type of transaction. All
Letter of Credit
Fees payable hereunder shall be deemed earned in full on the date
when the same
are due and payable hereunder and shall not be subject to rebate or
proration
upon the termination of this Agreement for any reason.
Upon request of the Agent following the occurrence of an Event
of
Default, Borrowers will cause cash to be deposited and maintained
in an account
with Agent, as cash collateral, in an amount equal to one hundred
and five
percent (105%) of the outstanding Letters of Credit, and each
Borrower hereby
irrevocably authorizes Agent, in its discretion, on such Borrower's
behalf and
in such Borrower's name, to open such an account and to make and
maintain
deposits therein, or in an account opened by such Borrower, in the
amounts
required to be made by such Borrower, out of the proceeds of
Receivables or
other Collateral or out of any other funds of such Borrower coming
into any
Lender's possession at any time. Agent will invest such cash
collateral (less
applicable reserves) in such short-term money-market items as to
which Agent and
such Borrower mutually agree and the net return on such investments
shall be
credited to such account and constitute additional cash collateral.
No Borrower
may withdraw amounts credited to any such account except upon
payment and
performance in full of all Obligations and termination of this
Agreement.
3.3.
Facility Fee.
If,
for any month during the Term, the average daily unpaid balance of
the
sum of the Revolving Advances plus Letters of Credit outstanding
for each day of
such month does not equal the Maximum Revolving Advance Amount,
then Borrowers
shall pay to Agent for the ratable benefit of Lenders a fee at a
rate equal to
one fourth of one percent (0.25%) per annum on the amount by which
the Maximum
Revolving Advance Amount exceeds such average daily unpaid balance
of Revolving
Advances plus Letters of Credit outstanding. Such fee shall be
payable to Agent
quarterly in arrears on each January 1, April 1, July 1 and October
1.
3.4.
Intentionally Omitted.
3.5.
Computation of Interest and Fees.
Interest and fees hereunder shall be computed on the basis of a
year of 365
or 366 days, as the case may be, and for the actual number of days
elapsed. If
any payment to be made
32
<PAGE>
hereunder becomes due and payable on a day other than a Business
Day, the due
date thereof shall be extended to the next succeeding Business Day
and interest
thereon shall be payable at the applicable Revolving Interest Rate
during such
extension.
3.6.
Maximum Charges.
In
no event whatsoever shall interest and other charges charged
hereunder
exceed the highest rate permissible under law. In the event
interest and other
charges as computed hereunder would otherwise exceed the highest
rate permitted
under law, such excess amount shall be first applied to any unpaid
principal
balance owed by Borrowers, and if the then remaining excess amount
is greater
than the previously unpaid principal balance, Lenders shall
promptly refund such
excess amount to Borrowers and the provisions hereof shall be
deemed amended to
provide for such permissible rate.
3.7.
Increased Costs.
In
the event that any applicable law, treaty or governmental
regulation, or
any change therein or in the interpretation or application thereof,
or
compliance by any Lender (for purposes of this Section 3.7, the
term "Lender"
shall include Agent or any Lender and any corporation or bank
controlling Agent
or any Lender) and the office or branch where Agent or any Lender
(as so
defined) makes or maintains any Eurodollar Rate Loans with any
request or
directive (whether or not having the force of law) from any central
bank or
other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever
with
respect to this Agreement or any Other Document or change the basis
of taxation
of payments to Agent or any Lender of principal, fees, interest or
any other
amount payable hereunder or under any Other Documents (except for
changes in the
rate of tax on the overall net income of Agent or any Lender by the
jurisdiction
in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special
deposit,
assessment or similar requirement against assets held by, or
deposits in or for
the account of, advances or loans by, or other credit extended by,
any office of
Agent or any Lender, including (without limitation) pursuant to
Regulation D of
the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank
Eurodollar
market any other condition with respect to this Agreement or any
Other Document;
and the result of any of the foregoing is to increase the cost to
Agent or any
Lender of making, renewing or maintaining its Advances hereunder by
an amount
that Agent or such Lender deems to be material or to reduce the
amount of any
payment (whether of principal, interest or otherwise) in respect of
any of the
Advances by an amount that Agent or such Lender reasonably deems to
be material,
then, in any case Borrowers shall promptly pay Agent or such
Lender, upon its
demand, such additional amount as will compensate Agent or such
Lender for such
additional cost or such reduction, as the case may be, provided
that the
foregoing shall not apply to increased costs which are reflected in
the
Eurodollar Rate. Agent or such Lender shall certify
33
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the amount of such additional cost or reduced amount to Borrowers,
and such
certification shall be conclusive absent manifest error.
3.8.
Basis For Determining Interest Rate Inadequate or Unfair.
In
the event that Agent or any Lender shall have reasonably
determined
that:
(a) reasonable means do not exist for ascertaining the Eurodollar
Rate
for any Interest Period;
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank Eurodollar
market, with
respect to an outstanding Eurodollar Rate Loan, a proposed
Eurodollar Rate Loan,
or a proposed conversion of a Domestic Rate Loan into a Eurodollar
Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or
telegraphic
notice of such determination. If such notice is given, (i) any such
requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless
Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City
time) two (2)
Business Days prior to the date of such proposed borrowing, that
its request for
such borrowing shall be cancelled or made as an unaffected type of
Eurodollar
Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan
which was to have
been converted to an affected type of Eurodollar Rate Loan shall be
continued as
or converted into a Domestic Rate Loan, or, if Borrowing Agent
shall notify
Agent, no later than 10:00 a.m. (New York City time) two (2)
Business Days prior
to the proposed conversion, shal
