REVOLVING CREDIT AGREEMENTRevolving Credit Agreement |
|
|
You are currently viewing: This Revolving Credit Agreement involves
WEIDER NUTRITION INTERNAT | WEIDER NUTRITION GROUP, INC | KEYBANK NATIONAL ASSOCIATION. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
DATED as of June 30, 2004
among
WEIDER NUTRITION GROUP, INC.,
THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE 1 HERETO
and
KEYBANK NATIONAL ASSOCIATION in its capacity as Agent
TABLE OF CONTENTS
i
ii
iii
iv
EXHIBITS AND SCHEDULES
v
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of June 30, 2004, by and among (a) WEIDER NUTRITION GROUP, INC. , a Utah corporation (the “Borrower”), (b) KEYBANK NATIONAL ASSOCIATION , a national banking association and the other financial institutions listed on Schedule 1 hereto and (c) KEYBANK NATIONAL ASSOCIATION , as agent for itself and such other financial institutions.
WHEREAS, Borrower desires to obtain a revolving line of credit from the Banks in the amount of TWENTY FIVE MILLION AND NO/100 DOLLARS ($25,000,000) (the “Credit Facility”); and
WHEREAS, the Banks and the Agent are willing to establish the Credit Facility and make loans thereunder to Borrower upon the terms and conditions hereinafter set forth.
NOW THEREFORE , to that end and in consideration of the promises, covenants and agreements contained herein, and the mutual benefits to be derived from this Agreement, the parties agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION .
1. 1. Definitions . The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:
Accounts . See §2.11 hereof.
Account Debtor . See §2.11 hereof.
Affiliate . Any Person that would be considered to be an affiliate of the Borrower under Rule 144(a) of the Rules and Regulations of the Securities and Exchange Commission, as in effect on the date hereof, if the Borrower were issuing securities.
Agent’s Head Office . The Agent’s office located at 50 South Main Street, 20 th Floor, Salt Lake City, Utah 84144, or at such other location as the Agent may designate from time to time.
Agent . KeyBank National Association, acting as agent for the Banks.
Agent’s Special Counsel . Van Cott, Bagley, Cornwall & McCarthy, P.C., or such other counsel as may be approved by the Agent and that is reasonably acceptable to the Borrower.
Assignment and Acceptance . See §19.1 hereof.
Balance Sheet Date . May 31, 2003.
Banks . KeyBank and the other lending institutions listed on Schedule 1 hereto and any other Person who becomes an assignee of any rights and obligations of a Bank pursuant to §19 hereof.
Base Rate . The higher of (a) the annual rate of interest announced from time to time by KeyBank at its office in Cleveland, Ohio, as its “Prime Rate” and (b) the rate equal to one-half of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes of this definition,
1
“Federal Funds Effective Rate” shall mean for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three funds brokers of recognized standing selected by the Agent.
Base Rate Loans . All or any portion of the Revolving Credit Loans bearing interest calculated by reference to the Base Rate.
Borrower . As defined in the preamble hereto.
Borrowing Base . See §2.11 hereof.
Business Day . Any day on which banking institutions in Salt Lake City, Utah, are open for the transaction of banking business and, in the case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
Capital Leases . See §10.3 hereof.
CERCLA . See §7.17 hereof.
Closing Date . The first date on which the conditions set forth in §11 have been satisfied.
Code . The Internal Revenue Code of 1986, as amended.
Collateral . All of the property, rights and interests of the Guarantor and the Borrower that are or are intended to be subject to the security interests created by the Security Documents.
Collateral Event . See §6.2 hereof.
Commitment Percentage . With respect to each Bank, the percentage set forth on Schedule 1 hereto as such Bank’s percentage of the aggregate commitments of all of the Banks.
Consolidated or consolidated . With reference to any term defined herein, shall mean that term as applied to the accounts of the Guarantor and its foreign and domestic subsidiaries, or Borrower and its Subsidiaries, as the case may be, consolidated in accordance with GAAP.
Consolidated EBITDA . See §10 hereof.
Conversion Request . A notice given by the Borrower to the Agent of the Borrower’s election to convert or continue a Loan in accordance with §2.8 hereof.
Credit Agreement . This Revolving Credit Agreement, including the Schedules and Exhibits hereto.
Default . See §13.1 hereof.
Default Rate . The rate of interest payable after the occurrence of an Event of Default pursuant to §5.9 hereof.
Distribution . The declaration or payment of any dividend on or in respect of any shares of any class of capital stock of any Person other than dividends payable solely in shares of
2
common stock of such Person; the purchase, redemption, or other retirement by any Person of any shares of any class of capital stock of such Person, directly or indirectly through a Subsidiary of such Person or otherwise; the return of capital by any Person to its shareholders as such; or any other distribution by any Person on or in respect of any shares of any class of capital stock of such Person.
Dollars or $ . Dollars in lawful currency of the United States of America.
Domestic Lending Office . Initially, the office of each Bank designated as such in Schedule 1 hereto; thereafter, such other office of such Bank, if any, located within the United States that will be making or maintaining Base Rate Loans.
Drawdown Date . The date on which any Revolving Credit Loan is made or is to be made, and the date on which any Revolving Credit Loan is converted or continued in accordance with §2.8.
Drawing Amount . The amount from time to time that the beneficiary or beneficiaries may draw under an outstanding Letter of Credit, as such amount may be reduced from time to time pursuant to the terms of the Letter of Credit.
Effective Date . June 30, 2004.
Eligible Accounts . See §2.11 hereof.
Eligible Inventory . See §2.11 hereof.
EPA . See §7.17(b) hereof.
ERISA . The Employee Retirement Income Security Act of 1974, as amended.
ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement for thirty (30) days’ prior notice has not been waived.
Eligible Assignee . Any of (a) a commercial bank or finance company organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (b) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with GAAP; (c) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having total assets in excess of $1,000,000,000, provided that such bank is acting through a branch or agency located in the United States of America; and (d) if, but only if, any Event of Default has occurred and is continuing, any other bank, insurance company, commercial finance company or other financial institution or other Person approved by the Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Guarantor, the Borrower or any of its Subsidiaries, other than a Multiemployer Plan.
Environmental Laws . See §7.17(a) hereof.
Event of Default . See §13.1.
3
Excluded Taxes . See §5.5 hereof.
GAAP . (a) When used in §10, whether directly or indirectly through reference to a capitalized term used therein, means (i) generally accepted accounting principles in effect in the United States of America for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of the Guarantor or the Borrower, as the case may be, reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with generally accepted accounting principles as in effect in the United States of America from time to time, and (ii) consistently applied with past financial statements of the Guarantor or the Borrower, as the case may be, adopting the same principles; provided, however, that when used directly or indirectly through reference to unaudited annual or interim financial statements, GAAP means principles that are consistent with generally accepted accounting principles in effect in the United States of America from time to time, except that (i) certain information and disclosures normally included in financial statements prepared in accordance with GAAP may have been condensed or omitted from such financial statements, and (ii) unaudited interim financial statements could be subject to year-end adjustments.
Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Guarantor, the Borrower or any of its Subsidiaries or foreign subsidiaries, the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Guarantor . Weider Nutrition International, Inc., a Delaware corporation, the sole shareholder of the Borrower.
Guaranty . That certain Guaranty, dated as of the Effective Date, made by the Guarantor in favor of the Banks and the Agent pursuant to which the Guarantor guarantees to the Banks and the Agent the payment and performance of the Obligations, the form of which shall be satisfactory to the Agent in its sole discretion.
Hazardous Substances . Any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws.
Indebtedness . All obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the obligor’s balance sheet as liabilities, including, without duplication, in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; and (c) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, obligations in respect of interest rate swaps and other interest rate hedging arrangements and the obligations to reimburse the issuer in respect of any letters of credit.
Interest Payment Date . (a) As to any Base Rate Loan, the last day of the calendar quarter in which the Drawdown Date thereof occurs and (b) as to any LIBOR Rate Loan in respect of which the Interest Period is (i) three (3) months or less, the last day of such Interest Period, and
4
(ii) more than three (3) months, the date that is three (3) months from the first day of such Interest Period and, in addition, the last day of such Interest Period.
Interest Period . With respect to each Loan, (a) initially, the period commencing on the Drawdown Date of such Loan and ending on the last day of one of the periods set forth below, as selected by the Borrower in a Loan Request: (i) for any Base Rate Loan, the last day of the calendar quarter, and (ii) for any LIBOR Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Loan and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Conversion Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, that Interest Period shall be extended to the next succeeding LIBOR Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding LIBOR Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in §2.8, the Borrower shall be deemed to have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan and the continuance of all Base Rate Loans as Base Rate Loans on the last day of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any LIBOR Rate Loan that begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last LIBOR Business Day of a calendar month; and
(E) any Interest Period relating to any LIBOR Rate Loan that would otherwise extend beyond the Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan Maturity Date.
Investments . All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.
KeyBank . KeyBank National Association, in its individual capacity.
5
LIBOR Adjusted Rate . For any day with respect to a LIBOR Rate Loan, the rate obtained by dividing (a) the LIBOR Rate for such Interest Period by (b) a percentage equal to 1 minus the stated maximum rate, if any (expressed as a decimal) at which any lender subject thereto would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against “Eurocurrency Liabilities” (as that term is used in Regulation D), if such liabilities were outstanding. The LIBOR Adjusted Rate shall be adjusted automatically on and as of the effective date of any change in the reserve rate under Regulation D.
LIBOR Business Day . Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London or such other eurodollar interbank market as may be selected by the Agent in its sole discretion acting in good faith.
LIBOR Lending Office . Initially, the office of each Bank designated as such in Schedule 1 hereto; thereafter, such other office of such Bank, if any, that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate . For any Interest Period with respect to a LIBOR Rate Loan, the rate of interest equal to (a) the average of the rates per annum (rounded upwards to the nearest whole multiple of 1/16 of one percent per annum, if such rate is not such a multiple) at which KeyBank’s LIBOR Lending Office is offered Dollar deposits two (2) LIBOR Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the eurodollar operations of such LIBOR Lending Office are customarily conducted, for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of the LIBOR Rate Loans to which such Interest Period applies, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable, as defined by the Federal Reserve Board in 12 C.F.R. Part 204 (Regulation D).
LIBOR Rate Loans . All or any portion of the Revolving Credit Loans bearing interest calculated by reference to the LIBOR Rate.
Letter of Credit . See §4.1.1 hereof.
Letter of Credit Application . See §4.1.1 hereof.
Letter of Credit Participation . See §4.1.4 hereof.
Loan Documents . This Credit Agreement, the Note, the Letter of Credit Applications, the Letters of Credit, the Security Documents, any interest rate swap or hedging agreement entered into with any of the Banks in connection herewith, and the other instruments, documents and agreements executed from time to time in connection herewith.
Majority Banks . As of any date on which there is more than one Bank, not less than two (2) Banks holding an aggregate of at least fifty-one percent (51%) of the outstanding principal amount of the Note on such date; and if no such principal is outstanding, not less than two (2) Banks whose aggregate Revolving Credit Commitments constitute at least fifty-one percent (51%) of the sum of the Total Revolving Credit Commitment.
Material Adverse Change . Any change that results in or would reasonably be expected to result in a Material Adverse Effect.
Material Adverse Effect . A material adverse effect on (a) the business, operations, results of operations, assets, liabilities or financial condition of the Guarantor or the Borrower and its Subsidiaries, taken as a whole, as the case may be, or (b) the ability of Guarantor, or the
6
Borrower or its Subsidiaries to perform their obligations under this Credit Agreement or the other Loan Documents to which they are a party.
Maximum Drawing Amount . The maximum aggregate amount from time to time that the beneficiaries may draw under outstanding Letters of Credit. As of the date hereof, the Maximum Drawing Amount is a sum equal to Five Million and No/100 Dollars ($5,000,000).
Maximum Lawful Rate . See §5.10 hereof.
Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Guarantor, the Borrower or any of its Subsidiaries.
Note . The Revolving Credit Note.
Obligations . All indebtedness, obligations and liabilities of the Borrower and its Subsidiaries (joint or several) to any of the Banks and the Agent, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise arising or incurred under this Credit Agreement or any of the other Loan Documents or in respect of any of the Revolving Credit Loans made or Reimbursement Obligations incurred or any of the Note, Letter of Credit Application, Letter of Credit or other instruments at any time evidencing any thereof.
outstanding . With respect to the Revolving Credit Loans, the aggregate unpaid principal thereof as of any date of determination.
PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.
Permitted Acquisition . See §9.5.1.
Permitted Liens . Liens, security interests and other encumbrances permitted by §9.2 hereof.
Person . Any individual, corporation, partnership, trust, unincorporated association, limited liability company, business, or other legal entity, and any government or any governmental agency or political subdivision thereof.
Real Estate . All real property at any time owned or leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries.
Record . The grid attached to a Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Bank with respect to any Revolving Credit Loan referred to in such Note.
Reimbursement Obligations . The obligations of the Borrower to reimburse the Agent and the Banks on account of any drawing under any Letter of Credit as provided in §4.2 hereof.
Rental Obligations . All present or future obligations of the Borrower or any of its Subsidiaries under any rental agreements or leases of real or personal property, other than (a) obligations that can be terminated by the giving of notice without liability to such Borrower or such Subsidiary in excess of the liability for rent due as of the date on which such notice is given and under which no penalty or premium is paid as a result of any such termination, and (b) obligations in respect of Capitalized Leases.
7
Revolving Credit Commitment . With respect to each Bank, the amount set forth on Schedule 1 hereto as the amount of such Bank’s commitment to make Revolving Credit Loans to, and to participate in the issuance, extension and renewal of Letters of Credit for the account of, the Borrower, as the same may be reduced from time to time; or if such commitment is terminated pursuant to the provisions hereof, zero.
Revolving Credit Loan(s) . Revolving credit loans made or to be made by the Banks to the Borrower pursuant to §2 hereof.
Revolving Credit Loan Maturity Date . That date which is the earliest of (a) June 30, 2007, and (b) the date on which the Revolving Credit Commitments of the Banks are terminated pursuant to §13 hereof.
Revolving Credit Loan Request . See §2.7 hereof.
Revolving Credit Note Record . A Record with respect to a Revolving Credit Note.
Revolving Credit Notes . See §2.5 hereof.
Security Documents . The Guaranty, the Stock Pledge Agreement, and any other instruments, documents and agreements executed and delivered to the Agent and the Banks from time to time as security for the Obligations.
Senior Leverage Ratio . See §10.1 hereof.
Stated Rate . (i) With respect to the Revolving Credit Loans, the rate of interest payable pursuant to §2.6 hereof.
Stock Pledge Agreement . The Stock Pledge Agreement, dated as of the Effective Date, from the Guarantor in favor of the Agent, and in form and substance satisfactory to the Banks and the Agent.
Subsidiary . Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through another entity at least a majority (by number of votes) of the outstanding Voting Stock; provided that, where the designated parent is the Borrower or the Guarantor, the term “Subsidiary” shall mean and include only those Subsidiaries incorporated or organized under the laws of any political subdivision of the United States.
Total Leverage Ratio . See §10.2 hereof.
Total Revolving Credit Commitment . The sum of the Revolving Credit Commitments of the Banks, as in effect from time to time. As of the Closing Date, the Total Revolving Credit Commitment is $25,000,000.
Type . As to any Revolving Credit Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
Uniform Customs . With respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto adopted by the Agent in the ordinary course of its business as a letter of credit issuer and in effect at the time of issuance of such Letter of Credit.
8
Unpaid Reimbursement Obligation . Any Reimbursement Obligation for which the Borrower does not reimburse the Agent and the Banks on the date specified in, and in accordance with, §4.2 hereof.
Voting Stock . Stock or similar interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency.
WNG Holdings . See §7.18
1. 2. Rules of Interpretation .
(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such law.
(d) A reference to any Person includes its permitted successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.
(f) The words “include”, “includes” and “including” are not limiting.
(g) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the State of Utah, have the meanings assigned to them therein.
(h) Reference to a particular “§” refers to that section of this Credit Agreement unless otherwise indicated.
(i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.
9
2. THE REVOLVING CREDIT FACILITY .
2. 1. Commitment to Lend . Subject to the terms and conditions set forth in this Credit Agreement, each of the Banks severally agrees to lend to the Borrower and the Borrower may borrow, repay, and reborrow from time to time between the Closing Date and the Revolving Credit Loan Maturity Date upon notice by the Borrower to the Agent given in accordance with §2.7 hereof, such sums as are requested by the Borrower up to a maximum aggregate amount outstanding (after giving effect to all amounts requested) at any one time equal to such Bank’s Revolving Credit Commitment minus such Bank’s Commitment Percentage of the sum of all Drawing Amounts and all Unpaid Reimbursement Obligations, provided that the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus all Drawing Amounts and all Unpaid Reimbursement Obligations shall not at any time exceed the lesser of the Total Revolving Credit Commitment and, if applicable, the Borrowing Base described in §2.11. The Revolving Credit Loans shall be made pro rata in accordance with each Bank’s Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty by the Borrower that the conditions set forth in §§11 and 12, in the case of the initial Loans to be made on the Closing Date, and §12, in the case of all other Revolving Credit Loans, have been satisfied on the date of such request.
2. 2. Fees . The Borrower agrees to pay to the Agent for the accounts of the Banks, unless otherwise specified below, in accordance with their respective Commitment Percentages the following fees:
2. 2. 1. Closing Fee . A one-time closing fee calculated at the rate of one-fifth of one percent (0.20%) of the Total Revolving Credit Commitment, which fee shall be due and payable upon the Closing Date.
2. 2. 2. Administrative Fee . An annual administrative fee in the amount of $15,000 per year, prorated for any partial year, solely for the account of the Agent. Said administrative fee shall be due and payable upon the execution hereof and, thereafter, on each annual anniversary of the Effective Date, excluding the Revolving Credit Loan Maturity Date.
2. 2. 3. Unused Credit Fee . An unused credit fee calculated on an amount equal to the Total Revolving Credit Commitment minus the weighted average sum of all outstanding Revolving Credit Loans and minus all Drawing Amounts at a rate determined as a function of the Borrower’s Total Leverage Ratio, as set forth in the table below. Said unused credit fee shall be due and payable in arrears on a quarterly basis, commencing on September 30, 2004, and on the last day of each December, March, June and September thereafter through and including the Revolving Credit Loan Maturity Date.
2. 2. 4. Syndication Fee . In the event that the Borrower requests and the Banks approve an increase in the Total Revolving Credit Commitment pursuant to §2.4, to an amount exceeding $25,000,000, which increase requires or results in the syndication of all or a part of the increased Total Revolving Credit Commitment, a syndication fee for the purposes of
10
such syndication, the amount of which fee shall be mutually agreed upon, in writing, by the Agent and the Borrower on or before the commencement of such syndication.
2. 3. Reduction of Total Revolving Credit Comm itment . The Borrower shall have the right at any time and from time to time upon three (3) Business Days prior written notice to the Agent to reduce by $5,000,000, or a whole multiple of $1,000,000 in excess thereof, or terminate entirely the Total Revolving Credit Commitment, whereupon the Revolving Credit Commitments of the Banks shall be reduced pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or, as the case may be, terminated. Promptly after receiving any notice of the Borrower delivered pursuant to this §2.3, the Agent will notify the Banks of the substance thereof.
2. 4. Increase of Total Revolving Credit Commitment . The Borrower shall have the right at any time and from time to time upon not less than thirty (30) days prior written notice to the Agent to request that the Total Revolving Credit Commitment be increased by $5,000,000, or a whole multiple of $1,000,000 in excess thereof, up to an aggregate amount of $60,000,000, subject only to credit approval by the Agent and the Banks. Upon credit approval by the Agent and the Banks, the Revolving Credit Commitments of the Banks shall be increased pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or such other amount as may be approved by the Banks. Promptly after receiving any notice of the Borrower delivered pursuant to this §2.4, the Agent will notify the Banks of the substance thereof, and the Banks shall commence promptly the underwriting process.
2. 5. The Revolving Credit Note . The Revolving Credit Loans shall be evidenced by one or more separate promissory notes of the Borrower in substantially the form of Exhibit A hereto (individually and collectively, the “Revolving Credit Note”), dated as of the Effective Date and completed with appropriate insertions. One Revolving Credit Note shall be payable to the order of each Bank in a principal amount equal to such Bank’s Revolving Credit Commitment or, if less, the outstanding amount of all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as set forth below. The Borrower irrevocably authorizes each Bank to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal on such Bank’s Revolving Credit Note, an appropriate notation on such Bank’s Revolving Credit Note Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Revolving Credit Loans set forth on such Bank’s Revolving Credit Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Bank, but the failure to record, or any error in so recording, any such amount on such Bank’s Revolving Credit Note Record shall not limit or otherwise affect the obligations of the Borrower hereunder or under the Revolving Credit Note to make payments of principal of or interest on the Revolving Credit Note when due. Upon receipt of an affidavit of an officer of a Bank as to the loss, theft, destruction, or mutilation of its Revolving Credit Note, the Borrower shall issue, in lieu thereof, a replacement Revolving Credit Note in the same principal amount thereof and of like tenor. Upon any increase in the Total Revolving Credit Commitment pursuant to §2.4, the Borrower shall issue one or more replacement Revolving Credit Notes or allonges to the original Revolving Credit Notes in the aggregate principal amount of such increased Total Revolving Credit Commitment.
2. 6. Interest on Revolving Credit Loans . Except as otherwise provided in §5.9,
(a) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at a rate per annum equal to the Applicable Base Rate Margin, as set forth below, plus the Base Rate.
11
(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at a rate per annum equal to the Applicable LIBOR Rate Margin, as set forth below, plus the LIBOR Rate.
(c) The respective Applicable Base Rate Margin and the Applicable LIBOR Rate Margin shall be determined as a function of the Borrower’s Total Leverage Ratio, as set forth below:
(d) The Borrower promises to pay interest on each Revolving Credit Loan in arrears on each Interest Payment Date with respect thereto.
2. 7. Requests for Revolving Credit Loans . The Borrower shall give to the Agent written notice in the form of Exhibit B hereto (or telephonic notice confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a “Revolving Credit Loan Request”) as of (a) on or before noon, Mountain Standard Time, on the Business Day of the proposed Drawdown Date of any Base Rate Loan and (b) no less than three (3) LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR Rate Loan; provided that, in any calendar year, the Banks shall have no obligation to honor more than twenty-four (24) Revolving Credit Loan Requests hereunder. Each such notice shall specify (i) the principal amount of the Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any such notice, the Agent shall notify each of the Banks thereof. Each Revolving Credit Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Revolving Credit Loan requested from the Banks on the proposed Drawdown Date. Each Revolving Credit Loan Request shall be in a minimum aggregate amount of $500,000 or a whole multiple of $250,000 in excess thereof.
2. 8. Conversion Options .
2. 8. 1. Conversion to Different Type of Revolving Credit Loan . The Borrower may elect from time to time to convert any outstanding Revolving Credit Loan to a Revolving Credit Loan of another Type, provided that (a) with respect to any such conversion, the Borrower shall give the Agent at least three (3) Business Days prior written notice of such election; (b) with respect to any such conversion of a LIBOR Rate Loan into a Base Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto and (c) no Revolving Credit Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing. On the date on which such conversion is being made, each Bank shall take such action as is necessary to transfer its Commitment Percentage of such Revolving Credit Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be. All or any part of the outstanding Revolving Credit Loans of any Type may be converted into a Revolving Credit Loan of another Type as provided herein, provided that any partial conversion shall be in an aggregate principal amount of $500,000 or a whole multiple of
12
$500,000 in excess thereof. Each Conversion Request relating to the conversion of a Revolving Credit Loan to a LIBOR Rate Loan shall be irrevocable by the Borrower.
2. 8. 2. Continuation of LIBOR Rate Loans . Any LIBOR Rate Loan may be continued as a LIBOR Rate Loan upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in §2.8.1; provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default of which officers of the Agent active upon the Borrower’s account have actual knowledge. The Agent shall notify the Banks promptly when any such automatic conversion contemplated by this §2.8.2 is scheduled to occur. If Borrower does not request conversion or continuation of any LIBOR Rate Loan and such LIBOR Rate Loan remains outstanding upon the expiration of the last Interest Period with respect thereto, such LIBOR Rate Loan shall automatically be converted to a Base Rate Loan on the last day of such Interest Period.
2. 8. 3. LIBOR Rate Loans . Any conversion to or from LIBOR Rate Loans shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, (a) the aggregate principal amount of all LIBOR Rate Loans having the same Interest Period shall not be less than $1,000,000 or a whole multiple of $500,000 in excess thereof, and (b) there shall not be more than ten (10) different Interest Periods with respect to LIBOR Rate Loans in effect at any one time.
2. 9. Funds for Revolving Credit Loan .
2. 9. 1. Funding Procedures . Not later than 1:00 p.m. (Salt Lake City time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks will make available to the Agent, at Agent’s Head Office, in immediately available funds, the amount of such Bank’s Commitment Percentage of the amount of the requested Revolving Credit Loans. Upon receipt from each Bank of such amount, and upon receipt of the documents required by §§11 and 12 and the satisfaction of the other conditions set forth therein, to the extent applicable, the Agent will make available to the Borrower the aggregate amount of such Revolving Credit Loans made available to the Agent by the Banks. The failure or refusal of any Bank to make available to the Agent at the aforesaid time and place on any Drawdown Date the amount of its Commitment Percentage of the requested Revolving Credit Loans shall not relieve any other Bank from its several obligation hereunder to make available to the Agent the amount of such other Bank’s Commitment Percentage of any requested Revolving Credit Loans.
2. 9. 2. Advances by Agent . The Agent may, unless notified to the contrary by any Bank prior to a Drawdown Date, assume that such Bank has made available to the Agent on such Drawdown Date the amount of such Bank’s Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown Date, and the Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Bank makes available to the Agent such amount on a date after such Drawdown Date, such Bank shall pay to the Agent on demand an amount equal to the product of (a) the average computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Agent for federal funds acquired by the Agent during each day included in such period, times (b) the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans, times (c) a fraction, the numerator of which is the number of days that elapse from and including such Drawdown Date to the date on which the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans shall become immediately available to the Agent, and the denominator of which is 365. A statement of the Agent submitted to such Bank with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Agent by such Bank. If the amount of such Bank’s
13
Commitment Percentage of such Revolving Credit Loans is not made available to the Agent by such Bank within three (3) Business Days following such Drawdown Date, the Agent shall be entitled to recover such amount from the Borrower on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans made on such Drawdown Date.
2. 10. Repayment of the Revolving Credit Loans .
2. 10. 1. Maturity . The Borrower promises to pay on the Revolving Credit Loan Maturity Date, and there shall become absolutely due and payable on the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans outstanding on such date, together with any and all accrued and unpaid interest thereon and any accrued but unpaid unused credit fee.
2. 10. 2. Extension of Maturity Date . Provided that no Event of Default has occurred and is continuing, and subject to the approval of the Banks and the Agent, which approval shall not be unreasonably withheld, the Borrower may request in writing, delivered to the Agent not less than thirty (30) days prior to the second anniversary of the Effective Date, that the Revolving Credit Maturity Date be extended for one additional year beyond the then effective Revolving Credit Maturity Date. Thereafter, the Borrower may make additional such requests on or prior to each consecutive anniversary of the Effective Date.
2. 10. 3. Mandatory Repayments of Revolving Credit Loans . If at any time the sum of the outstanding amount of the Revolving Credit Loans, all Drawing Amounts and all Unpaid Reimbursement Obligations exceeds the Total Revolving Credit Commitment, then the Borrower shall immediately pay the amount of such excess to the Agent for the respective accounts of the Banks for application: first , to any Unpaid Reimbursement Obligations; second , to the Revolving Credit Loans; and third , to provide to the Agent cash collateral for Reimbursement Obligations as contemplated by §4.2(b) and (c) hereof. Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving Credit Loans shall be allocated among the Banks, in proportion, as nearly as practicable, to each Reimbursement Obligation or (as the case may be) the respective unpaid principal amount of each Bank’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior payments or repayments not exactly in proportion.
2. 10. 4. Optional Repayments of Revolving Credit Loans . The Borrower shall have the right, at their election, to repay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium, provided that, except as otherwise permitted in this §2.10.4, any full or partial prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this §2.10.4 may be made only on the last day of the Interest Period relating thereto. The Borrower shall give the Agent, no later than 12:00 noon (Salt Lake City time) at least one (1) Business Day prior written notice of any proposed prepayment pursuant to this §2.10.4 of Base Rate Loans, and one (1) LIBOR Business Day notice of any proposed prepayment pursuant to this §2.10.4 of LIBOR Rate Loans, in each case specifying the proposed date of prepayment of Revolving Credit Loans and the principal amount to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall be in an integral multiple of $100,000, shall be accompanied by the payment of accrued interest on the principal prepaid to the date of prepayment, and, if such prepayment is of a LIBOR Rate Loan and is made on a date other than the last day of the Interest Period relating thereto, such prepayment shall be further accompanied by indemnification payments pursuant to §5.8 hereof, and shall be applied, in the absence of instruction by the Borrower, first , to the principal of Base Rate Loans and then to the principal of LIBOR Rate Loans. Each partial prepayment shall be allocated amongst the Banks, in proportion, as nearly as practicable, to the respective unpaid principal amount of each Bank’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior repayments not exactly in proportion.
14
2. 11. Borrowing Base . The term “Borrowing Base” means an amount equal to the sum of (a) eighty five percent (85%) of the value of all Eligible Accounts (as defined below), plus (b) sixty five percent (65%) of all Eligible Inventory (as defined below). Provided that, if the Borrower’s Senior Leverage Ratio is less than 1.75:1.00 and the Borrower’s ratio of current assets to current liabilities is greater than 1.50:1.00, the Revolving Credit Loans and Letters of Credit to be issued hereunder shall not be subject to any Borrowing Base. In the event that Borrower fails to maintain at any time one or both of such ratios, then, as set forth in §2.1, the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus all Drawing Amounts and all Unpaid Reimbursement Obligations shall not at any time exceed the lesser of the Total Revolving Credit Commitment and the Borrowing Base.
2. 11. 1 Eligible Accounts . For purposes of this Credit Agreement, the term “Accounts” means all of the Borrower’s and its Subsidiaries’ trade accounts, accounts receivable, other receivables, or rights to payment for goods or services owing to the Borrower or its Subsidiaries; the term “Eligible Accounts” means all of the Borrower’s and its Subsidiaries’ Accounts which contain selling terms and conditions reasonably acceptable to the Agent; and the term “Account Debtor” means any Person obligated on an Account. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits, and offsets of any nature. Unless otherwise agreed to by the Agent in writing, Eligible Accounts do not include:
(a) Accounts with respect to which the Account Debtor is an employee or agent of the Borrower.
(b) Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors.
(c) Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional.
(d) Accounts with respect to which the Account Debtor is not a resident of the United States, except (i) to the extent such Accounts are supported by letters of credit, insurance, bonds or other assurances satisfactory to the Agent, or (ii) to the extent that the Account Debtor on such Accounts is an affiliate of Wal-Mart Stores, Inc., or Costco Wholesale Corporation.
(e) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services previously rendered by the Account Debtor to the Borrower; provided, however, that any Account deemed ineligible pursuant to this clause (e) shall only be ineligible to the extent of such liability, and the remainder shall constitute an Eligible Account.
(f) Accounts which are subject to dispute, counterclaim, or setoff.
(g) Accounts with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor.
(h) Accounts with respect to which the Agent, in its sole discretion acting in good faith after reasonable inquiry, deems the creditworthiness of financial condition of the Account Debtor to be unsatisfactory.
(i) Accounts of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or
15
federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due.
(j) Accounts with respect to which the Account Debtor is the United States government or any department or agency of the United States.
(k) Accounts which have not been paid in full within ninety (90) days from the invoice date. The entire balance of any Account of any single Account Debtor will be ineligible whenever the portion of the Account which has not been paid within 90 days from the invoice date is in excess of fifty percent (50%) of the total amount outstanding on the Account.
(l) That portion of the Accounts of any single Account Debtor which exceeds fifteen percent (15%) of all of the Borrower’s Accounts provided that, the foregoing concentration limit shall not apply to Account Debtors Wal-Mart Stores, Inc., and Costco Wholesale Corporation or any of their respective affiliates.
(m) That portion of the Accounts of any single Account Debtor that is subject to retainage;
2. 11. 2 Eligible Inventory . For purposes of this Agreement, the term “Eligible Inventory” means all of the Borrower’s raw materials, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which the Borrower has or hereafter acquires any right, whether held by the Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing, except:
(a) Inventory which is not owned by the Borrower free and clear of all security interest, liens, encumbrances, and claims of third parties, other than inventory in which the Agent, for the ratable benefit of the Banks, holds a valid and perfected first priority lien.
(b) Inventory which the Agent, in its sole discretion acting in good faith after reasonable inquiry, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing.
(c) Work in process.
(d) Inventory which is held or maintained outside of the United States.
4. LETTERS OF CREDIT .
4. 1. Letter of Credit Commitments .
4. 1. 1. Commitment to Issue Letters of Credit . Subject to the terms and conditions hereof and the execution and delivery by the Borrower of a letter of credit application on the Agent’s customary form (a “Letter of Credit Application”), the Agent on behalf of the Banks and in reliance upon the agreement of the Banks set forth in §4.1.4 and upon the
16
representations and warranties of the Borrower contained herein, agrees, in its individual capacity, to issue, extend and renew for the account of the Borrower one or more standby or documentary letters of credit (individually, a “Letter of Credit”), in such form as may be requested from time to time by the Borrower and agreed to by the Agent; provided , however , that, after giving effect to such request, the sum of (A) all Drawing Amounts on all Letters of Credit plus and Unpaid Reimbursement Amounts shall not exceed the Maximum Drawing Amount, and (B) (i) all Drawing Amounts on all Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii) the amount of all Revolving Credit Loans outstanding shall not exceed the Total Revolving Credit Commitment. Notwithstanding the foregoing, the Agent shall have no obligation to issue any Letter of Credit to support or secure any Indebtedness of the Borrower or any of its Subsidiaries to the extent that such Indebtedness was incurred prior to the proposed issuance date of such Letter of Credit, unless in any such case the Borrower demonstrates to the reasonable satisfaction of the Agent that (A) such prior incurred Indebtedness was then fully secured by a prior perfected and unavoidable security interest in collateral provided by the Borrower or such Subsidiary to the proposed beneficiary of such Letter of Credit or (B) such prior incurred Indebtedness was then secured or supported by a letter of credit issued for the account of the Borrower or such Subsidiary and the reimbursement obligation with respect to such letter of credit was fully secured by a prior perfected and unavoidable security interest in collateral provided to the issuer of such letter of credit by the Borrower or such Subsidiary.
4. 1. 2. Letter of Credit Applications . Each Letter of Credit Application shall be completed to the satisfaction of the Agent. In the event that any provision of any Letter of Credit Application shall be inconsistent with any provision of this Credit Agreement, then the provisions of this Credit Agreement shall, to the extent of any such inconsistency, govern.
4. 1. 3. Terms of Letters of Credit . Each Letter of Credit issued, extended or renewed hereunder shall, among other things, (a) provide for the payment of sight drafts for honor thereunder when presented in accordance with the terms thereof and when accompanied by the documents described therein, and (b) have an expiry date no later than the date which is the earlier of (i) one (1) year from the date of issuance, extension or renewal thereof and (ii) fourteen (14) days (or, if the beneficiary is located outside of the United States of America, forty-five (45) days) prior to the Revolving Credit Loan Maturity Date. Each Letter of Credit so issued, extended or renewed shall be subject to the Uniform Customs.
4. 1. 4. Reimbursement Obligations of Banks . Each Bank severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Bank’s Commitment Percentage, to reimburse the Agent on demand for the amount of each draft paid by the Agent under each Letter of Credit to the extent that such amount is not reimbursed by the Borrower pursuant to §4.2 (such agreement by a Bank being called herein the “Letter of Credit Participation” of such Bank).
4. 1. 5. Participations of Banks . Each such payment made by a Bank shall be treated as the purchase by such Bank of a participating interest in the Borrower’s Reimbursement Obligation under §4.2 in an amount equal to such payment. Each Bank shall share in accordance with its participating interest in any interest which accrues pursuant to §4.2.
4. 2. Reimbursement Obligations of the Borrower . In order to induce the Agent to issue, extend and renew each Letter of Credit and the Banks to participate therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the account of the Agent or (as the case may be) the Banks, with respect to each Letter of Credit issued, extended or renewed by the Agent hereunder,
17
(a) except as otherwise expressly provided in §4.2(b) and (c), on each date that any draft presented under such Letter of Credit is honored by the Agent in compliance with §4.3, or the Agent otherwise makes a payment with respect thereto, (i) the amount paid by the Agent under or with respect to such Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs and expenses whatsoever incurred by the Agent or any Bank in connection with any payment made by the Agent or any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total Revolving Credit Commitment to an amount less than all Drawing Amounts on all Letters of Credit, an amount equal to such difference, which amount shall be held by the Agent for the benefit of the Banks and the Agent as cash collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Revolving Credit Commitment, or the acceleration of the Reimbursement Obligations with respect to all Letters of Credit in accordance with §13, an amount equal to all Drawing Amounts on all Letters of Credit, which amount shall be held by the Agent for the benefit of the Banks and the Agent as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent’s Head Office in immediately available funds. Interest on any and all amounts remaining unpaid by the Borrower under this §4.2 at any time from the date such amounts become due and payable (whether as stated in this §4.2, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Agent on demand at the rate specified in §5.9 for overdue principal on the Revolving Credit Loans.
4. 3. Letter of Credit Payments . If any draft shall be presented or other demand for payment shall be made under any Letter of Credit, the Agent shall notify the Borrower of the date and amount of the draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment. If the Borrower fails to reimburse the Agent as provided in §4.2 on or before the date that such draft is paid or other payment is made by the Agent, the Agent may at any time thereafter notify the Banks of the amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Salt Lake City time) on the Business Day next following the receipt of such notice, each Bank shall make available to the Agent, at its Head Office, in immediately available funds, such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation, together with an amount equal to the product of (a) the average, computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Agent for federal funds acquired by the Agent during each day included in such period, times (b) the amount equal to such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of which is the number of days that elapse from and including the date the Agent paid the draft presented for honor or otherwise made payment to the date on which such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation shall become immediately available to the Agent, and the denominator of which is 365. The responsibility of the Agent to the Borrower and the Banks shall be only to determine that the documents (including each draft) delivered under each Letter of Credit in connection with such presentment shall be in conformity in all material respects with such Letter of Credit.
4. 4. Obligations Absolute . The Borrower’s obligations under this §4 shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Agent, any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees with the Agent and the Banks that the Agent and the Banks shall not be responsible for, and the
18
Borrower’s Reimbursement Obligations under §4.2 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, the beneficiary of any Letter of Credit or any financing institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrower against the beneficiary of any Letter of Credit or any such transferee. The Agent and the Banks shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit. The Borrower agrees that any action taken or omitted by the Agent or any Bank under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith and in compliance with §4.3, shall be binding upon the Borrower and shall not result in any liability on the part of the Agent or any Bank to the Borrower.
4. 5. Reliance by Issuer . To the extent not inconsistent with the foregoing §4.4, the Agent shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Majority Banks as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Majority Banks, and such request and any action taken or failed to be taken pursuant thereto shall be binding upon the Banks and all future holders of the Revolving Credit Notes or of a Letter of Credit Participation.
4. 6. Letter of Credit Fee . The Borrower shall, on the date of issuance or any extension or renewal of any Letter of Credit and at such other time or times as such fees are customarily charged by the Agent, pay a fee (in each case, a “Letter of Credit Fee”) to the Agent as follows:
(a) In respect of each standby Letter of Credit issued, extended or renewed hereunder such Letter of Credit Fee shall be equal to the then-effective Applicable LIBOR Rate Margin per annum of the Drawing Amount of such standby Letter of Credit and shall be for the pro - rata accounts of the Banks in accordance with their respective Commitment Percentages;
(b) In respect of each documentary Letter of Credit issued, extended or renewed hereunder such Letter of Credit Fee shall be equal to one and one half percent (1.5%) per annum of the Drawing Amount of such documentary Letter of Credit and shall be for the pro - rata accounts of the Banks in accordance with their respective Commitment Percentages; and
(c) Further, the Borrower agrees to pay to the Agent for its own account in respect of each Letter of Credit issued, extended or renewed hereunder, the Agent’s standard issuance, amendment, negotiation, document examination and other customary fees as in effect from time to time.
19
5. CERTAIN GENERAL PROVISIONS .
5. 1. Funds for Payments .
5. 1. 1. Payments to Agent . All payments of principal, interest, Reimbursement Obligations, fees, Letter of Credit Fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Banks and the Agent, at the Agent’s Head Office or at such other location that the Agent may from time to time designate, in each case in immediately available funds.
5. 1. 2. No Offset, etc. All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrower will pay to the Agent, for the account of the Banks or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Banks or the Agent to receive the same net amount which the Banks or the Agent would have received on such due date had no such obligation been imposed upon the Borrower. The Borrower will deliver promptly to the Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document.
5. 2. Computations . All computations of interest on the Revolving Credit Loans and unused credit fees, Letter of Credit Fees, and all other fees due hereunder shall , unless otherwise expressly provided herein, be based on a 360-day year and paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The outstanding amount of the Revolving Credit Loans as reflected on the Note Records from time to time shall be considered correct and binding, absent manifest error, on the Borrower unless within thirty (30) Business Days after receipt by the Chief Financial Officer of the Borrower of any written notice by the Agent or any of the Banks of such outstanding amount, (a) the Agent or such Bank shall notify the Borrower to the contrary, or (b) the Borrower shall reasonably object, in writing to the Agent, to such amount.
5. 3. Inability to Determine LIBOR Rate . In the event, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent, acting in good faith after reasonable inquiry, shall determine that adequate and reasonable methods do not exist for ascertaining the LIBOR Rate that would otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan during any Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Banks) to the Borrower and the Banks. In such event (a) any Revolving Credit Loan Request or Conversion Request with respect to any LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period relating thereto, become a Base Rate Loan, and (c) the obligations of the Banks to make LIBOR Rate Loans shall be suspended until the Agent reasonably determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrower and the Banks.
20
5. 4. Illegality . Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Bank to make or maintain LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to the Borrower and the other Banks and thereupon (a) the commitment of such Bank to make LIBOR Rate Loans or convert Revolving Credit Loans of another Type to LIBOR Rate Loans shall forthwith be suspended and (b) such Bank’s Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law.
5. 5. Additional Costs, etc . If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Bank or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholdings of any nature with respect to this Credit Agreement, the other Loan Documents, any Letters of Credit, such Bank’s Revolving Credit Commitment or the Revolving Credit Loans (other than taxes based upon or measured with reference to the net income or profits of such Bank or the Agent (hereinafter, “Excluded Taxes”)), or
(b) materially change the basis of taxation (except for changes in Excluded Taxes) of payments to any Bank of the principal of or the interest on any Revolving Credit Loans or any other amounts payable to any Bank or the Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Credit Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or letters of credit issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or requirements with respect to this Credit Agreement, the other Loan Documents, any Letters of Credit, the Revolving Credit Loans, such Bank’s Revolving Credit Commitment, or any class of loans, letters of credit or commitments of which any of the Revolving Credit Loans or such Bank’s Revolving Credit Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing, renewing, extending or maintaining any of the Revolving Credit Loans or such Bank’s Revolving Credit Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement Obligation or other amount payable to such Bank or the Agent hereunder on account of such Bank’s Revolving Credit Commitment, any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or to forego any interest or Reimbursement Obligation or other sum payable hereunder, the amount of which payment or foregone interest or Reimbursement Obligation
21
or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Bank or the Agent such additional amounts as will be sufficient to compensate such Bank or the Agent for such additional cost, reduction, payment or foregone interest or Reimbursement Obligation or other sum.
5. 6. Capital Adequacy . If after the date hereof any Bank or the Agent determines that (a) the adoption of or change in any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by a court or governmental authority with appropriate jurisdiction, or (b) compliance by such Bank or the Agent or any corporation controlling such Bank or the Agent with any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) of any such entity regarding capital adequacy, has the effect of reducing the return on such Bank’s or the Agent’s commitment with respect to any Revolving Credit Loans to a level below that which such Bank or the Agent could have achieved but for such adoption, change or compliance (taking into consideration such Bank’s or the Agent’s then existing policies with respect to capital adequacy and assuming full utilization of such entity’s capital) by any amount reasonably deemed by such Bank or (as the case may be) the Agent to be material, then such Bank or the Agent may notify the Borrower of such fact. To the extent that the amount of such reduction in the return on capital is not reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt to negotiate in good faith, within thirty (30) days of the day on which the Borrower receives such notice, an adjustment payable hereunder that will adequately compensate such Bank in light of these circumstances. If the Borrower and such Bank are unable to agree to such adjustment within thirty (30) days of the date on which the Borrower receives such notice, then commencing on the date of such notice (but not earlier than the effective date of any such increased capital requirement), the fees payable hereunder shall increase by an amount that will, in such Bank’s reasonable determination, provide adequate compensation. Each Bank shall allocate such cost increases among its customers in good faith and on an equitable basis.
5. 7. Certificate . A certificate setting forth any additional amounts payable pursuant to §§5.5 or 5.6 and a brief explanation of such amounts which are due, submitted by any Bank or the Agent to the Borrower, shall be conclusive, absent manifest error, that such amounts are due and owing.
5. 8. Indemnity . The Borrower agrees to indemnify each Bank and to hold each Bank harmless from and against any loss, cost or expense (including loss of anticipated profits) that such Bank may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or any interest on any LIBOR Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by such Bank to lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the Borrower in making a borrowing or conversion after the Borrower has given (or is deemed to have given) a Revolving Credit Loan Request or a Conversion Request relating thereto in accordance with §§2.7 or 2.8, hereof or (c) the making of any payment of a LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by such Bank to lenders of funds obtained by it in order to maintain any such Loans.
22
5. 9. Interest After Default .
5. 9. 1. Overdue Amounts . Overdue principal and (to the extent permitted by applicable law) interest on the Revolving Credit Loans and all other overdue amounts payable hereunder or under any of the other Loan Documents shall bear interest compounded monthly and payable on demand at a rate per annum equal to two percent (2%) above the Stated Rate until such amount shall be paid in full (after as well as before any judgment).
5. 9. 2. Amounts Not Overdue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
