Exhibit
10.7
REVOLVING
CREDIT
AND
SECURITY
AGREEMENT
PNC BANK, NATIONAL
ASSOCIATION
(AS LENDER AND AS
AGENT)
WITH
GREEN PLAINS TRADE
GROUP LLC
AND
the other Persons
joined as borrowers from time to time
(BORROWERS)
July 30,
2009
TABLE OF
CONTENTS
Page
I.
DEFINITIONS.
1
1.1.
Accounting
Terms
1
1.2.
General Terms
1
1.3.
Uniform Commercial Code
Terms
14
1.4.
Certain Matters of
Construction
15
II.
ADVANCES,
PAYMENTS.
15
2.1.
Revolving
Advances.
15
2.2.
Procedure for Revolving
Advances Borrowing.
16
2.3.
Disbursement of Advance
Proceeds
17
2.4.
Reserved.
17
2.5.
Maximum
Advances
17
2.6.
Repayment of
Advances.
17
2.7.
Repayment of Excess
Advances
18
2.8.
Statement of
Account
18
2.9.
Letters of
Credit
18
2.10.
Issuance of Letters of
Credit.
18
2.11.
Requirements For
Issuance of Letters of Credit.
19
2.12.
Disbursements,
Reimbursement.
20
2.13.
Repayment of
Participation Advances.
20
2.14.
Documentation
21
2.15.
Determination to Honor
Drawing Request
21
2.16.
Nature of Participation
and Reimbursement Obligations
21
2.17.
Indemnity
22
2.18.
Liability for Acts and
Omissions
22
2.19.
Additional
Payments
23
2.20.
Manner of Borrowing and
Payment.
23
2.21.
Mandatory
Prepayments
24
2.22.
Use of
Proceeds.
24
2.23.
Defaulting
Lender.
24
III.
INTEREST AND
FEES.
25
3.1.
Interest
25
3.2.
Letter of Credit
Fees.
25
3.3.
Closing Fee and Facility
Fee.
25
3.4.
Collateral Evaluation
Fee and Collateral Monitoring Fee.
26
3.5.
Computation of Interest
and Fees
26
3.6.
Maximum
Charges
26
3.7.
Increased
Costs
26
3.8.
Basis For Determining
Interest Rate Inadequate or Unfair
27
3.9.
Capital
Adequacy.
27
3.10.
Gross Up for
Taxes
28
3.11.
Withholding Tax
Exemption.
28
IV.
COLLATERAL: GENERAL
TERMS
28
4.1.
Security Interest in the
Collateral
28
4.2.
Perfection of Security
Interest
29
4.3.
Disposition of
Collateral
29
4.4.
Preservation of
Collateral
29
4.5.
Ownership of
Collateral.
29
4.6.
Defense of Agent’s
and Lenders’ Interests
30
4.7.
Books and
Records
30
4.8.
Financial
Disclosure
30
4.9.
Compliance with
Laws
30
4.10.
Inspection of
Premises
30
4.11.
Insurance
31
4.12.
Failure to Pay
Insurance
31
4.13.
Payment of
Taxes
31
4.14.
Payment of Leasehold
Obligations
31
i
4.15.
Receivables.
31
4.16.
Inventory
33
4.17.
Maintenance of
Equipment
33
4.18.
Exculpation of
Liability
33
4.19.
Environmental
Matters.
33
4.20.
Financing
Statements
34
V.
REPRESENTATIONS AND
WARRANTIES.
35
5.1.
Authority
35
5.2.
Formation and
Qualification.
35
5.3.
Survival of
Representations and Warranties
35
5.4.
Tax Returns
35
5.5.
Financial
Statements.
35
5.6.
Entity Names
36
5.7.
O.S.H.A. and
Environmental Compliance.
36
5.8.
Solvency; No Litigation,
Violation, Indebtedness or Default; ERISA Compliance.
36
5.9.
Patents, Trademarks,
Copyrights and Licenses
37
5.10.
Licenses and
Permits
37
5.11.
Default of
Indebtedness
37
5.12.
No Default
38
5.13.
No Burdensome
Restrictions
38
5.14.
No Labor
Disputes
38
5.15.
Margin
Regulations
38
5.16.
Investment Company
Act
38
5.17.
Disclosure
38
5.18.
Reserved.
38
5.19.
Swaps
38
5.20.
Conflicting
Agreements
38
5.21.
Application of Certain
Laws and Regulations
38
5.22.
Business and Property of
Borrowers
38
5.23.
Section 20
Subsidiaries
38
5.24.
Anti-Terrorism
Laws.
38
5.25.
Trading with the
Enemy
39
5.26.
Federal Securities
Laws
39
5.27.
Equity
Interests.
39
VI.
AFFIRMATIVE
COVENANTS.
39
6.1.
Payment of
Fees
39
6.2.
Conduct of Business and
Maintenance of Existence and Assets
40
6.3.
Violations
40
6.4.
Government
Receivables
40
6.5.
Financial
Covenants.
40
6.6.
Execution of
Supplemental Instruments
40
6.7.
Payment of
Indebtedness
40
6.8.
Standards of Financial
Statements
40
6.9.
Federal Securities
Laws
40
6.10.
Change in
Management
40
VII.
NEGATIVE
COVENANTS.
41
7.1.
Merger, Consolidation,
Acquisition and Sale of Assets.
41
7.2.
Creation of
Liens
41
7.3.
Guarantees
41
7.4.
Investments
41
7.5.
Loans
41
7.6.
Capital
Expenditures
41
7.7.
Distributions
41
7.8.
Indebtedness
42
7.9.
Nature of
Business
42
7.10.
Transactions with
Affiliates
42
7.11.
Leases
42
7.12.
Subsidiaries.
42
7.13.
Fiscal Year and
Accounting Changes
42
7.14.
Pledge of
Credit
42
ii
7.15.
Amendment of Certificate
of Formation, Operating Agreement
42
7.16.
Compliance with
ERISA
43
7.17.
Prepayment of
Indebtedness
43
7.18.
Anti-Terrorism
Laws
43
7.19.
Membership/Partnership
Interests
43
7.20.
Trading with the Enemy
Act
43
7.21.
Affiliate
Contracts
43
7.22.
Subordinated
Note
43
7.23.
Other
Agreements
43
VIII.
CONDITIONS
PRECEDENT.
43
8.1.
Conditions to Initial
Advances
43
8.2.
Conditions to Each
Advance
46
IX.
INFORMATION AS TO
BORROWERS.
46
9.1.
Disclosure of Material
Matters
46
9.2.
Schedules
47
9.3.
Environmental
Reports
47
9.4.
Litigation
47
9.5.
Material
Occurrences
47
9.6.
Government
Receivables
47
9.7.
Annual Financial
Statements
47
9.8.
Quarterly Financial
Statements
47
9.9.
Monthly Financial
Statements
48
9.10.
Other Reports
48
9.11.
Additional
Information
48
9.12.
Projected Operating
Budget
48
9.13.
Variances From Operating
Budget
48
9.14.
Notice of Suits, Adverse
Events
48
9.15.
ERISA Notices and
Requests
48
9.16.
Additional
Documents
49
X.
EVENTS OF
DEFAULT.
49
10.1.
Nonpayment
49
10.2.
Breach of
Representation
49
10.3.
Financial
Information
49
10.4.
Judicial
Actions
49
10.5.
Noncompliance
49
10.6.
Judgments
49
10.7.
Bankruptcy
49
10.8.
Inability to
Pay
49
10.9.
Subsidiary
Bankruptcy
49
10.10.
Material Adverse Effect.
The occurrence of any Material Adverse Effect;
49
10.11.
Lien Priority
50
10.12.
Guarantor Cross
Default
50
10.13.
Cross Default
50
10.14.
Breach of
Guaranty
50
10.15.
Change of
Ownership
50
10.16.
Invalidity
50
10.17.
Licenses
50
10.18.
Seizures
50
10.19.
Operations
50
10.20.
Pension Plans
50
10.21.
Breach of
Guaranty
50
10.22.
Subordinated Loan
Default
50
XI.
LENDERS’ RIGHTS
AND REMEDIES AFTER DEFAULT.
51
11.1.
Rights and
Remedies.
51
11.2.
Agent’s
Discretion
52
11.3.
Setoff
52
11.4.
Rights and Remedies not
Exclusive
52
11.5.
Allocation of Payments
After Event of Default
52
XII.
WAIVERS AND JUDICIAL
PROCEEDINGS.
52
12.1.
Waiver of
Notice
52
iii
12.2.
Delay
52
12.3.
Jury Waiver
53
XIII.
EFFECTIVE DATE AND
TERMINATION.
53
13.1.
Term
53
13.2.
Termination
53
XIV.
REGARDING
AGENT.
53
14.1.
Appointment
53
14.2.
Nature of
Duties
54
14.3.
Lack of Reliance on
Agent and Resignation
54
14.4.
Certain Rights of
Agent
54
14.5.
Reliance
54
14.6.
Notice of
Default
54
14.7.
Indemnification
55
14.8.
Agent in its Individual
Capacity
55
14.9.
Delivery of
Documents
55
14.10.
Borrowers’
Undertaking to Agent
55
14.11.
No Reliance on
Agent’s Customer Identification Program
55
14.12.
Other
Agreements
55
XV.
BORROWING
AGENCY.
55
15.1.
Borrowing Agency
Provisions.
55
15.2.
Waiver of
Subrogation
56
XVI.
MISCELLANEOUS.
56
16.1.
Governing Law
56
16.2.
Entire
Understanding.
56
16.3.
Successors and Assigns;
Participations; New Lenders.
58
16.4.
Application of
Payments
59
16.5.
Indemnity
60
16.6.
Notice
60
16.7.
Survival
61
16.8.
Severability
61
16.9.
Expenses
61
16.10.
Injunctive
Relief
62
16.11.
Consequential
Damages
62
16.12.
Captions
62
16.13.
Counterparts; Facsimile
Signatures
62
16.14.
Construction
62
16.15.
Confidentiality; Sharing
Information
62
16.16.
Publicity
62
16.17.
Certifications From
Banks and Participants; USA PATRIOT Act
62
iv
LIST OF EXHIBITS AND
SCHEDULES
Exhibits
Exhibit 1.2
Borrowing Base
Certificate
Exhibit 1.3
Compliance
Certificate
Exhibit 1.4
Form of Subordination
Agreement
Exhibit
2.1(a)
Revolving Credit
Note
Exhibit
5.5(b)
Financial
Projections
Exhibit
8.1(k)
Financial Condition
Certificate
Exhibit 16.3
Commitment Transfer
Supplement
Schedules
Schedule 1.2
Permitted
Encumbrances
Schedule 4.5
Equipment and Inventory
Locations
Schedule
4.15(h)
Deposit and Investment
Accounts
Schedule 4.19
Real Property
Schedule 5.1
Consents
Schedule
5.2(a)
States of Qualification
and Good Standing
Schedule
5.2(b)
Subsidiaries
Schedule 5.4
Federal Tax
Identification Number
Schedule 5.6
Prior Names
Schedule 5.7
Environmental
Schedule
5.8(b)
Litigation
Schedule
5.8(d)
Plans
Schedule 5.9
Intellectual Property,
Source Code Escrow Agreements
Schedule 5.10
Licenses and
Permits
Schedule 5.14
Labor
Disputes
Schedule 5.27
Equity
Interests
Schedule 7.10
Transaction with
Affiliates
v
REVOLVING
CREDIT
AND
SECURITY
AGREEMENT
Revolving Credit and
Security Agreement dated as of July 30, 2009 among Green Plains
Trade Group LLC, a limited liability company formed under the laws
of the State of Delaware (“GTRADE”), and each Person
joined as a Borrower from time to time (each a
“Borrower”, and collectively “Borrowers”),
the financial institutions which are now or which hereafter become
a party hereto (collectively, the “Lenders” and each
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 Other Documents 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, 2008.
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.
“ Advances
” shall mean and include the Revolving Advances and Letters
of Credit.
“
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, managing member, general partner 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 Equity Interests having
ordinary voting power for the election of directors of such Person
or other Persons performing similar functions for any such Person,
or (y) to direct or cause the direction of the management and
policies of such Person whether by ownership of Equity Interests,
contract or otherwise.
“ Affiliate
Contracts ” shall mean those certain ethanol marketing
agreements and distillers grain marketing agreements by and among
each Affiliate Plant and Borrowers, or any of them, and each
agreement individually referred to as an “Affiliate
Contract”.
“ Affiliate
Plants ” shall mean, collectively, Green Plains Bluffton
LLC, Green Plains Obion LLC, Green Plains Shenandoah LLC, Green
Plains Superior LLC, Green Plains Ord LLC and Green Plains Central
City LLC and each individually referred to as an “Affiliate
Plant”.
“ Agent
” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.
“
Agreement ” shall mean this Revolving Credit and
Security Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“ 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,
(ii) the Federal Funds Open Rate in effect on such day plus one
half of one-percent (1/2 of 1%), and (iii) the sum of the Daily
LIBOR Rate in effect on such day plus one percent (1.0%), so long
as a Daily LIBOR Rate is offered, ascertainable and not
unlawful.
“
Anti-Terrorism Laws ” shall mean any Applicable Laws
relating to terrorism or money laundering, including Executive
Order No. 13224, the USA PATRIOT Act, the Applicable Laws
comprising or implementing the Bank Secrecy Act, and the Applicable
Laws administered by the United States Treasury Department’s
Office of Foreign Asset Control (as any of the foregoing Applicable
Laws may from time to time be amended, renewed, extended, or
replaced).
1
“ 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.
“ Argos
Receivable ” shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising from the sale of
ethanol to a Customer in tank transfer, with invoice shipping terms
as in tank transfer or “ITT.”
“
Authority ” shall have the meaning set forth in
Section 4.19(d).
“ 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 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
Account Bank ” shall have the meaning set forth in
Section 4.15(h).
“ Blocked
Person ” shall have the meaning set forth in Section
5.24(b) hereof.
“ 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.
“ Borrowers on
a Consolidated Basis ” shall mean the consolidation in
accordance with GAAP of the accounts or other items of the
Borrowers and their respective Subsidiaries.
“
Borrowers’ Account ” shall have the meaning set
forth in Section 2.8.
“ Borrowing
Agent ” shall mean GTRADE.
“ Borrowing
Base Certificate ” shall mean a certificate in
substantially the form of Exhibit 1.2 duly executed by the
President, Chief Financial Officer, Treasurer or Controller of the
Borrowing Agent and delivered to the Agent, appropriately
completed, by which such officer shall certify to Agent the Formula
Amount and calculation thereof as of the date of such
certificate.
“ 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.
“ Capital
Expenditures ” shall mean expenditures made or
liabilities incurred for the acquisition of any fixed assets or
improvements, replacements, substitutions or additions thereto
which have a useful life of more than one year, including the total
principal portion of Capitalized Lease Obligations, which, in
accordance with GAAP, would be classified as capital
expenditures.
“ Capitalized
Lease Obligation ” shall mean any Indebtedness of any
Borrower represented by obligations under a lease that is required
to be capitalized for financial reporting purposes in accordance
with GAAP.
“ CERCLA
” shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.
§§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 Equity Interests having ordinary voting
power for the election of directors (or the individuals performing
similar functions) of any Borrower or (y) to direct or cause the
direction of the management and policies of any Borrower by
contract or otherwise.
2
“ Change of
Ownership ” shall mean (a) 100% or more of the Equity
Interests of any Borrower is no longer owned or controlled by
(including for the purposes of the calculation of percentage
ownership, any Equity Interests into which any Equity Interests of
any Borrower held by any of the Original Owners are convertible or
for which any such Equity Interests of any Borrower or of any other
Person may be exchanged and any Equity 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 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 the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the
Collateral, any Borrower or any of its Affiliates.
“ Closing
Date ” shall mean July 30, 2009 or such other date as may
be agreed to by the parties hereto.
“ Code
” shall mean the Internal Revenue Code of 1986, as the same
may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
“
Collateral ” shall mean and include:
(a)
all
Receivables;
(b)
all
Equipment;
(c)
all General
Intangibles;
(d)
all
Inventory;
(e)
all Investment
Property;
(f)
all Subsidiary
Stock;
(g)
all of each
Borrower’s right, title and interest in and to, whether now
owned or hereafter acquired and wherever located; (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 the Obligations; (v) all of each
Borrower’s 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; (viii) all letter of credit
rights (whether or not the respective letter of credit is evidenced
by a writing); (ix) all supporting obligations; and (x) 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;
(h)
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), (f) or (g) of this paragraph;
and
(i)
all proceeds and
products of (a), (b), (c), (d), (e), (f), (g), and (h) 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(c) or (d) hereof.
3
“ 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.
“ Compliance
Certificate ” shall mean a compliance certificate, in the
form of Exhibit 1.3 attached hereto, to be signed by the Chief
Financial Officer, Treasurer or Controller of Borrowing Agent,
which shall state that, based on an examination sufficient to
permit such officer to make an informed statement, no Default or
Event of Default exists, or if such is not the case, specifying
such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Borrowers
with respect to such default and, such certificate shall have
appended thereto calculations which set forth Borrowers’
compliance with the requirements or restrictions imposed by
Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11.
“ Consents
” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of
Governmental Bodies and other third parties, domestic or foreign,
necessary to carry on any Borrower’s business or necessary
(including to avoid a conflict or breach under any agreement,
instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement, the
Other Documents or the Subordinated Loan Documentation, including
any Consents required under all applicable federal, state or other
Applicable Law.
“ Consigned
Inventory ” shall mean Inventory of any Borrower that is
in the possession of another Person on a consignment, sale or
return, or other basis that does not constitute a final sale and
acceptance of such Inventory.
“ Controlled
Group ” shall mean, at any time, each Borrower and all
members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control and
all other entities which, together with any Borrower, are treated
as a single employer under Section 414 of the Code.
“ Custome
r” 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.
“ Customs
” shall have the meaning set forth in Section 2.11(b)
hereof.
“ Daily LIBOR
Rate ” shall mean, for any day, the rate per annum
determined by the Agent by dividing (x) the Published Rate by (y) a
number equal to 1.00 minus the Reserve Percentage.
“ Debt
Payments ” shall mean and include (a) all cash actually
expended by any Borrower to make interest payments on any Advances
hereunder, plus (b) accrued but unpaid interest on account of
Eurodollar Rate Loans, plus (c) all cash actually expended by any
Borrower to make payments for all fees, commissions and charges set
forth herein and with respect to any Advances, plus (d) all cash
actually expended by any Borrower to make payments on Capitalized
Lease Obligations, plus (e) all cash actually expended by any
Borrower to make payments with respect to any other Indebtedness
for borrowed money.
“ Default
” shall mean an event, circumstance or condition 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
2.23(a) hereof.
“ Depository
Accounts ” shall have the meaning set forth in Section
4.15(h) hereof.
“
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.
“ Drawing
Date ” shall have the meaning set forth in Section
2.12(b) hereof.
“ Early
Termination Date ” shall have the meaning set forth in
Section 13.1 hereof.
4
“ 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 (excluding extraordinary gains and losses),
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
of Borrowers on a Consolidated Basis for such period, plus (iii)
amortization expenses of Borrowers on a Consolidated Basis for such
period.
“ Eligible
Receivables ” shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising in the Ordinary
Course of Business and which Agent, in its sole credit judgment,
shall deem to be an Eligible Receivable, based on such
considerations as Agent may from time to time deem appropriate. A
Receivable shall not be deemed eligible unless such Receivable is
subject to Agent’s first priority perfected security interest
and no other Lien (other than Permitted Encumbrances), and is
evidenced by an invoice or other documentary evidence satisfactory
to Agent. In addition, no Receivable shall be an Eligible
Receivable if:
(a)
it arises out of a sale
made by any Borrower to an Affiliate of any Borrower or to a Person
controlled by an Affiliate of any Borrower;
(b)
it is due or unpaid
more than twenty-two (22) days after the original invoice
date;
(c)
fifty percent (50%) or
more of the Receivables from such Customer are not deemed Eligible
Receivables hereunder;
(d)
any covenant,
representation or warranty contained in this Agreement with respect
to such Receivable has been breached;
(e)
the Customer shall (i)
apply for, suffer, or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a
meeting of its creditors, (ii) admit in writing its inability, or
be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment
for the benefit of creditors, (iv) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for
the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the
foregoing;
(f)
the sale is to a
Customer outside the continental United States of America or Canada
(other than Quebec), unless the sale is on letter of credit,
guaranty or acceptance terms, in each case acceptable to Agent in
its sole discretion;
(g)
the sale to the
Customer is on a bill-and-hold, guaranteed sale, sale-and-return,
sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(h)
Agent believes, in its
Permitted Discretion, that collection of such Receivable is
insecure or that such Receivable may not be paid by reason of the
Customer’s financial inability to pay;
(i)
the Customer is the
United States of America, any state or any department, agency or
instrumentality of any of them, unless the applicable Borrower
assigns its right to payment of such Receivable to Agent pursuant
to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or
has otherwise complied with other applicable statutes or
ordinances;
(j)
the goods giving rise
to such Receivable have not been delivered to and accepted by the
Customer or the services giving rise to such Receivable have not
been performed by the applicable Borrower and accepted by the
Customer or the Receivable otherwise does not represent a final
sale;
(k)
the Receivables of the
Customer exceed a credit limit determined by Agent, in its
Permitted Discretion, to the extent such Receivable exceeds such
limit;
(l)
the Receivable is
subject to any offset, deduction, defense, dispute, or counterclaim
against any obligation of any Borrower or any Affiliate Plant, the
Customer is also a creditor or supplier of a Borrower or any
Affiliate Plant or the Receivable is contingent in any respect or
for any reason;
5
(m)
the applicable Borrower
has made any agreement with any Customer for any deduction
therefrom, except for discounts or allowances made in the Ordinary
Course of Business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of
each respective invoice related thereto;
(n)
any return, rejection
or repossession of the merchandise has occurred or the rendition of
services has been disputed;
(o)
such Receivable is not
payable to a Borrower;
(p)
such Receivables is an
Argos Receivable;
(q)
such Receivable is not
unconditionally payable in U.S. Dollars or Canadian
Dollars;
(r)
twenty-five percent
(25%) or more of the Eligible Receivables are owing from such
Customer; or
(s)
such Receivable is not
otherwise satisfactory to Agent in its Permitted
Discretion.
“
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, guidelines, 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 all
equipment, machinery, apparatus, motor vehicles, fittings,
furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions
thereto.
“ Equity
Interests ” of any Person shall mean any and all shares,
rights to purchase, options, warrants, general, limited or limited
liability partnership interests, member interests, participation or
other equivalents of or interest in (regardless of how designated)
equity of such Person, whether voting or nonvoting, including
common stock, preferred stock, convertible securities or any other
“equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC
under the Exchange Act).
“ 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 higher of (A)
2.00% per annum, and (B) interest rate per annum determined by
Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate
which appears on the Bloomberg Page BBAM1 (or on such other
substitute Bloomberg page that displays rates at which US dollar
deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source
selected by Agent which has been approved by the British
Bankers’ Association as an authorized information vendor for
the purpose of displaying rates at which U.S. dollar deposits are
offered by leading banks in the London interbank deposit market (an
“Alternate Source”), at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of
such Interest Period as the London interbank offered rate for U.S.
Dollars for an amount comparable to such Eurodollar Rate Loan and
having a borrowing date and a maturity comparable to such Interest
Period (or if there shall at any time, for any reason, no longer
exist a Bloomberg Page BBAM1 (or any substitute page) or any
Alternate Source, a comparable replacement rate determined by Agent
at such time (which determination shall be conclusive absent
manifest error)), by (ii) a number equal 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 Bloomberg or appropriate Successor as shown
on
|
|
Eurodollar Rate =
|
Bloomberg Page BBAM1
1.00 - Reserve Percentage
|
6
The Eurodollar Rate
shall be adjusted with respect to any Eurodollar Rate Loan that is
outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. The Agent shall give prompt
notice to the Borrowing Agent of the Eurodollar Rate as determined
or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.
“ Eurodollar
Rate Loan ” shall mean an Advance at any time that bears
interest based on the Eurodollar Rate.
“ Event of
Default ” shall have the meaning set forth in Article X
hereof.
“ Exchange
Act ” shall have the mean the Securities Exchange Act of
1934, as amended.
“ 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.
“ 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 ” for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed) which
is the daily federal funds open rate as quoted by ICAP North
America, Inc. (or any successor) as set forth on the Bloomberg
Screen BTMM for that day opposite the caption “OPEN”
(or on such other substitute Bloomberg Screen that displays such
rate), or as set forth on such other recognized electronic source
used for the purpose of displaying such rate as selected by PNC (an
“Alternate Source”) (or if such rate for such day does
not appear on the Bloomberg Screen BTMM (or any substitute screen)
or on any Alternate Source, or if there shall at any time, for any
reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate
determined by the PNC at such time (which determination shall be
conclusive absent manifest error); 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. If and when the Federal Funds Open Rate changes, the
rate of interest with respect to any advance to which the Federal
Funds Open Rate applies will change automatically without notice to
the Borrowers, effective on the date of any such change.
“ Fixed Charge
Coverage Ratio ” shall mean and include, with respect to
any fiscal period, the ratio of (a) EBITDA, minus Unfunded Capital
Expenditures made during such period, minus distributions (other
than a distribution in an amount not to exceed $5,200,000 used
solely to repay the Intercompany Debt on the Closing Date)
(including tax distributions made during such period) and
dividends, minus cash taxes paid during such period to (b) all Debt
Payments made during such period (other than principal payments of
the Subordinated Debt).
“ Foreign
Subsidiary ” of any Person, shall mean any Subsidiary of
such Person that is not organized or incorporated in the United
States or any State or territory thereof.
“ Formula
Amount ” shall have the meaning set forth in Section
2.1(a).
“ Funded
Debt ” shall mean, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by
notes, bonds, debentures, or similar evidences of Indebtedness that
by its terms matures more than one year from, or is directly or
indirectly renewable or extendible at such Person’s option
under a revolving credit or similar agreement obligating the lender
or lenders to extend credit over a period of more than one year
from the date of creation thereof, and specifically including
Capitalized Lease Obligations, current maturities of long-term
debt, revolving credit and short term debt extendible beyond one
year at the option of the debtor, and also including, in the case
of Borrower, the Obligations and, without duplication, Indebtedness
consisting of guaranties of Funded Debt of other
Persons.
“ GAAP
” shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
7
“ General
Intangibles ” shall mean and include as to each Borrower
all of such Borrower’s general intangibles, whether now owned
or hereafter acquired, including all payment intangibles, all
choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications,
equipment formulations, manufacturing procedures, quality control
procedures, trademarks, trademark applications, service marks,
trade secrets, goodwill, copyrights, design rights, software,
computer information, source codes, codes, records and updates,
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).
“ Governmental
Acts ” shall have the meaning set forth in Section
2.17.
“ Governmental
Body ” shall mean any nation or government, any state or
other political subdivision thereof or any entity, authority,
agency, division or department exercising the legislative,
judicial, regulatory or administrative functions of or pertaining
to a government.
“
Guarantor ” shall mean Green Plains Renewable Energy,
Inc., an Iowa corporation and any other Person who may hereafter
guarantee payment or performance of the whole or any part of the
Obligations and “Guarantors” means collectively all
such Persons.
“ Guaranty
” shall mean any guaranty of the obligations of Borrowers
executed by a Guarantor in favor of Agent for its benefit and for
the ratable benefit of Lenders.
“ Hazardous
Discharge ” shall have the meaning set forth in Section
4.19(d) hereof.
“ 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, Articles 15 and
27 of the New York State Environmental Conservation Law or any
other applicable Environmental Law and in the regulations adopted
pursuant thereto.
“ Hazardous
Wastes ” shall mean all waste materials 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.
“ Hedge
Liabilities ” shall have the meaning provided in the
definition of “Lender-Provided Interest Rate
Hedge”.
“ Holdings
” shall mean Green Plains Renewable Energy, Inc., an Iowa
corporation.
“ Increased
Tax Burden ” shall mean the additional federal, state or
local taxes assumed to be payable by a member of any Borrower as a
result of such Borrower’s status as a limited liability
company as evidenced and substantiated by the tax returns filed by
such Borrower as a limited liability company, with such taxes being
calculated for all members at the highest marginal rate applicable
to any member.
“
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.
“ Intellectual
Property ” shall mean property constituting under any
Applicable Law a patent, patent application, copyright, trademark,
service mark, trade name, mask work, trade secret or license or
other right to use any of the foregoing.
“ Intellectual
Property Claim ” shall mean the assertion by any Person
of a claim (whether asserted in writing, by action, suit or
proceeding or otherwise) that any Borrower’s ownership, use,
marketing, sale or distribution of any Inventory, Equipment,
Intellectual Property or other property or asset is violative of
any ownership of or right to use any Intellectual Property of such
Person.
8
“ Intercompany
Debt ” shall mean the Indebtedness of GTRADE owing to
Holdings in connection with certain loans of borrowed money from
time to time.
“ Interest
Period ” shall mean the period provided for any
Eurodollar Rate Loan pursuant to Section 2.2(b).
“ Interest
Rate Hedge ” shall mean an interest rate exchange,
collar, cap, swap, adjustable strike cap, adjustable strike
corridor or similar agreements entered into by any Borrower or its
Subsidiaries in order to provide protection to, or minimize the
impact upon, such Borrower, any Guarantor and/or their respective
Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.
“
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.
“ 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.
“ 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.
“
Lender-Provided Interest Rate Hedge ” shall mean an
Interest Rate Hedge which is provided by any Lender and with
respect to which the Agent confirms meets the following
requirements: such Interest Rate Hedge (i) is documented in a
standard International Swap Dealer Association Agreement, (ii)
provides for the method of calculating the reimbursable amount of
the provider’s credit exposure in a reasonable and customary
manner, and (iii) is entered into for hedging (rather than
speculative) purposes. The liabilities of any Borrower to the
provider of any Lender-Provided Interest Rate Hedge (the
“Hedge Liabilities”) shall be “Obligations”
hereunder, guaranteed obligations under the Guaranty and otherwise
treated as Obligations for purposes of each of the Other Documents.
The Liens securing the Hedge Liabilities shall be pari passu with
the Liens securing all other Obligations under this Agreement and
the Other Documents.
“ Letter of
Credit Fees ” shall have the meaning set forth in Section
3.2.
“ Letter of
Credit Borrowing ” shall have the meaning set forth in
Section 2.12(d).
“ Letter of
Credit Sublimit ” shall mean $1,000,000.
“ 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 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.
“ Lien Waiver
Agreement ” shall mean an agreement which is executed in
favor of Agent by a Person who owns or occupies premises at which
any Collateral may be located from time to time and by which such
Person shall waive any Lien that such Person may ever have with
respect to any of the Collateral and shall authorize Agent from
time to time to enter upon the premises to inspect or remove the
Collateral from such premises or to use such premises to store or
dispose of such Inventory.
“ Material
Adverse Effect ” shall mean a material adverse effect on
(a) the condition (financial or otherwise), results of operations,
assets, business, properties or prospects of any Borrower or any
Guarantor, (b) any Borrower’s ability to duly and punctually
pay or perform 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.
9
“ 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 Loan
Amount ” shall mean $30,000,000.
“ Maximum
Undrawn Amount ” shall mean with respect to any
outstanding Letter of Credit, the amount of such Letter of Credit
that is or may become available to be drawn, including all
automatic increases provided for in such Letter of Credit, whether
or not any such automatic increase has become effective.
“ Minimum
Availability Reserve ” shall mean $5,000,000 (or such
lesser amount as Agent may determine in its sole
discretion.)
“ Modified
Commitment Transfer Supplement ” shall have the meaning
set forth in Section 16.3(d).
“
Multiemployer Plan ” shall mean a “multiemployer
plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA to
which contributions are required by any Borrower or any member of
the Controlled Group.
“ Multiple
Employer Plan ” shall mean a Plan which has two or more
contributing sponsors (including any Borrower or any member of the
Controlled Group) at least two of whom are not under common
control, as such a plan is described in Section 4064 of
ERISA.
“ Note
” shall mean the Revolving Credit Note.
“
Obligations ” shall mean and include any and all loans
(including without limitation, all Advances), advances, debts,
liabilities, obligations, covenants and duties owing by any
Borrower to Lenders or Agent or to any other direct or indirect
subsidiary or affiliate of Agent or any Lender of any kind or
nature, present or future (including any interest or other amounts
accruing thereon, and any costs and expenses of any Person payable
by any Borrower and any indemnification obligations payable by any
Borrower arising or payable 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 or other
amounts is allowable or allowed in such proceeding), whether or not
evidenced by any note, guaranty or other instrument, whether
arising under any agreement, instrument or document, (including
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, 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 Lenders 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 and any Borrower and any amendments, extensions,
renewals or increases and all costs and expenses of Agent and any
Lender 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.
“ Ordinary
Course of Business ” shall mean with respect to any
Borrower, the ordinary course of such Borrower’s business as
conducted on the Closing Date.
“ Original
Owners ” shall mean Holdings.
“ Other
Documents ” shall mean, the Note, the Perfection
Certificates any Guaranty, any Lender-Provided Interest Rate Hedge
and any and all other agreements, instruments and documents,
including intercreditor agreements, guaranties, pledges, powers of
attorney, consents, interest or currency swap agreements or other
similar agreements and all other writings heretofore, now or
hereafter executed by any Borrower or any Guarantor and/or
delivered to Agent or any Lender in respect of the transactions
contemplated by this Agreement.
“
Out-of-Formula Loans ” shall have the meaning set
forth in Section 16.2(b).
10
“ 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.
“
Participation Advance ” shall have the meaning set
forth in Section 2.12(d).
“
Participation Commitment ” shall mean each
Lender’s obligation to buy a participation of the Letters of
Credit issued hereunder.
“ Payment
Office ” shall mean initially Two Tower Center Boulevard,
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
established pursuant to Subtitle A of Title IV of ERISA or any
successor.
“ Perfection
Certificates ” shall mean collectively, the Perfection
Certificates and the responses thereto provided by each Borrower
and delivered to Agent.
“ Pension
Benefit Plan ” shall mean at any time any employee
pension benefit plan (including a Multiple Employer Plan, but not a
Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412 of the
Code and either (i) is maintained or to which contributions are
required by any member of the Controlled Group for employees of any
member of the Controlled Group; or (ii) has at any time within the
preceding five years been maintained or to which contributions have
been required by any entity which was at such time a member of the
Controlled Group for employees of any entity which was at such time
a member of the Controlled Group.
“ Permitted
Discretion ” shall mean, with respect to Agent, the
exercise in good faith of its reasonable business judgment from the
perspective of an asset based lender.
“ 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 Properly
Contested; (c) Liens disclosed in the financial statements referred
to in Section 5.5, the existence of which Agent has consented to in
writing; (d) deposits or pledges to secure obligations under
worker’s compensation, social security or similar laws, or
under unemployment insurance; (e) 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
Business; (f) Liens arising by virtue of the rendition, entry or
issuance against any Borrower or any Subsidiary, or any property of
any Borrower or any Subsidiary, of any judgment, writ, order, or
decree for so long as each such Lien (x) is in existence for less
than 20 consecutive days after it first arises or is being Properly
Contested and (y) is at all times junior in priority to any Liens
in favor of Agent; (g) mechanics’, workers’,
materialmen’s or other like Liens arising in the Ordinary
Course of Business with respect to obligations which are not due or
which are being Properly Contested; (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 of any Borrower 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; other Liens incidental to the conduct
of any Borrower’s business or the ownership of its property
and assets which were not incurred in connection with the borrowing
of money or the obtaining of advances or credit, and which do not
in the aggregate materially detract from Agent’s or
Lenders’ rights in and to the Collateral or the value of any
Borrower’s property or assets or which do not materially
impair the use thereof in the operation of any Borrower’s
business; and (i) Liens disclosed on Schedule 1.2.
“ Person
” shall mean any individual, sole proprietorship,
partnership, corporation, business trust, joint stock company,
trust, unincorporated organization, association, limited liability
company, limited liability partnership, institution, public benefit
corporation, joint venture, entity or Governmental Body (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 (including a Pension Benefit Plan and a
Multiemployer Plan), maintained for employees of any Borrower 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.
11
“ PNC
” shall have the meaning set forth in the preamble to this
Agreement and shall extend to all of its successors and
assigns.
“ Post-Term
Cash Collateral ” shall have the meaning set forth in
Section 2.10(e) hereof.
“ Post-Term
Letter of Credit ” shall have the meaning set forth in
Section 2.10(d) hereof.
“ Post-Term
Letter of Credit Obligations ” shall have the meaning set
forth in Section 2.10(e) hereof.
“ 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.
“ Properly
Contested ” shall mean, in the case of any Indebtedness
or Lien, as applicable, of any Person (including any taxes) that is
not paid as and when due or payable by reason of such
Person’s bona fide dispute concerning its liability to pay
same or concerning the amount thereof, (i) such Indebtedness or
Lien, as applicable, is being properly contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted; (ii) such Person has established appropriate reserves as
shall be required in conformity with GAAP; (iii) the non-payment of
such Indebtedness will not have a Material Adverse Effect and will
not result in the forfeiture of any assets of such Person; (iv) no
Lien is imposed upon any of such Person’s assets with respect
to such Indebtedness unless such Lien is at all times junior and
subordinate in priority to the Liens in favor of the Agent (except
only with respect to property taxes that have priority as a matter
of applicable state law) and enforcement of such Lien is stayed
during the period prior to the final resolution or disposition of
such dispute; (v) if such Indebtedness or Lien as applicable,
results from, or is determined by the entry, rendition or issuance
against a Person or any of its assets of a judgment, writ, order or
decree, enforcement of such judgment, writ, order or decree is
stayed pending a timely appeal or other judicial review; and (vi)
if such contest is abandoned, settled or determined adversely (in
whole or in part) to such Person, such Person forthwith pays such
Indebtedness and all penalties, interest and other amounts due in
connection therewith.
“
Projections ” shall have the meaning set forth in
Section 5.5(b) hereof.
“ Published
Rate ” shall mean the rate of interest published each
Business Day in the Wall Street Journal “Money Rates”
listing under the caption “London Interbank Offered
Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be
the Eurodollar Rate for a one month period as published in another
publication selected by the Agent).
“
Purchasing CLO ” shall have the meaning set forth in
Section 16.3(d) hereof.
“ Purchasing
Lender ” shall have the meaning set forth in Section
16.3(c) hereof.
“ RCRA
” shall mean the Resource Conservation and Recovery Act, 42
U.S.C. §§ 6901 et seq., as same may be amended from time
to time.
“ Real
Property ” shall mean all of each Borrower’s right,
title and interest in and to the owned and leased premises
identified on Schedule 4.19 hereto or which is hereafter owned or
leased by any Borrower.
“
Receivables ” shall mean and include, as to each
Borrower, all of such Borrower’s accounts, contract rights,
instruments (including those evidencing indebtedness owed to such
Borrower by its 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.
“ Receivables
Advance Rate ” shall have the meaning set forth in
Section 2.1(a)(y)(i) hereof.
“ Register
” shall have the meaning set forth in Section
16.3(e).
“
Reimbursement Obligation ” shall have the meaning set
forth in Section 2.12(b)hereof.
“ Release
” shall have the meaning set forth in Section 5.7(c)(i)
hereof.
12
“ Reportable
Event ” shall mean a reportable event described in
Section 4043(c) of ERISA or the regulations promulgated
thereunder.
“ Required
Lenders ” shall mean Lenders holding at least sixty-six
and two-thirds percent (66 2/3%) of the Advances and, if no
Advances are outstanding, shall mean Lenders holding sixty-six and
two-thirds percent (66 2/3%) of the Commitment Percentages;
provided, however, if there are fewer than three (3) Lenders,
Required Lenders shall mean all Lenders.
“ Reserve
Percentage ” shall mean as of any day the maximum
percentage in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”.
“ Revolving
Advances ” shall mean Advances made other than Letters of
Credit.
“ Revolving
Credit Note ” shall mean the promissory note 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 plus two and
one-half percent (2.50%)with respect to Domestic Rate Loans and (b)
the sum of the Eurodollar Rate plus three and one-half percent
(3.50%)with respect to Eurodollar Rate Loans.
“ SEC
” shall mean the Securities and Exchange Commission or any
successor thereto.
“ 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.
“ Securities
Act ” shall mean the Securities Act of 1933, as
amended.
“ Settlement
Date ” shall mean the Closing Date and thereafter
Wednesday or Thursday of each week or more frequently if Agent
deems appropriate unless such day is not a Business Day in which
case it shall be the next succeeding Business Day.
“ Subordinated
Debt ” shall mean Indebtedness to Holdings, subordinated
pursuant to a Subordination Agreement.
“ Subordinated
Loan Documentation ” shall mean the subordinated
promissory notes issued by Borrowers in favor of Holdings from time
to time evidencing the subordinated loans made by Holdings to
Borrowers, in form and substance reasonably satisfactory to
Agent.
“
Subordination Agreement ” shall mean the Subordination
Agreements executed by and among Agent, Borrowers and Holdings from
time to time in the form of Exhibit 1.4 attached hereto.
“
Subsidiary ” of any Person shall mean a corporation or
other entity of whose Equity Interests having ordinary voting power
(other than Equity 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.
“ Subsidiary
Stock ” shall mean all of the issued and outstanding
Equity Interests of any Subsidiary owned by any Borrower (not to
exceed 65% of the Equity Interests of any Foreign
Subsidiary).
“ 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; (ii) the withdrawal of any Borrower or any member of the
Controlled Group from a 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; (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 (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 Section 4203 or 4205 of ERISA, of
any Borrower or any member of the Controlled Group from a
Multiemployer Plan.
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“ Third Party
Contracts ” shall mean those certain ethanol marketing
agreements and distillers grain marketing agreements by and among a
Person (other than an Affiliate Plant) and Borrowers, or any of
them, and each individually referred to as a “Third Party
Contract”.
“ 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. §§ 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.
“ Trading with
the Enemy Act ” shall mean the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any enabling legislation or
executive order relating thereto.
“
Transactions ” shall have the meaning set forth in
Section 5.5 hereof.
“
Transferee ” shall have the meaning set forth in
Section 16.3(d) hereof.
“ Undrawn
Availability ” at a particular date shall mean an amount
equal to (a) the lesser of (i) the Formula Amount or (ii) the
Maximum Loan Amount, less the Maximum Undrawn Amount, less the
Minimum Availability Reserve, minus (b) the sum of (i) the
outstanding amount of Advances, plus (ii) all amounts due and owing
to any Borrower’s trade creditors which are outstanding
beyond normal trade terms, plus (iii) fees and expenses for which
Borrowers are liable but which have not been paid or charged to
Borrowers’ Account.
“ Unfunded
Capital Expenditures ” shall mean Capital Expenditures
made through Revolving Advances or out of Borrowers’ own
funds other than through equity contributed subsequent to the
Closing Date or purchase money or other financing or lease
transactions permitted hereunder.
“ Uniform
Commercial Code ” shall have the meaning set forth in
Section 1.3 hereof.
“ 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 Illinois from time to time (the
“Uniform Commercial Code”) shall have the meaning given
therein unless otherwise defined herein. Without limiting the
foregoing, the terms “accounts”, “chattel
paper”, “commercial tort claims”,
“instruments”, “general intangibles”,
“goods”, “payment intangibles”,
“proceeds”, “supporting obligations”,
“securities”, “investment property”,
“documents”, “deposit accounts”,
“software”, “letter of credit rights”,
“inventory”, “equipment” and
“fixtures”, as and when used in the description of
Collateral shall have the meanings given to such terms in Articles
8 or 9 of the Uniform Commercial Code. 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.
14
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. All references herein
to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement. 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 references to any of the Other
Documents, shall include any and all modifications, supplements or
amendments thereto, any and all restatements or replacements
thereof and any and all extensions or renewals thereof. All
references herein to the time of day shall mean the time in New
York, New York. Unless otherwise provided, all financial
calculations shall be performed with Inventory valued on a
first-in, first-out basis. Whenever the words
“including” or “include” shall be used,
such words shall be understood to mean “including, without
limitation” or “include, without limitation”. A
Default or Event of Default shall be deemed to exist at all times
during the period commencing on the date that such Default or Event
of Default occurs to the date on which such Default or Event of
Default is waived in writing pursuant to this Agreement or, in the
case of a Default, is cured within any period of cure expressly
provided for in this Agreement; and an Event of Default shall
“continue” or be “continuing” until such
Event of Default has been waived in writing by the Required Lenders
or all Lenders, as applicable. Any Lien referred to in this
Agreement or any of the Other Documents as having been created in
favor of Agent, any agreement entered into by Agent pursuant to
this Agreement or any of the Other Documents, any payment made by
or to or funds received by Agent pursuant to or as contemplated by
this Agreement or any of the Other Documents, or any act taken or
omitted to be taken by Agent, shall, unless otherwise expressly
provided, be created, entered into, made or received, or taken or
omitted, for the benefit or account of Agent and Lenders. Wherever
the phrase “to the best of Borrowers’ knowledge”
or words of similar import relating to the knowledge or the
awareness of any Borrower are used in this Agreement or Other
Documents, such phrase shall mean and refer to (i) the actual
knowledge of a senior officer of any Borrower or (ii) the knowledge
that a senior officer would have obtained if he had engaged in good
faith and diligent performance of his duties, including the making
of such reasonably specific inquiries as may be necessary of the
employees or agents of such Borrower and a good faith attempt to
ascertain the existence or accuracy of the matter to which such
phrase relates. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise within the limitations of, another
covenant shall not avoid the occurrence of a default if such action
is taken or condition exists. In addition, all representations and
warranties hereunder shall be given independent effect so that if a
particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty
concerning the same or similar subject matter is correct or is not
breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.
II.
ADVANCES,
PAYMENTS.
2.1.
Revolving
Advances .
(a)
Amount of Revolving
Advances .
Subject to the terms and conditions set forth in this Agreement
including Sections 2.1(c), 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 Loan Amount, less the
aggregate Maximum Undrawn Amount of all outstanding Letters of
Credit, less the Minimum Availability Reserve or (y) an amount
equal to the sum of:
(i)
up to 85%, subject to
the provisions of Section 2.1(c) hereof (“Receivables Advance
Rate”), of Eligible Receivables, minus
(ii)
the Minimum
Availability Reserve, minus
(iii)
the aggregate Maximum
Undrawn Amount of all outstanding Letters of Credit,
minus
(iv)
such reserves as Agent
may reasonably deem proper and necessary from time to time in its
Permitted Discretion.
The amount derived from
the sum of (x) Sections 2.1(a)(y)(i) minus (y) Section 2.1
(a)(y)(ii, (iii) and (iv) 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)
Reserved
.
15
(c)
Discretionary
Rights . The
Receivables Advance Rate may be increased or decreased by Agent at
any time and from time to time in the exercise of its Permitted
Discretion. Each Borrower consents to any such increases or
decreases and acknowledges that decreasing the Receivables Advance
Rate or increasing or imposing reserves may limit or restrict
Advances requested by Borrowing Agent. The rights of Agent under
this subsection are subject to the provisions of Section
16.2(b).
2.2.
Procedure for
Revolving Advances Borrowing .
(a)
Borrowing Agent on
behalf of any Borrower may notify Agent prior to 10:00 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 agreement with Agent or Lenders, or with
respect to any other Obligation, become due, same shall be deemed a
request for a Revolving Advance maintained as a Domestic Rate Loan
as of the date such payment is due, in the amount required to pay
in full such interest, fee, charge or Obligation under this
Agreement or any other agreement with Agent or Lenders, and such
request shall be irrevocable.
(b)
Notwithstanding the
provisions of subsection (a) above, in the event any Borrower
desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall
give Agent written notice by no later than 10:00 a.m. on the day
which is three (3) Business Days prior to the date such Eurodollar
Rate Loan is to be borrowed, 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 $500,000 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
any Borrower during the continuance of a Default or an Event of
Default. After giving effect to each requested Eurodollar Rate
Loan, including those which are converted from a Domestic Rate Loan
under Section 2.2(d), there shall not be outstanding more than five
(5) Eurodollar Rate Loans, in the aggregate.
(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 later than 10:00 a.m. on the day which
is 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, Borrowing Agent 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, Borrowing Agent
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 Borrowing Agent
desires to convert a loan, Borrowing Agent shall give Agent written
notice by no later than 10:00 a.m. (i) on the day which is three
(3) Business Days’ prior to the date on which such conversion
is to occur with respect to a conversion from a Domestic Rate Loan
to a Eurodollar Rate Loan, or (ii) on the day which is one (1)
Business Day prior to the date on which such conversion is to occur
with respect to a conversion from a Eurodollar Rate Loan to a
Domestic Rate Loan, specifying, in each case, 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.
(e)
At its option and upon
written notice given prior to 10:00 a.m. (New York time) at least
three (3) Business Days’ prior to the date of such
prepayment, any Borrower may prepay the Eurodollar Rate Loans in
whole at any time or in part from time to time with accrued
interest on the principal being prepaid to the date of such
repayment. Such Borrower shall specify the date of prepayment of
Advances which are Eurodollar Rate Loans and the amount of such
prepayment. In the event that any prepayment of a Eurodollar Rate
Loan is required or permitted on a date other than the last
Business Day of the then current Interest Period with respect
thereto, such Borrower shall indemnify Agent and Lenders therefor
in accordance with Section 2.2(f) hereof.
(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
16
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, 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 Borrowing Agent on behalf of
any Borrower or deemed to have been requested by any Borrower 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.
2.4.
Reserved
.
2.5.
Maximum
Advances .
The aggregate balance of Advances outstanding at any time shall not
exceed the lesser of (a) the Maximum Loan Amount, less the Maximum
Undrawn Amount of all issued and outstanding Letters of Credit,
less the Minimum Availability Reserve 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 next Business Day following
Agent’s receipt of 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 (i) the Business Day
following Agent’s receipt of such payments via wire transfer
or electronic depository check or (ii) in the case of payments
received by Agent in any other form, the Business Day such payment
constitutes good funds in Agent’s account. Agent is not,
however, required to credit Borrowers’ Account for the amount
of any item of payment which is unsatisfactory to Agent 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.
17
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 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, Agent shall issue or
cause the issuance of standby and/or trade Letters of Credit
(“Letters of Credit”) for the account 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
issuance thereof would then cause the sum of (i) the outstanding
Revolving Advances plus (ii) the Maximum Undrawn Amount of all
outstanding Letters of Credit to exceed the lesser of (x) the
Maximum Loan Amount minus the Maximum Undrawn Amount of all
outstanding Letters of Credit, minus the Minimum Availability
Reserve or (y) the Formula Amount. The Maximum Undrawn Amount of
outstanding Letters of Credit shall not exceed in the aggregate at
any time the Letter of Credit Sublimit. 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.
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, prior to 10:00 a.m. (New York time), at least five
(5) Business Days’ prior to the proposed date of issuance,
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 Customs and
Practice for Documentary Credits as most recently published by the
International Chamber of Commerce at the time the Letter of Credit
is issued (“UCP”) or the International Standby
Practices (ISP98-International Chamber of Commerce Publication
Number 590) (“ISP98 Rules”), and any subsequent
revision thereof at the time a standby Letter of Credit is issued,
as determined by Agent, and each trade Letter of Credit shall be
subject to the UCP.
(c)
Agent shall use its
reasonable efforts to notify Lenders of the request by Borrowing
Agent for a Letter of Credit hereunder.
(d)
Notwithstanding
anything to the contrary set forth in Section 2.10(b) or any other
provision of this Agreement, Borrowers may request and Agent (or
any other Issuer) may issue Letters of Credit (and/or renewals or
extensions of existing Letters of Credit) under this Agreement with
an expiry date that extends beyond the last day of the Term as then
in effect when such Letter of Credit (or the extension or renewal
thereof) is requested (any such Letter of Credit so issued, renewed
or extended, a “Post-Term Letter of Credit”), subject
to all other existing terms and conditions of and provisions in
this Agreement regarding Letters of Credit, including any terms,
conditions and provisions regarding the requesting and issuance
thereof, but provided that, under no circumstances may any such
Post-Term Letter of Credit as so issued, renewed or extended have
an expiry date later than the twelve-month anniversary of the last
day of the Term as in effect when such Post-Term Letter of Credit
is so issued, renewed or extended.
18
(e)
All of the obligations,
liabilities and indebtedness of any kind or nature of Borrowers
with respect to any and all such Post-Term Letter of Credits
(including all reimbursement obligations and obligations to pay
Letter of Credit Fees and obligations to pay interest in respect of
any disbursement made by Agent in connection with a drawing under a
Post-Term Letter of Credit that is not immediately reimbursed by
Borrowers (including any such interest accruing thereon after the
last day of the Term, or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding relating to Borrowers, whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding)) (any such obligations, liabilities and indebtedness,
the “Post-Term Letter of Credit Obligations”) shall
remain Obligations of Borrowers secured by the Collateral pursuant
to the Liens created under this Agreement and the Other Documents
both prior to and after the expiration of the Term, and Agent and
Lenders shall have no obligations to release any Liens on the
Collateral notwithstanding the overall termination of this
Agreement and of the commitments of the Lenders with respect to
Revolving Advances, until such time as the last such Post-Term
Letter of Credit shall have expired or terminated or shall been
fully drawn and all Post-Term Letter of Credit Obligations (other
than contingent indemnities and expense reimbursement obligations
to the extent no claim therefore has been made, or is reasonably
expected to be made) have been paid in full in cash, provided that,
notwithstanding the foregoing, on the last day of the Term,
Borrowers may provide cash collateral (any such cash collateral,
the “Post-Term Cash Collateral”) to Agent to be held as
security for such Post-Term Letter of Credit Obligations (and
Borrowers hereby grant to Agent a Lien and security interest in any
such Post-Term Cash Collateral so provided) in an amount equal to
one hundred and ten percent (110%) of the then-outstanding undrawn
face amount of all such Post-Term Letters of Credit plus the amount
of all Letter of Credit Fees that would accrue with respect to such
Post-Term Letters of Credit from and after the last day of the Term
through the expiry date as then in effect for each such Post Term
Letter of Credit, and in such event, if all other Obligations
(other than contingent indemnities and expense reimbursement
obligations to the extent no claim therefore has been made, or is
reasonably expected to be made) have been paid in full in cash,
Agent and Lenders will agree to release the Liens and security
interests on all other Collateral (subject to customary payoff
releases and indemnities) in accordance with this Agreement. Agent
will invest such cash collateral (less applicable reserves) in such
short-term money-market items as to which Agent and Borrowers
mutually agree and the net return on such investments shall be
credited to such account and constitute additional cash collateral.
Borrowers agree that upon the coming due of any such Post-Term
Letter of Credit obligations, Agent may use such Post-Term Cash
Collateral to pay and satisfy such Post-Term Letter of Credit
Obligations.
(f)
Notwithstanding
anything to the contrary contained in this Agreement and/or the
overall termination of this Agreement on the last day of the Term
(subject to the survival of the provisions thereof that survive the
termination of this Agreement by the terms thereof), all of the
applicable provisions of Article II, Sections 2.9, 2.10, 2.11 and
Section 3.2 of this Agreement, any Letter of Credit application for
any Post-Term Letter of Credit and any other documents executed by
and/or between Borrowers, Agent and/or Issuer with respect to any
Post-Term Letter of Credit (other than any provisions giving
Borrowers the right or ability to request that additional Letters
of Credit be issued or that existing Letters of Credit be renewed
or extended) shall survive the termination of this Agreement on the
last day of the Term for the benefit of Agent and Lenders (but not
for the benefit of Borrowers), and Borrowers shall remain bound
thereby, including without limitation of the obligations under
Section 3.2 of this Agreement for Borrowers to pay Letter of Credit
Fees to Agent and Issuer with respect to any Post-Term Letter of
Credit for so long as each Post-Term Letter of Credit shall remain
outstanding and the obligations under Section 2.9 for Borrowers to
pay interest on any disbursements or payments made by Agent and/or
Issuer relating to any Post-Term Letter of Credit until
reimbursed.
(g)
Nothing contained in
this Agreement shall be construed under any circumstances as an
agreement by Agent and/or Lenders to extend the Term or require or
obligate in any way Agent, Lenders and/or Issuer to make any
Revolving Advances or to issue any new Letters of Credit (or extend
or renew any existing Letters of Credit) on or after the last day
of the Term.
2.11.
Requirements For
Issuance of Letters of Credit .
(a)
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.
(b)
In connection with all
Letters of Credit issued or caused to be issued by Agent under this
Agreement, each Borrower hereby appoints Agent, or its designee, as
its attorney, with full power and authority if an Event of Default
shall have occurred, (i) to sign and/or endorse such
Borrower’s name upon any warehouse or other receipts, letter
of credit applications and acceptances, (ii) to sign such
Borrower’s name on bills of lading; (iii) to clear Inventory
through the United States of America Customs Department
(“Customs”) in the name of such Borrower or Agent or
Agent’s designee, and to sign and deliver to Customs
officials powers of attorney in the name of Borrower for such
purpose; and (iv) to complete in such Borrower’s name or
Agent’s, or in the name of Agent’s designee, any order,
sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Agent nor its
attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for
Agent’s or its attorney’s willful misconduct. This
power, being coupled with an interest, is irrevocable as long as
any Letters of Credit remain outstanding.
19
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 the Maximum Loan Amount, less the Maximum Undrawn Amount,
less the Minimum Availability Reserve 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 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 Effective 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.
20
2.14.
Documentation
. Each Borrower agrees
to be bound by the terms of the Letter of Credit Application and 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:
(i)
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;
(ii)
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;
(iii)
any lack of validity or
enforceability of any Letter of Credit;
(iv)
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, 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);
(v)
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;
(vi)
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;
(vii)
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;
(viii)
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;
(ix)
any Material Adverse
Effect on any Borrower or any Guarantor;
21
(x)
any breach of this
Agreement or any Other Document by any party thereto;
(xi)
the occurrence or
continuance of an insolvency proceeding with respect to any
Borrower or any Guarantor;
(xii)
the fact that a Default
or Event of Default shall have occurred and be
continuing;
(xiii)
the fact that the Term
shall have expired or this Agreement or the Obligations hereunder
shall have been terminated; and
(xiv)
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 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, facsimile, 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 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.
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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 (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 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 any Borrower 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
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)
Notwithstanding
anything to the contrary contained in Sections 2.20(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.
(i)
Each Lender shall be
entitled to earn interest at the applicable Revolving Interest Rate
on outstanding Advances which it has funded.
(ii)
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 rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such
portion.
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(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 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 Borrowing Agent 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.
Mandatory
Prepayments . Subject to Section 4.3 hereof,
when any Borrower sells or otherwise disposes of any Collateral
other than Inventory in the Ordinary Course of Business, Borrowers
shall repay the Advances in an amount equal to the net proceeds of
such sale (i.e., gross proceeds less the reasonable costs of such
sales or other dispositions), such repayments to be made promptly
but in no event more than one (1) Business Day following receipt of
such net proceeds, and until the date of payment, such proceeds
shall be held in trust for Agent. The foregoing shall not be deemed
to be implied consent to any such sale otherwise prohibited by the
terms and conditions hereof. Such repayments shall be applied to
the Advances in such order as Agent may determine, subject to
Borrowers’ ability to reborrow Revolving Advances in
accordance with the terms hereof.
2.22.
Use of
Proceeds .
(a)
Borrowers shall apply
the proceeds of Advances to (i) pay fees and expenses relating to
this transaction, (ii) refinance the Intercompany Indebtedness and
(iii) provide for its working capital needs and reimburse drawings
under Letters of Credit.
(b)
Without limiting the
generality of Section 2.22(a) above, neither the Borrowers, the
Guarantors nor any other Person which may in the future become
party to this Agreement or the Other Documents as a Borrower or
Guarantor, intends to use nor shall they use any portion of the
proceeds of the Advances, directly or indirectly, for any purpose
in violation of the Trading with the Enemy Act.
2.23.
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
2.23 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 (other than any Defaulting 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, Agent
shall not be obligated to transfer to a Defaulting Lender any
payments received by Agent for the Defaulting Lender’s
benefit, nor shall a Defaulting Lender be entitled to the sharing
of any payments hereunder (including any principal, interest or
fees). Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent. Agent may hold and, in its discretion,
re-lend to a Borrower the amount of such payments received or
retained by it for the account of such Defaulting
Lender.
(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 either
Advances outstanding or a Commitment Percentage.
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(d)
Other than as expressly
set forth in this Section 2.23, 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 2.23 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 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 at a rate per annum equal to with respect to
Revolving Advances, the applicable Revolving Interest Rate.
Whenever, subsequent to the date of this Agreement, the Alternate
Base Rate is increased or decreased, the 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, (i) at
the option of Agent or at the direction of Required Lenders, the
Obligations other than Eurodollar Rate Loans shall bear interest at
the Revolving Interest Rate for Domestic Loans plus two percent
(2%) per annum and (ii) Eurodollar Rate Loans shall bear interest
at the Revolving Interest Rate for Eurodollar Rate Loans plus two
percent (2.0%) percent per annum (as applicable, the “Default
Rate”).
3.2.
Letter of Credit
Fees .
(a)
Borrowers shall pay (x)
to Agent, for the ratable 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 three and one half percent (3.50%) per annum,
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 quarter and on the last day of the
Term, and (y) to the Issuer, a fronting fee of one quarter of one
percent (0.25%) per annum, together with any and all
administrative, issuance, amendment, payment and negotiation
charges with respect to Letters of Credit and all fees and expenses
as agreed upon by the Issuer and the Borrowing Agent in connection
with any Letter of Credit, including in connection with the
opening, amendment or renewal of any such Letter of Cr
