LOAN AND SECURITY AGREEMENT
BY AND AMONG
THE GSI GROUP, INC.,
AS BORROWER
AND
GSI HOLDINGS CORP., AND
ASSUMPTION LEASING COMPANY, INC.,
AS GUARANTORS
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL),
AS AGENT
AND
THE LENDERS NAMED HEREIN,
AS LENDERS
DATED: MAY 16, 2005
<PAGE>
TABLE OF CONTENTS
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PAGE
----
SECTION 1.
DEFINITIONS
1
----------- -----------
SECTION 2.
CREDIT FACILITIES
31
-----------
------------------
2.1
Revolving Loans.
31
---
-----------------
2.2
Letter of Credit Accommodations.
32
---
-----------------------------------
2.3
[Intentionally
Omitted].
36
---
-------------------------
2.4
Amortization of Fixed Asset Amount and Fixed Asset Acquisition
Value 36
---
--------------------------------------------------------------------
2.5
Commitments
36
---
-----------
2.6
Maximum Revolving
Credit Increases
37
---
-------------------------------------
2.7
Minimum Revolving
Credit Reductions
37
---
--------------------------------------
2.8
Voluntary Prepayments
37
---
----------------------
2.9
Payment of
Excess Borrowings.
37
---
--------------------------------
SECTION 3.
INTEREST AND
FEES
37
-----------
-------------------
3.1
Interest.
37
---
---------
3.2
Fees.
39
---
-----
3.3
Changes in
Laws and Increased Costs of Loans.
39
---
----------------------------------------------------
SECTION 4.
CONDITIONS PRECEDENT
41
-----------
---------------------
4.1
Conditions Precedent to Closing Date Loans and Letter of Credit
---
---------------------------------------------------------------
Accommodations
41
--------------
4.2
Conditions Precedent to Closing Date and Future Loans and Letter
of
---
-------------------------------------------------------------------
Credit Accommodations
44
----------------------
4.3
Additional Conditions Precedent to Exim Revolving Loans and Exim
Letter
---
-----------------------------------------------------------------------
of Credit Accommodations
44
--------------------------
SECTION 5.
GRANT AND PERFECTION OF SECURITY INTEREST
45
-----------
----------------------------------------------
5.1
Grant of Security Interest
45
---
-----------------------------
5.2
Perfection of
Security Interests.
46
---
------------------------------------
SECTION 6.
COLLECTION AND
ADMINISTRATION
50
-----------
-------------------------------
6.1
Borrower's Loan
Accounts
50
---
--------------------------
6.2
Statements
50
---
----------
6.3
Collection of
Accounts.
51
---
-------------------------
6.4
Payments.
52
--- ---------
6.5
Request For
and Authorization to Make Loans
55
---
-------------------------------------------------
6.6
Use of Proceeds
55
---
-----------------
6.7
[Intentionally
Omitted].
56
---
-------------------------
6.8
Pro Rata Treatment
56
---
--------------------
6.9
Sharing of
Payments, Etc.
56
---
----------------------------
<PAGE>
i
6.10
Settlement Procedures.
57
----
-----------------------
6.11
Obligations Several;
Independent
Nature of Lenders' Rights 59
----
----------------------------------------------------------------
SECTION 7.
COLLATERAL REPORTING
AND COVENANTS
59
-----------
-------------------------------------
7.1
Collateral Reporting.
59
---
----------------------
7.2
Accounts Covenants.
60
---
--------------------
7.3
Inventory Covenants
61
---
--------------------
7.4
Equipment and
Real Property Covenants
62
---
-----------------------------------------
7.5
Power of Attorney
62
---
-------------------
7.6
Right to Cure
63
---
---------------
7.7
Access to Premises
64
---
--------------------
SECTION 8.
REPRESENTATIONS AND
WARRANTIES
64
-----------
--------------------------------
8.1
Corporate Existence,
Power and Authority
64
---
--------------------------------------------
8.2
Name; State
of Organization; Chief Executive Office; Collateral
---
----------------------------------------------------------------------
Locations.
65
----------
8.3
Financial Statements;
No Material Adverse Change.
65
---
------------------------------------------------------
8.4
Priority of
Liens; Title to Properties
66
---
-------------------------------------------
8.5
Tax Returns
66
---
------------
8.6
Litigation
66
---
----------
8.7
Compliance with
Other Agreement and Applicable Laws.
67
---
----------------------------------------------------------
8.8
Environmental
Compliance.
67
---
--------------------------
8.9
Employee Benefits.
68
---
-------------------
8.10
Bank Accounts
68
----
--------------
8.11
Intellectual
Property
69
----
----------------------
8.12
Subsidiaries;
Affiliates;
Capitalization;
Solvency.
69
----
------------------------------------------------------
8.13 Labor Disputes.
70
----
----------------
8.14
Restrictions on
Subsidiaries
70
----
------------------------------
8.15
Material Contracts
70
----
-------------------
8.16
[Intentionally
Omitted]
71
----
------------------------
8.17
Accuracy and
Completeness
of Information
71
----
--------------------------------------------
8.18
Senior Indebtedness
71
----
--------------------
8.19
[Intentionally
Omitted]
71
----
------------------------
8.20
New Disclosures
71
----
----------------
8.21
Acquisition Agreement
71
----
----------------------
SECTION 9.
AFFIRMATIVE AND
NEGATIVE COVENANTS
72
-----------
-------------------------------------
9.1
Maintenance of
Existence.
72
---
---------------------------
9.2
New Collateral
Locations
72
---
--------------------------
9.3
Compliance with
Laws, Regulations, Etc.
72
---
-------------------------------------------
9.4
Payment of Taxes and Claims
73
---
-------------------------------
9.5
Insurance
74
---
---------
9.6
Financial Statements
and Other Information.
75
---
-----------------------------------------------
9.7
Sale of Assets, Consolidation, Merger, Dissolution, Etc
77
---
-------------------------------------------------------------
<PAGE>
ii
9.8
Encumbrances
79
---
------------
9.9
Indebtedness
80
---
------------
9.10
Loans, Investments,
Etc
82
----
-------------------------
9.11
Dividends and
Redemptions
86
----
---------------------------
9.12
Transactions with
Affiliates
87
----
------------------------------
9.13
Compliance with
ERISA
88
----
-----------------------
9.14
End of Fiscal Years; Fiscal Quarters
88
----
-----------------------------------------
9.15
Change in Business
88
----
--------------------
9.16
Limitation of
Restrictions
Affecting Subsidiaries
88
----
-----------------------------------------------------
9.17
[Intentionally
Omitted]
89
----
------------------------
9.18
License Agreements.
89
----
--------------------
9.19
After Acquired
Real Property
90
----
-------------------------------
9.20
Costs and Expenses
91
----
--------------------
9.21
Further Assurances
91
----
-------------------
9.22
Fixed Charge
Coverage Ratio
91
----
------------------------------
9.23
Permitted Bond
Repurchases
92
----
----------------------------
9.24
Sale Leasebacks
92
----
----------------
9.25
[Intentionally
Omitted]
92
----
------------------------
9.26
Exim Covenants
92
----
---------------
9.27
Brazil
92
----
------
SECTION 10.
EVENTS OF DEFAULT AND REMEDIES
93
------------
----------------------------------
10.1
Events of Default
93
----
-------------------
10.2
Remedies.
95
----
---------
SECTION 11.
JURY
TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW 98
------------
------------------------------------------------------------
11.1
Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver 98
----
---------------------------------------------------------------------
11.2
Waiver of Notices
100
----
-------------------
11.3
Amendments and
Waivers.
100
----
-------------------------
11.4
Waiver of Counterclaims
102
----
-------------------------
11.5
Indemnification
102
----
---------------
11.6
Limited Recourse
Against Holdings
102
----
------------------------------------
SECTION 12.
THE AGENT
103
------------ ----------
12.1
Appointment, Powers
and Immunities
103
----
-------------------------------------
12.2
Reliance by
Agent
103
----
-------------------
12.3
Events of Default.
103
----
--------------------
12.4
Wachovia in
its Individual Capacity
104
----
---------------------------------------
12.5
Indemnification
104
----
---------------
12.6
Non-Reliance on
Agent and Other Lenders
105
----
--------------------------------------------
12.7
Failure to
Act
105
----
----------------
12.8
Additional Loans
105
----
-----------------
12.9
Concerning the
Collateral and the Related Financing Agreements 106
----
---------------------------------------------------------------
<PAGE>
iii
12.10 Field Audit,
Examination Reports and Other Information; Disclaimer by
-----
---------------------------------------------------------------------
Lenders
106
-------
12.11 Collateral
Matters.
106
-----
--------------------
12.12 Agency
for Perfection
108
-----
-----------------------
12.13 Successor
Agent
108
-----
----------------
SECTION 13.
TERM
OF AGREEMENT; MISCELLANEOUS
109
------------
-----------------------------------
13.1
Term.
109
----
-----
13.2
Interpretative
Provisions.
110
----
---------------------------
13.3
Notices
111
----
-------
13.4
Partial Invalidity
112
----
-------------------
13.5
Successors
112
----
----------
13.6
Assignments;
Participations.
113
----
-----------------------------
13.7
Entire Agreement
115
----
-----------------
13.8
Counterparts, Etc
115
----
------------------
13.9
Confidentiality.
115
----
----------------
<PAGE>
iv
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A
Form
of Assignment and Acceptance
Exhibit B
Information
Certificate
Exhibit C Form
of Compliance Certificate
Exhibit D Form
of Borrowing Base Certificate
Exhibit E Closing
Checklist
Schedule 1
[Intentionally
Omitted]
Schedule 2
[Intentionally
Omitted]
Schedule 3
[Intentionally
Omitted]
Schedule 4
Commitments
Schedule 5
Eligibility
Matters
Schedule 6
Fiscal Months
<PAGE>
v
LOAN AND SECURITY AGREEMENT
---------------------------
This
Loan and Security
Agreement dated May 16, 2005 is entered into by and
among The GSI Group, Inc., a Delaware corporation
("Borrower"), GSI Holdings
Corp., a Delaware corporation ("Holdings"), Assumption Leasing
Company, Inc., an
Illinois corporation
("ALC" and together with Holdings, each individually
a
"Guarantor" and
collectively,
"Guarantors"),
the lenders from time to time
parties hereto,
whether by execution of this Agreement or an Assignment
and
Acceptance (each
individually,
a "Lender" and collectively, "Lenders") and
Wachovia Capital
Finance Corporation (Central) (f/k/a Congress Financial
Corporation
(Central)), an
Illinois corporation,
in its capacity as agent for
Lenders (in
such capacity, "Agent").
W I T N E S S E T H:
WHEREAS, Borrower
and Guarantors have requested that Agent and
Lenders
enter into
financing arrangements with Borrower
pursuant to which Lenders may
make loans
and provide other financial accommodations to Borrower; and
WHEREAS, each
Lender is willing to agree (severally and
not jointly) to make
such loans
and provide such
financial accommodations to Borrower on a pro rata
basis according to its Commitment (as defined below) on the terms
and conditions
set forth herein and Agent is willing to act
as agent for Lenders on the terms
and conditions
set forth herein and the other Financing Agreements; and
WHEREAS, Holdings,
which owns all of the
Capital Stock of Borrower, is willing
to guaranty
all of the Obligations and to pledge
to Agent, for the benefit of
Agent and Lenders, all of the Capital Stock of Borrower to secure the
Obligations;
NOW, THEREFORE,
in consideration of the mutual conditions and
agreements set
forth herein,
and for other good and valuable
consideration, the receipt and
sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.
DEFINITIONS
-----------
For
purposes of this Agreement, the following terms shall have the
respective meanings
given to them below:
"Accounts" shall mean, as to Borrower and each Guarantor, all
present and future
rights of Borrower and such Guarantor to payment of a monetary
obligation,
whether or not earned by performance, which is not evidenced by
chattel paper or
an instrument,
(a) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of, (b) for services
rendered or to be
rendered, (c)
for a secondary obligation incurred or to be
incurred, or (d)
arising out of the use of a credit or charge card or information
contained on or
for use with the card.
"Acquisition" shall
mean any transaction resulting in the acquisition by
Borrower or
a Subsidiary of Borrower of (a) all or
substantially all of the
assets of a Person or of any business or
division of a Person or (b) more than
50% of the Capital Stock of a Person.
<PAGE>
"Acquisition
Agreement" means
collectively,
that certain Stock Purchase
Agreement dated
as of April 6, 2005 among Holdings and the
stockholders of
Borrower party
thereto as the same may be amended or
otherwise modified from
time to time, together with all schedules, exhibits
agreements and documents
executed and/or
delivered in connection therewith.
"Adjusted Eurodollar
Rate" shall mean, with respect to each Interest Period for
any Eurodollar Rate
Loan, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of
1% determined by dividing (a) the Eurodollar Rate for such
Interest Period by (b) a percentage equal to: (i) one (1) minus
(ii) the Reserve
Percentage. For
purposes hereof, "Reserve Percentage" shall mean
the reserve
percentage, expressed
as a decimal,
prescribed by any United States or foreign
banking authority
for determining the
reserve requirement which is or would be
applicable to
deposits of United States dollars in a
non-United States or an
international banking
office of Reference Bank used to fund a
Eurodollar Rate
Loan or any Eurodollar Rate Loan made with the proceeds of such
deposit, whether
or not the Reference Bank actually holds or has made any such
deposits or loans.
The Adjusted Eurodollar Rate shall be adjusted on and as of the
effective day of
any change
in the Reserve Percentage.
"Affiliate" shall
mean, with respect to a specified Person, any
other Person
which directly or indirectly, through one or more intermediaries,
controls or is
controlled by or is
under common control with such Person, and without limiting
the generality of the foregoing, includes (a) any Person which
beneficially owns
or holds ten (10%) percent or more of any
class of Voting Stock of such Person
or other equity interests in such Person, (b) any
Person of which such Person
beneficially owns
or holds ten (10%) percent or more of any class
of Voting
Stock or in which such Person beneficially
owns or holds ten (10%) percent or
more of the equity interests and (c) any
director or executive officer of such
Person. For the
purposes of this definition, the term "control" (including with
correlative meanings,
the terms "controlled by" and "under common control
with"), as
used with respect to any Person, means
the possession, directly or
indirectly, of the
power to direct or cause the direction of the management and
policies of
such Person, whether through the ownership of Voting Stock,
by
agreement or
otherwise.
"Agent" shall
mean Wachovia Capital Finance Corporation (Central) (f/k/a
Congress Financial
Corporation (Central)) in its capacity as agent on behalf of
Lenders pursuant
to the terms hereof and any replacement or
successor agent
hereunder.
"Agent Payment
Account" shall mean account no. 5000000030266 of Agent at
Wachovia Bank, National Association, or such other account of Agent
as Agent may
from time to time designate to Borrower as the Agent Payment Account for
purposes of
this Agreement and the other Financing Agreements.
"Applicable Margin"
shall mean, at any
time, as to the Interest Rate for Prime
Rate Loans,
Eurodollar
Rate Loans and the letter of credit fee on the
outstanding undrawn
amount of Letter of Credit
Accommodations, the applicable
row of percentages set forth below if the Excess
Availability as of the last
Business Day
of the immediately preceding Fiscal Month is at or within
the
amounts indicated
for such row:
1
<PAGE>
Excess
Availability Applicable
Margin for Prime Rate Loans Applicable
-------------------
-----
Margin for
Eurodollar Rate Loans Letter of Credit
Accommodations
--
----------
--------------
(a) $10,000,000
or more 0.00%
1.50% 1.25%
(b) Greater
than or equal to $5,000,000 and less than
$10,000,000 0.25%
1.75% 1.50%
(c) Less than $5,000,000 0.50%
2.00% 1.75%
provided however,
that, beginning on the date hereof and continuing through May
-----------------
----
31, 2005, the Applicable Margin shall be (i)
0.00% for Prime Rate Loans, (ii)
1.50% for Eurodollar
Rate Loans and (iii) 1.25% for the letter of credit fee on
the outstanding
undrawn amount of Letter of Credit Accommodations.
"Approved Fund"
shall mean with respect to any Lender that is
a fund or
similar investment
vehicle that makes or
invests in commercial loans, any fund
or similar investment vehicle that invests in commercial loans which
is managed
or advised
by the same investment
advisor as such Lender or by an Affiliate of
such investment
advisor.
"Assignment and
Acceptance"
shall mean an Assignment and Acceptance
substantially in
the form of Exhibit A attached hereto (with blanks
appropriately
completed) delivered to Agent in connection with an assignment
of
a Lender's interest
hereunder in accordance with the provisions of Section 13.6
hereof.
"Blocked Accounts"
shall have the meaning set forth in Section 6.3
hereof.
"Bond Repurchase"
shall have the meaning set forth in Section 9.23
hereof.
"Borrowing Base" shall
mean, at any time, without duplication, the amount equal
to:
(a)
eighty-five (85%)
percent of the Net Amount of the Eligible
Accounts;
plus
----
(b)
the lesser of:
(i)
sixty-five (65%)
percent of the Value of Eligible Inventory,
(ii) eighty-five
(85%) percent of the Net Orderly
Liquidation Value
Factor (based
on the then most recent appraisal) multiplied
by the Value of
Eligible Inventory;
provided, that such
eighty-five (85%) percent advance rate
--------
shall be increased to ninety (90%) percent from April
1 through and including
October 31
of each year and shall remain at
eighty-five (85%) percent at all
other times,
and
(iii) the Inventory Loan Limit;
2
<PAGE>
plus
----
(c)
the
Fixed Asset Amount at such time;
plus
----
(d)
the Fixed Asset Acquisition Value at such time; provided, that the
--------
aggregate amount of the Fixed Asset Amount and the Fixed Asset
Acquisition Value
shall at no time exceed $20,000,000;
minus
-----
(e)
Reserves.
For purposes only of applying the Inventory Loan Limit, Agent may
treat the then
undrawn amounts of
outstanding Non-Exim Letter of Credit Accommodations for the
purpose of
purchasing
Eligible Inventory as Non-Exim Revolving Loans to
the
extent Agent
is in effect basing
the issuance of the Non-Exim Letter of Credit
Accommodations on the
Value of the Eligible Inventory being purchased with such
Non-Exim Letter of
Credit Accommodations.
In determining the actual amounts of
such Non-Exim
Letter of Credit
Accommodations to be so treated for purposes of
the Inventory Loan
Limit, the outstanding Non-Exim Revolving Loans and Reserves
shall be attributed first to any components of the
lending formulas set forth
above that
are not subject to such sublimit, before being
attributed to the
components of
the lending formulas that are subject to such sublimit.
The
amounts of Eligible Inventory shall be determined based on the
lesser of (A) the
amount of Inventory set forth in the general
ledger of Borrower or (B) the sum
of the perpetual inventory record maintained by Borrower;
"Brazil" means
Agromarau Industria E. Commercio Ltda.
"Business Day" shall mean any day other than a Saturday, Sunday, or
other day on
which commercial banks are authorized or required to close under
the laws of the
State of New York, or the State of North
Carolina, provided that Agent is open
for the transaction of business on such day, except that if a
determination of a
Business Day
shall relate to any Eurodollar Rate
Loans, the term Business Day
shall also
exclude any day on which banks are closed for
dealings in dollar
deposits in
the London interbank market or other applicable
Eurodollar Rate
market.
"Capital Leases"
shall mean, as applied to any Person, any lease
of (or any
agreement conveying
the right to use) any property
(whether real, personal or
mixed) by such Person as lessee which, in
accordance with GAAP, is required to
be reflected
as a liability on the balance sheet of such Person.
"Capital Stock"
shall mean, with respect to any Person, any and all
shares,
interests,
participations or
other equivalents (however designated) of such
Person's capital stock or partnership, limited liability company or
other equity
interests at
any time outstanding,
and any and all rights, warrants or options
exchangeable for or
convertible into such capital stock or other interests (but
excluding any
debt security that is exchangeable for
or convertible into such
capital stock).
3
<PAGE>
"Cash Equivalents"
shall mean, at any time, (a) any evidence of
Indebtedness
with a maturity date of ninety (90) days or less
issued or directly and fully
guaranteed or
insured by the United States of America of any agency or
instrumentality
thereof; provided, that the full faith and credit of the United
--------
States of America is
pledged in support thereof; (b) certificates of deposit or
bankers' acceptances
with a maturity of ninety (90) days or less of any
financial institution
that is a member of the Federal Reserve
System having
combined capital
and surplus and undivided profits of not less than
$250,000,000; (c) commercial paper (including variable rate demand
notes) with a
maturity of
ninety (90) days or less issued by a corporation (except an
Affiliate of Borrower or any Guarantor) organized under the laws of
any State of
the United States of
America or the District of Columbia and rated at least A-1
by Standard
& Poor's Ratings
Service, a division of The McGraw-Hill Companies,
Inc. or at least P-1 by Moody's Investors Service, Inc.; (d) repurchase
obligations with
a term of not more than thirty (30) days for
underlying
securities of
the types described in clause (a) above entered into
with any
financial institution
having combined capital and surplus and undivided profits
of not less than
$250,000,000; (e) repurchase agreements and reverse repurchase
agreements relating
to marketable direct
obligations issued or unconditionally
guaranteed by the
United States of America or issued by any governmental agency
thereof and backed by the full faith and credit of the United
States of America,
in each case maturing within ninety (90) days or less from the date of
acquisition; provided,
that the terms of such agreements comply with the
--------
guidelines set
forth in the Federal Financial Agreements of Depository
Institutions with
Securities Dealers and
Others, as adopted by the Comptroller
of the Currency on October 31, 1985; (f)
investments in money market funds and
mutual funds which invest substantially all of their assets in
securities of the
types described
in clauses (a) through (e) above; and (g) other "Cash
Equivalents" as
defined in the Indenture as of the date hereof.
"Change of Control"
shall mean (a) the transfer (in one transaction or a series
of transactions)
of all or substantially all of the
assets of Borrower or any
Guarantor to
any Person or group (as such term is
used in Section 13(d)(3) of
the Exchange
Act), other than as permitted in Section 9.7 hereof; (b) the
liquidation or
dissolution
of Borrower or any Guarantor or the
adoption of a
plan by the stockholders of Borrower or any Guarantor relating to the
dissolution or
liquidation
of Borrower or such Guarantor, other than as
permitted in Section 9.7 hereof; (c) the failure of the Permitted
Holders to own
directly or indirectly
more than fifty percent (50%) of the voting power of the
total outstanding
Voting Stock of
Holdings; (d) the failure of Holdings to own
directly or
indirectly
one hundred percent (100%) of the Capital Stock of
Borrower; or
(e) the failure of Borrower to own directly or
indirectly one
hundred percent (100%) of the voting power of the total outstanding
Voting Stock
of any Guarantor (other than Holdings); (f) the occurrence
of any "Change of
Control" (as
such term is defined in the Indenture).
"Closing Date"
shall mean the date of this Agreement.
"Code" shall
mean the Internal
Revenue Code of 1986, as the same now exists or
may from time to time hereafter be amended, modified, recodified or
supplemented, together
with all rules, regulations and interpretations
thereunder or
related thereto.
"Collateral" shall
have the meaning set forth in Section 5.1 hereof.
4
<PAGE>
"Collateral Access
Agreement"
shall mean an
agreement in writing, in form and
substance reasonably
satisfactory
to Agent, from any lessor of premises to
Borrower or
any Guarantor, or any other person to whom any Collateral is
consigned or
who has custody, control or possession
of any such Collateral or
who is otherwise the owner or operator of any premises on
which any of such
Collateral is located, pursuant to which such lessor, consignee or
other person,
inter alia,
acknowledges the first
priority security interest of Agent in such
Collateral, agrees
to waive (or otherwise subordinate to Agent's security
interest) any and all
claims such lessor, consignee or other person may, at any
time, have
against such Collateral, whether for processing, storage or
otherwise, and agrees to permit Agent access to, and the right to
remain on, the
premises of
such lessor, consignee or other person to the extent
reasonably
necessary to
exercise Agent's
rights and remedies and otherwise deal with such
Collateral to the extent permitted under any of the Financing
Agreements, and in
the case of any consignee or other person
who at any time has custody, control
or possession
of any Collateral, acknowledges that upon and during the
continuance of
an Event of Default it holds and will hold
possession of the
Collateral for the benefit of Agent and Lenders and will follow all
instructions
of Agent with respect thereto.
"Commitment" shall
mean, at any time, as to each Lender,
the principal amount
set forth next to such Lender's name on Schedule 4 hereto
designated as the
Commitment or on
Schedule 1 to the Assignment and Acceptance Agreement pursuant
to which such Lender became a Lender hereunder in accordance with
the provisions
of Section
13.6 hereof, as the same may be adjusted from time to time
in
accordance with
the terms hereof; sometimes being collectively referred to
herein as "Commitments".
"Credit Facility"
shall mean the Loans and Letter of Credit
Accommodations
provided to
or for the benefit of Borrower pursuant to
Sections 2.1 and 2.2
hereof.
"Default" shall mean
an act, condition or event which with notice or passage of
time or both would constitute an Event of Default.
"Defaulting Lender"
shall have the meaning set forth in Section 6.10(d) hereof.
"Deposit Account
Control Agreement" shall mean an agreement in writing, in form
and substance
reasonably satisfactory to Agent, by and among Agent, Borrower
or
a Guarantor
with a deposit account at any bank and the bank at which
such
deposit account
is at any time maintained which provides
that such bank will
comply with
instructions originated by Agent directing disposition of the
funds
in the deposit account without further consent by Borrower or such
Guarantor and
such other terms and conditions as Agent may reasonably require,
including as to
any such agreement with respect to any Blocked Account, providing
that all items
received or deposited
in the Blocked Accounts are collateral for the benefit of
Agent, and
that the bank has no lien upon, or right to setoff
against, the
Blocked Accounts.
"EBITDA" shall
mean, for any period, with respect to Borrower and
its
Subsidiaries on
a consolidated basis for such period, net income for such
period,
PLUS (a) without
duplication and to the extent deducted in determining such net
income, the
sum of
(i) Interest Expense, accretion of original issue discount,
amortization of debt
issuance costs and any other fees and costs under any Financing
Agreement or any
prior financing
agreement,
(ii) income
tax expense,
(iii) depreciation
and amortization,
(iv)
any non-recurring fees, cash charges
and other cash expenses made or
incurred in
connection
with this Agreement, the Indenture or
the Acquisition
Agreement that
were paid or otherwise accounted for within 90 days of the
consummation of
such transactions,
(v)
non-cash losses from equity investments,
(vi) any extraordinary losses in accordance with GAAP,
(vii ) charges related to the Management Services Agreement,
(viii) unusual
or non-recurring fees, cash charges and other cash
expenses
deducted in such period in computing net income (including costs
associated with
the closure
or consolidation of facilities and operations and other
restructuring charges
or reserves, such as, but not limited to, retention,
severance and
contract termination costs); in an aggregate amount
under this
clause (viii) not to exceed (A) $2,000,000 in any Fiscal Year and
(B) $4,000,000
in the aggregate,
(ix) any non-recurring fees, cash charges and other cash expenses made or
incurred in
connection
with any equity offering or any issuance or other
disposition of
Indebtedness,
investment or acquisition permitted hereunder (in
each case,
whether or not consummated),
(x) any non-cash compensation charges,
including any such charges arising from
stock options,
restricted
stock grants or other equity-incentive
programs,
(xi) any other non-cash charges (including
goodwill or other asset impairment
charges),
(xii) dividends
required to be recorded as compensation
expenses under GAAP,
(xiii) any
non-cash charges as a result of the application of
purchase
accounting (including,
for example, the amortization of inventory
step-up to
fair value
within cost of sales),
(xiv) the cumulative effect of changes in accounting principles,
(xv)
losses in connection with an asset sale or disposition, and
(xvi) any unrealized losses arising from hedging transactions,
MINUS (b) without duplication
(i)
all cash payments made during such period that are not otherwise
5
<PAGE>
reflected in
net income for such
period, to the extent that such cash payments
reflect non-cash,
non-recurring
charges that were previously added back to
EBITDA in a prior period,
(ii)
to the extent included
in determining net income for such period, any
extraordinary gains
for such period (including any gains
associated with the
disposition of
assets (other than Inventory sold in the ordinary course of
business) or
the purchase and retirement of securities subject to the
Indenture),
(iii) interest
income,
(iv) income
tax credits, and
(v)
any unrealized gains arising from hedging transactions.
"Eligible Accounts"
shall mean Accounts (other than Eligible
Export-Related
Accounts Receivable) created by Borrower which are and continue to
be acceptable
to Agent based on the criteria set forth below as
determined by Agent in good
faith. In general, Accounts (other than Eligible Export-Related Accounts
Receivable) shall
be Eligible Accounts if:
(a)
such
Accounts arise from the actual and bona fide sale and delivery
of goods by Borrower or rendition of services by Borrower in the
ordinary course
of its business, which transactions are completed
substantially in accordance
with the terms and provisions contained in any documents governing such
transaction;
(b)
such Accounts
are not unpaid for more than sixty (60) days past
the
original due
date for them;
(c)
such Accounts
are not unpaid more than (i) ninety
(90) days after the
date of the original
invoice for them or (ii) one hundred fifty (150) days from
the original invoice date thereof for Accounts with special dating
terms arising
under existing
programs of Borrower set forth on Part I of Schedule 5 hereto
or
such other
programs which are otherwise approved by Agent in
writing in its
reasonable credit
judgment;
(d)
such Accounts comply
with the terms and conditions contained in Section
7.2(b) of this Agreement;
(e)
such Accounts
do not arise from
sales on consignment, guaranteed sale,
sale and return, sale on approval, or other terms under
which payment by the
account debtor
may be conditional or contingent;
(f)
the chief executive office or principal place of business of the
account
debtor with respect to
such Accounts is located in the United States of America
or Canada (provided, that at any time promptly upon
Agent's request, Borrower
--------
shall execute
and deliver, or cause to be executed and
delivered, such other
agreements, documents
and instruments as may be reasonably required by Agent to
perfect the
security interests of
Agent in those Accounts of an account debtor
with its chief executive office or principal place of business in
Canada in
accordance with
the applicable laws of the Province of Canada in which
such
chief executive office
or principal place of business is located and shall take
6
<PAGE>
or cause to be taken such other and further actions as
Agent may reasonably
request to enable
Agent, as secured party with respect thereto, to collect such
Accounts under
the applicable Federal or Provincial laws of Canada) or,
at
Agent's option, if the chief executive office and principal place
of business of
the account
debtor with respect to such Accounts is
located other than in the
United States
of America or Canada,
then if either: (i) the account debtor has
delivered to
Borrower an
irrevocable letter of credit issued or confirmed by a
bank reasonably
satisfactory to Agent
and payable only in the United States of
America and
in U.S. dollars, sufficient to cover such Account, in form
and
substance satisfactory
to Agent and if reasonably required by Agent, the
original of
such letter of credit
has been delivered to Agent or Agent's agent
and the issuer thereof, and Borrower have complied with
the terms of Section
5.2(f) hereof
with respect to the
assignment of the proceeds of such letter of
credit to Agent or naming Agent as
transferee beneficiary thereunder, as Agent
may specify,
or (ii) such Account is subject to credit
insurance payable to
Agent issued
by an insurer and on
terms and in an amount reasonably acceptable
to Agent, or (iii) such Account is otherwise reasonably acceptable in
all
material respects to Agent (subject to such lending formula with
respect thereto
as Agent may reasonably determine);
(g)
such Accounts
do not consist of progress billings (such that the
obligation of
the account debtors
with respect to such Accounts is conditioned
upon Borrower's
satisfactory
completion
of any further
performance under the
agreement giving
rise thereto), bill and hold invoices
or retainage invoices,
except as to bill and hold invoices, if
Agent shall have received an agreement
in writing
from the account debtor, in form and substance reasonably
satisfactory to
Agent, confirming the unconditional
obligation of the account
debtor to take the goods related thereto and to pay such invoice;
(h)
the account
debtor with respect to such Accounts has not asserted
a
counterclaim, defense
or dispute and does not have, and does not engage
in
transactions which
may give rise to any right of setoff
or recoupment against
such Accounts (but the
portion of the Accounts of such account debtor in excess
of the amount at any time and from time to time owed by Borrower to
such account
debtor or claimed owed
by such account debtor shall be deemed Eligible Accounts
to the extent the same would otherwise be Eligible Accounts hereunder),
(i)
there are no facts, events or occurrences which could
reasonably be
expected to
impair the validity, enforceability or collectability of such
Accounts or
reduce the amount payable or delay payment thereunder;
(j)
such Accounts
are subject to the first priority, valid and
perfected
security interest
of Agent and any goods
giving rise thereto are not, and were
not at the time of the sale thereof, subject to any liens except
those permitted
in this Agreement;
(k)
neither the
account debtor nor any officer or employee
of the account
debtor with
respect to such Accounts is an officer,
employee, agent or other
Affiliate of
Borrower or any Guarantor except as set forth on Part II of
Schedule 5
hereto or as otherwise approved by Agent in writing;
(l)
the account
debtors with respect to such Accounts are
not any foreign
government, the
United States of America, any State, political
subdivision,
department, agency
or instrumentality
thereof, unless, (i) a letter of credit,
7
<PAGE>
in form and substance reasonably
satisfactory to Agent, has been obtained with
respect to such Account and account debtor, or (ii) if the account
debtor is the
United States
of America, any State,
political subdivision, department, agency
or instrumentality
thereof, upon Agent's request, the Federal Assignment
of
Claims Act of 1940, as amended or any similar State or local law,
if applicable,
has been complied with in a manner reasonably satisfactory to Agent;
(m)
there are no proceedings or actions which
are threatened in writing or
pending against
the account debtors with respect to
such Accounts which could
reasonably be
expected to result in any material adverse change in
any such
account debtor's
financial condition (including, without limitation, any
bankruptcy,
dissolution,
liquidation,
reorganization or
similar proceeding);
(n)
such Accounts
are not evidenced by or arising under
any instrument or
chattel paper;
(o)
the aggregate
amount of such
Accounts owing by a single account debtor
does not constitute more than ten (10%)
percent of the aggregate amount of all
otherwise Eligible
Accounts (but the
portion of such Accounts not in excess of
ten (10%) percent shall be deemed Eligible Accounts to the extent
the same would
otherwise be
Eligible Accounts hereunder);
(p)
such Accounts are not
owed by an account debtor who has Accounts unpaid
more than the number of days set forth in clauses (b) and (c) of
this definition
after the original due date or invoice date therefor, as
applicable, which
collectively
constitute more than
fifty (50%) percent of the total Accounts of
such account
debtor;
(q) the account debtor is not located in a state
requiring the filing of a
Notice of Business Activities Report or similar report in order to permit
Borrower to seek
judicial enforcement in such State of payment of such Account,
unless Borrower has qualified to do business in such state or has
filed a Notice
of Business Activities
Report or equivalent report for the then current year or
such failure
to file and inability to seek
judicial enforcement is capable of
being remedied
without any material delay or material cost; and
(r)
such Accounts are owed
by account debtors determined to be creditworthy
at all times by Agent acting in good
faith and in accordance with commercially
reasonable
standards.
The criteria for
Eligible Accounts set forth above may only be changed, and any
new criteria
for Eligible Accounts may only be established,
by Agent in good
faith based
on either: (i) an event, condition or other
circumstance arising
after the date hereof, or (ii) an event, condition or other
circumstance
existing on
the date hereof to the
extent Agent has no written notice or other
actual knowledge
thereof from Borrower prior to the date hereof
that, in the
good faith
determination
of Agent, in either case under clause (i) or
(ii),
materially adversely
affects or could reasonably be expected to materially
adversely affect
the Accounts. Any Accounts which are not Eligible
Accounts
shall nevertheless
be part of the Collateral.
"Eligible Equipment"
shall mean Equipment
of Borrower which (a) have been
appraised by
an appraiser reasonably acceptable to
Agent and which appraisals
are reasonably
satisfactory
to Agent as to form, scope and methodology in
accordance with
Section 7.4(a), (b) do not consist of fixtures, (c) can
be
8
<PAGE>
readily removed
from the Real Property unless Agent
also has a first priority
perfected lien
on such Real Property or otherwise has a Collateral
Access
Agreement with all necessary parties permitting the removal
thereof, (d) are not
leased, worn-out
or obsolete, (e) are
subject to the first priority, valid and
perfected security
interest of Agent and
are subject to no other liens, except
for liens described in Section 9.8(b), (c) and (i), and (f) are located
on
properties which
are owned by Borrower or as to which the lessor or
other
operator of
any such property has executed a Collateral Access
Agreement in
favor of Agent.
New criteria for
Eligible Equipment acquired after the Closing
Date may be established by Agent in good faith based on either an
event,
condition or
other circumstance arising with respect to any Equipment
which
materially adversely
affects or could reasonably be expected to materially
adversely affect
the Equipment.
"Eligible
Export-Related
Accounts Receivable" shall have the meaning set forth
in the Exim Borrower Agreement.
"Eligible
Export-Related
Inventory" shall
have the meaning set forth in the
Exim Borrower
Agreement.
"Eligible Inventory"
shall mean, as to of Borrower, Inventory of
Borrower
consisting of
finished goods held for resale in the ordinary course of
the
business of Borrower, raw materials for such finished goods and
work-in-process,
in each case unless the same are not
acceptable to Agent based on the criteria
set forth below as determined by Agent in good faith.
In general,
Eligible
Inventory shall
not include:
(a)
spare parts for
equipment other than Inventory consisting of spare
parts held
for sale to customers;
(b)
packaging and
shipping materials not specifically identified as a
component of
any finished goods;
(c)
supplies used
or consumed in Borrower's business;
(d)
Inventory at premises other than those owned and controlled by
Borrower,
except that
any Inventory which would otherwise be deemed
Eligible Inventory
that is not located at
premises owned and operated by Borrower may nevertheless
be considered
Eligible Inventory:
(i)
as
to locations which are leased by
Borrower, if Agent shall have
received a
Collateral
Access Agreement from the owner and lessor of such
location, duly
authorized, executed
and delivered by such owner and lessor (or
such lease provides Agent with substantially the same rights as
Agent would have
under a Collateral Access Agreement), or
if Agent shall not have received such
Collateral Access
Agreement (or Agent shall determine to accept a
Collateral
Access Agreement that
does not include all required provisions or provisions in
the form otherwise required by Agent), Agent may, at
its option, nevertheless
consider Inventory at such location to be Eligible Inventory to the
extent Agent
shall have
established such
Reserves in respect of amounts at any time payable
by Borrower
to the owner and lessor thereof as Agent shall reasonably
determine, and
9
<PAGE>
(ii)
as
to any location owned
or operated by a third party (other than
consignment locations
under clause (i) below), if Agent shall
have received a
Collateral Access
Agreement from such owner or operator with
respect to such
location to
the extent the Value
of Inventory at such location is in excess of
$100,000 or
if Agent has requested a Collateral Access Agreement for
such
location during the
existence of a Trigger Event, in each case duly authorized,
executed and
delivered by such owner and operator or if
Agent shall not have
received such
Collateral Access Agreement (or Agent shall determine to accept
a
Collateral Access
Agreement that does not include all required
provisions or
provisions in
the form otherwise
required by Agent), Agent may, at its option,
nevertheless consider Inventory at such location to be Eligible
Inventory to the
extent Agent
shall have established
such Reserves in respect of amounts at any
time payable
by Borrower to the owner and operator thereof as Agent
shall
reasonably determine, and in addition, if required by Agent, if
Agent shall have
received: (A)
UCC financing statements between the owner and operator, as
consignee or bailee
and Borrower, as consignor or bailor, in form and substance
satisfactory to Agent, which are duly assigned to Agent and (B) a
written notice
to any lender to the
owner and operator of the first priority security interest
in such Inventory of Agent;
(e)
Inventory subject to a
security interest or lien in favor of any Person
other than Agent
except those permitted in this Agreement (but without limiting
the right of Agent to establish any Reserves
in accordance with the definition
of the term "Reserves" herein with
respect to amounts secured by such security
interest or
lien in favor of any Person even if permitted herein);
(f)
bill and hold goods; unserviceable, obsolete or slow moving
Inventory or
crib Inventory;
(g)
Inventory which
is not subject to the first priority, valid and
perfected security
interest of Agent;
(h)
returned, damaged
and/or defective Inventory;
(i)
Inventory purchased or sold on consignment (excluding augers)
unless, in
the case of Inventory sold on consignment, the
requirements of Section 5.2(j)
with respect to such
consigned Inventory are satisfied; provided, that if Agent
--------
shall not have received a Collateral Access Agreement from
the consignee in
accordance with
Section 5.2(j), such consigned Inventory shall be considered to
be Eligible
Inventory to the
extent the Value of such Inventory, together with
the Value of all other
consigned Inventory at any location without a Collateral
Access Agreement,
is less than $250,000
and no Trigger Event exists; provided,
--------
that Agent may, at its option, nevertheless consider such consigned
Inventory to
be Eligible
Inventory to the
extent Agent shall have established such Reserves
as Agent shall determine;
(j)
Inventory that
qualifies as Eligible Export-Related Inventory;
(k)
Inventory consisting
of augers sold on consignment or any similar
arrangement with
Borrower's dealers;
provided, that the same shall be Eligible
--------
Inventory only
to the extent that (x) with respect to any location, the
10
<PAGE>
requirements of
Section 5.2(j) are satisfied with respect to such location
(without regard
to the $250,000 exception therein) within 90 days
after the
Closing Date (or if not within 90 days, then the same shall cease
to be Eligible
Inventory until
such requirements are satisfied), (y) the value of such
Inventory at
any single location that may be included in the
Borrowing Base
shall not exceed $100,000 per location and
(z) the value of all such Inventory
that may be included in the Borrowing Base shall not
exceed $650,000 for all
locations;
(l)
Inventory located
outside the United States of America; and
(m)
Inventory which
has been returned or repurchased under any
warranty
issued by Borrower.
The criteria for
Eligible Inventory set forth above may only be changed and any
new criteria
for Eligible Inventory may only be established
by Agent in good
faith based
on either: (i) an event, condition or other
circumstance arising
after the date hereof, or (ii) an event, condition or other
circumstance
existing on
the date hereof to the
extent Agent has no written notice or other
actual knowledge
thereof from Borrower prior to the date
hereof, that, in the
good faith
determination
of Agent, in either case under clause (i) or
(ii)
materially adversely
affects or could reasonably be expected to materially
adversely affect
the Inventory.
Any Inventory which is
not Eligible Inventory
shall nevertheless
be part of the Collateral.
"Eligible Real
Property" shall mean
Real Property of Borrower (i) subject
to a Mortgage pursuant to which Agent has been
granted a valid first mortgage
lien in such Real Property subject to no other liens except
as described in
Section 9.8(b),
(c), (d) and (i) and (ii) as to which Agent
has received, in
each case, in form and substance satisfactory to Agent (A) a valid
and effective
title policy
(or binding commitment to issue the
same) insuring such Mortgage
meeting the requirements set forth in Section 4.1(n), (B) an
environmental audit
meeting the
requirements set forth in Section 4.1(m) and (C) written
appraisals
meeting the
requirements
set forth in Section 7.4(a) or (iii) which has
otherwise been
approved by Agent for inclusion in the
Borrowing Base prior to
the date hereof.
"Eligible Transferee"
shall mean (a) any
Lender; (b) the parent company of any
Lender and/or any Affiliate of such Lender which is at least fifty
(50%) percent
owned by such Lender or its parent company; (c) any person (whether a
corporation, partnership, trust or otherwise) that is engaged in
the business of
making, purchasing,
holding or otherwise investing in bank loans
and similar
extensions of credit
in the ordinary course of its business and is administered
or managed
by a Lender or with respect to any Lender that is a
fund which
invests in
bank loans and similar extensions of credit, any
other fund that
invests in
bank loans and similar extensions of credit
and is managed by the
same investment
advisor as such Lender or by an Affiliate of
such investment
advisor, and
in each case is approved by Agent; and (d)
any other commercial
bank, financial institution or "accredited investor" (as defined in
Regulation D
under the Securities Act of 1933) approved by Agent, provided,
that, (i) neither
Borrower nor
any Guarantor or any
Affiliate of Borrower or any Guarantor shall
qualify as
an Eligible Transferee and (ii) no
Person to whom any Indebtedness
which is in any way subordinated in right
of payment to any other Indebtedness
of Borrower or any
Guarantor shall qualify as an Eligible Transferee, except as
Agent may otherwise specifically agree.
11
<PAGE>
"Enforcement Action"shall mean the exercise by Agent in good faith
of any of its
material enforcement
rights and remedies as a secured creditor hereunder
or
under the other Financing Agreements, applicable
law or otherwise at any time
following the
occurrence
and during the continuance of an Event of
Default
(including, without
limitation, the demand
for the immediate payment of all of
the Obligations,
the solicitation of bids from third parties to conduct
the
liquidation of
the Collateral, the engagement or retention of
sales brokers,
marketing agents,
investment
bankers, accountants,
appraisers, auctioneers or
other third
parties for the purposes of valuing, marketing, promoting
and
selling the
Collateral,
the commencement of any action to foreclose on the
security interests
or liens of Agent in all or any material portion of
the
Collateral,
notification of
account debtors to make payments to Agent, any
action to take possession of all or any material
portion of the Collateral or
commencement of any
legal proceedings or actions against or with respect to all
or any portion of the Collateral).
"Environmental Laws"
shall mean all foreign, Federal, State and local
laws,
legislation, rules,
codes, licenses,
permits (including any conditions imposed
therein),
authorizations,
judicial or administrative decisions, injunctions or
agreements between Borrower or any Guarantor and any Governmental
Authority, (a)
relating to
pollution and the protection, preservation or
restoration of the
environment (including
air, water vapor,
surface water, ground water, drinking
water, drinking
water supply, surface land, subsurface
land, plant and animal
life or any other natural resource), or to human health or safety,
(b) relating
to the exposure to, or the use, storage, recycling,
treatment, generation,
manufacture,
processing,
distribution,
transportation,
handling,
labeling,
production, release or
disposal, or threatened release, of Hazardous Materials,
or (c) relating to all laws with regard to recordkeeping, notification,
disclosure and
reporting requirements respecting Hazardous Materials. The term
"Environmental Laws"
includes (i) the Federal Comprehensive Environmental
Response, Compensation
and Liability Act of 1980, the Federal Superfund
Amendments and
Reauthorization Act,
the Federal Water Pollution Control Act of
1972, the Federal Clean Water Act, the Federal Clean Air Act, the
Federal
Resource Conservation
and Recovery Act of 1976 (including the Hazardous
and
Solid Waste
Amendments
thereto), the Federal Solid Waste Disposal and the
Federal Toxic
Substances
Control Act, the Federal Insecticide,
Fungicide and
Rodenticide Act,
and the Federal Safe Drinking Water Act of 1974 and (ii)
applicable state
counterparts
to such laws.
"Equipment" shall
mean, as to Borrower or any Guarantor,
all of Borrower's or
such Guarantor's
now owned and
hereafter acquired equipment, wherever located,
including machinery,
data processing and computer equipment
(whether owned or
licensed and including embedded software), vehicles, tools,
furniture, fixtures,
all attachments,
accessions
and property now or hereafter affixed
thereto or
used in connection therewith, and substitutions and replacements thereof,
wherever located.
"Equipment Sublimit" shall have the meaning set forth in the
definition of Fixed
Asset Amount.
"Equity Sponsor"
means Charlesbank Capital Partners LLC.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, together
with all rules, regulations and
interpretations thereunder or related thereto.
"ERISA Affiliate" shall mean any person required to be aggregated
with Borrower,
any Guarantor
or any of its or their respective
Subsidiaries under Sections
414(b), 414(c),
414(m) or 414(o) of the Code.
"ERISA Event"
shall mean (a) any "reportable event", as defined in
Section
4043(c) of ERISA or the regulations issued thereunder other than
those events as
to which notice is waived by regulation, with respect to a Plan; (b) the
adoption of any amendment to a Plan that would require the
provision of security
pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA;
(c) the
existence with
respect to any Plan of an "accumulated
funding deficiency" (as
defined in
Section 412 of the Code or Section 302 of ERISA),
whether or not
waived; (d) the filing
pursuant to Section 412 of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard
with
respect to
any Plan; (e) the occurrence of a "prohibited
transaction" with
respect to
which Borrower, any Guarantor or any of its or their
respective
Subsidiaries is
a "disqualified
person" (within the meaning of Section 4975 of
the Code) or with respect to which Borrower, any Guarantor
or any of its or
their respective
Subsidiaries
could otherwise reasonably be expected
to have
material liability;
(f) a complete or partial withdrawal by Borrower, any
Guarantor or
any ERISA Affiliate from a Multiemployer
Plan or a cessation of
operations which
is treated as such a withdrawal or notification that a
Multiemployer Plan is in reorganization; (g) the filing of a notice
of intent to
terminate, the treatment of a Plan amendment as a termination under
Section 4041
or 4041A of ERISA, or the commencement of proceedings
by the Pension Benefit
Guaranty Corporation
to terminate a Plan; (h) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of
ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; and (i)
the imposition of any
liability under Title IV of ERISA, other than the Pension
Benefit Guaranty
Corporation premiums due but not delinquent under Section 4007
of ERISA, upon Borrower, any Guarantor or any ERISA Affiliate in excess
of
$500,000.
"Eurodollar Rate"
shall mean, with
respect to any Eurodollar Rate Loan for the
Interest Period
applicable
thereto, the rate of interest per annum
(rounded
upwards, if
necessary,
to the nearest 1/100
of 1%) appearing on Telerate Page
3750 (or any successor page) as the London
interbank offered rate for deposits
in U.S. Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days
prior to the first day of such Interest Period for a
term comparable to such
Interest Period;
provided, that, if more than one rate is specified on Telerate
--------- -----
Page 3750,
the applicable rate
shall be the arithmetic mean of all such rates.
If, for any reason, such rate is not available, the term
"Eurodollar Rate" shall
mean, with
respect to any Eurodollar Rate Loan for the Interest Period
applicable thereto,
the rate of interest per annum (rounded upwards, if
necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at
approximately 11:00
A.M. (London
time) two (2) Business Days prior to the first day of such
Interest Period
for a term comparable to such Interest Period; provided,
however, if
more than one rate is specified on Reuters
Screen LIBO Page, the
applicable rate
shall be the arithmetic mean of all such rates.
"Eurodollar Rate
Loans" shall mean any Loans or portion thereof on which
interest is payable based on the Adjusted Eurodollar Rate in
accordance with the
terms hereof.
"Event of Default" shall mean the occurrence or existence of any event or
condition described
in Section 10.1 hereof.
12
<PAGE>
"Excess Availability"
shall mean the amount, calculated at any
date, equal to
(a) Non-Exim
Excess Availability as of such date plus, to the
extent all the
----
conditions set
forth in Section 4.3 hereof are satisfied, (b) Exim Excess
Availability as
of such date, minus (c) the aggregate amount of all then
-----
outstanding and
unpaid trade payables of Borrower which are
outstanding more
than sixty
(60) days past due as
of such time (other than trade payables being
contested or
disputed by Borrower in good faith).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all
rules, regulations
and interpretations thereunder or related thereto.
"Exim" shall
mean Export-Import Bank of the United States.
"Exim Borrower
Agreement"
shall mean that certain Borrower Agreement,
among
Borrower, Agent
and Exim, as modified by any applicable loan
authorization
agreements and
by any waivers approved by Agent and Exim, and as
otherwise
amended or
modified from time to time.
"Exim Excess
Availability" shall
mean the amount calculated at any date, equal
to: (a) the lesser of: (i) the Export-Related Borrowing Base and
(ii) the
lesser of:
(A) the Maximum Exim
Revolving Credit and (B) the Maximum Revolving
Credit less
the outstanding amount of Non-Exim Revolving Loans and
Non-Exim
Letter of Credit Accommodations, minus (b) the
amount of all then outstanding
-----
and unpaid
Exim Revolving Loans and Exim Letter of Credit
Accommodations.
"Exim Facility"
shall mean the Exim Revolving Loans and the Exim
Letter of
Credit Accommodations
provided under this Agreement to the extent all the
conditions under
Section 4.3 have been satisfied.
"Exim Guarantee" shall mean the Master Guaranty Agreement issued by
Exim in form
and substance
reasonably
satisfactory to Agent
which guarantees to Agent, for
the benefit
of the Lenders, the
outstanding amount of any Exim Revolving Loans
and/or Exim Letter of Credit Accommodations (or such portion
thereof as shall be
acceptable to
Agent and Required Lenders).
"Exim Guarantee
Documents"
shall mean, collectively, the Exim Borrower
Agreement, the
Exim Guarantee, and all other agreements, documents and
instruments executed
in connection herewith or with the Prior Loan Agreement or
at any time hereafter executed and/or delivered by Exim, Agent,
any Lender,
Borrower or any
Obligor in connection with the Exim Borrower Agreement and Exim
Guarantee, in
each case as amended or otherwise modified from
time to time.
"Exim Letter of Credit Accommodations" shall mean, collectively,
(a) the letters
of credit, merchandise
purchase or other guaranties which are from time to time
either issued
or opened by Agent or any Lender for
the account of Borrower or
any Obligor
or (b) with respect to which Agent or Lenders have agreed
to
indemnify the issuer
or guaranteed to the issuer the performance by Borrower or
any Obligor
of its obligations to such issuer; sometimes being
referred to
herein individually as an "Exim Letter of Credit Accommodation", in
each case as
provided under
Section 2.2(a)(ii)
hereof and in each case supported by an Exim
Guarantee.
13
<PAGE>
"Exim Primary
Collateral" shall mean
the Collateral designated under the terms
of the Exim Guarantee
Documents as constituting primary collateral securing the
Exim Revolving
Loans and the Exim Letter of Credit Accommodations.
"Exim Revolving
Loans" shall mean the loans now or hereafter made by or
on
behalf of any Lender or by Agent for the account
of any Lender on a revolving
basis pursuant
to the Credit Facility (involving advances, repayments and
readvances) as set forth in Section 2.1(b) hereof and which are
supported by the
Exim Guarantee.
"Export-Related
Borrowing Base" shall
mean the "Export-Related Borrowing Base"
(as defined
in the Exim Borrower Agreement) less
such Reserves as Agent shall
establish under
clause (d) of the definition of "Reserves" herein.
"Export-Related
Account Receivable"
shall have the meaning set forth in the
Exim Borrower
Agreement.
"Export-Related Inventory" shall have the meaning set forth in the
Exim Borrower
Agreement.
"Fair Market
Value" shall mean the
value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not
involving distress or
necessity of either party, determined in good faith by the Board of
Directors of
Borrower.
"Fee Letter"
shall mean the letter agreement, dated as of the date
hereof,
between Borrower
and Agent, setting forth certain fees
payable by Borrower to
Agent for the benefit of itself and Lenders, as the case may be, as
the same now
exists or may hereafter be amended,
modified, supplemented, extended, renewed,
restated or
replaced.
"Financing Agreements"
shall mean, collectively, this Agreement, the Fee Letter
and all notes, guarantees, security agreements, mortgages, deeds of trust,
deposit account
control agreements, investment property control agreements,
intercreditor
agreements and
all other agreements, documents and
instruments
executed and/or
delivered in connection with this Agreement
(or in connection
with the Prior Loan Agreement if assigned to Agent) or
at any time hereafter
executed and/or
delivered by Borrower or any Obligor in
connection with this
Agreement and
including,
without limitation, the Exim Guarantee Documents.
"Fiscal Month"
shall mean, for any
Fiscal Year of Borrower, each of the twelve
one-month periods
set forth for such Fiscal Year on Schedule 6
hereto, which
schedule shall
be updated by Borrower
on the first Business Day of December of
each Fiscal
Year (commencing on
December 1, 2005) to reflect the twelve Fiscal
Months for
the immediately following Fiscal Year.
"Fiscal Quarter"
means for each Fiscal
Year the periods ending and dates which
are thirteen
(13), twenty-six (26), thirty-nine (39)
and fifty-two (52) weeks
following the
prior Fiscal Year end.
"Fiscal Year"
means the twelve (12)
month period ending on December 31 of each
calendar year.
14
<PAGE>
"Fixed Asset
Acquisition
Sublimit" shall mean $3,000,000 per Fiscal Year.
"Fixed Asset
Acquisition
Value" shall mean, as of any date of
determination,
with respect
to any Equipment acquired by Borrower
after the date hereof for
which Borrower
has notified Agent of its desire to include in the
Borrowing
Base, the amount equal to, at Borrower's election, either (a)
seventy-five
percent (75%)
of the Hard Cost of such Equipment or (b)
eighty-five percent
(85%) of the appraised
Net Orderly Liquidation Value of such Equipment, in each
case provided
that such Equipment satisfies all the criteria of Eligible
Equipment (except
for clause (a) of the definition thereof in
the case where
option (a)
is elected), as such amount shall be reduced from time to
time
pursuant to
Section 2.4; provided, that in no event
shall the aggregate Fixed
--------
Acquisition Value
included in the
Borrowing Base in any Fiscal Year exceed the
Fixed Asset
Sublimit. Notwithstanding the foregoing, if
Borrower acquires any
new Equipment for the purpose of either (x) replacing Equipment
that was damaged
or destroyed and Borrower uses proceeds of insurance to make such
acquisition in
accordance with
Section 9.5 or (y) replacing Equipment that was sold and
Borrower uses
proceeds of such sold Equipment to make such acquisition in
accordance with
Section 9.7(b)(ii),
then to the extent Borrower notifies Agent
of its intent to include such Equipment in the Borrowing Base, only
that portion
of the Fixed Asset
Acquisition Value of such Equipment in excess of the portion
of the Borrowing Base
that was allocable to the Equipment so damaged, destroyed
or sold shall be counted toward the Fixed Asset Acquisition
Sublimit in the
applicable Fiscal
Year.
"Fixed Asset Amount"
shall mean, as of any date of determination, the lesser of
(a) $20,000,000;
or (b) the sum of (x) eighty-five percent (85%) of the
appraised Net
Orderly Liquidation Value of Eligible Equipment as
determined
pursuant to the most recently delivered appraisal received by Agent
prior to the
date hereof
(the "Equipment Sublimit") plus (y)
seventy-five percent (75%) of
the appraised Fair Market Value of Eligible Real Property as
determined pursuant
to the most recently delivered appraisal received by
Agent prior to the date
hereof (the "Real Property Sublimit"), in each case under clause
(b), as reduced
from time to time pursuant to Section 2.4.
"Fixed Charge
Coverage Ratio" shall mean, with respect to Borrower and
its
Subsidiaries on a
consolidated basis for any fiscal period, the ratio of EBITDA
to Fixed Charges.
"Fixed Charges"
shall mean, with
respect to Borrower and its Subsidiaries on a
--------------
consolidated basis
for any fiscal period, without duplication,
(a) the aggregate of all Interest Expense paid or
required to be paid in such
period in cash,
PLUS (b) regularly scheduled principal payments, regularly
scheduled capital
lease payments and
regularly scheduled redemption obligations in respect of any
Indebtedness of
Borrower and its Subsidiaries paid or required
to be paid in
cash during
such period,
PLUS (c)scheduled
reductions
to the Fixed Asset Amount and Fixed Asset
Acquisition Value
pursuant to Section 2.4;
PLUS (d) all capital expenditures determined in accordance with
GAAP made during
such period (other than (i) capital expenditures that are financed
with proceeds
15
<PAGE>
of Indebtedness
for borrowed money
except for Loans, (ii) capital expenditures
that result
in an increase in the Fixed Asset Acquisition Value and
(iii)
capital expenditures
that are made using the cash proceeds of asset sales
permitted under
Section 9.7(b), in
each case to the extent not included in the
calculation of
EBITDA for such period);
PLUS (e) federal, state, local and foreign taxes, paid or required
to be paid in
such period
in cash;
PLUS (f) cash payments made under the Management Services Agreement.
"Foreign Subsidiary"
shall mean any Subsidiary of Borrower organized outside of
the United
States.
"GAAP" shall
mean generally accepted accounting principles set forth in
the
statements and
pronouncements of the Financial Accounting Standards Board or
in
such other
statements
by such other entity as have been approved by a
significant segment
of the accounting profession, which are
in effect on the
date hereof.
"Governmental
Authority" shall
mean any nation or government, any state,
province, or
other political
subdivision thereof, any central bank (or similar
monetary or regulatory
authority) thereof, and any entity exercising executive,
legislative, judicial,
regulatory or
administrative functions of or pertaining
to government.
"GSI Intellectual
Property" shall mean the Intellectual Property listed
in
Schedule 8.11 to the
Information Certificate that is material to the businesses
of Borrower
and each Guarantor as of the date of this Agreement.
"Guarantor(s)" shall have the meaning set forth in the Preamble
hereof and shall
include any other
Subsidiary of Borrower that executes a guaranty of any or all
of the Obligations in favor of Agent.
"Hard Cost"
shall mean, with
respect to the purchase by Borrower of an item of
Equipment, the
cash amount actually paid, and the value of any property
exchanged, to
acquire title to such
item, net of all incentives, discounts and
rebates, and
exclusive of freight, delivery charges, installation
costs and
charges, warranty
costs, taxes and insurances and other incidental
costs or
expenses and
all indirect costs or
expenses of any kind incurred in connection
with such purchase.
"Hazardous Materials"
shall mean any
hazardous, toxic or dangerous substances,
materials and
wastes, including
hydrocarbons (including naturally occurring or
man-made petroleum
and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde
insulation,
radioactive materials,
biological
substances,
polychlorinated biphenyls, pesticides, herbicides and any other
kind and/or type
of pollutants
or contaminants (including materials which include hazardous
constituents), sewage,
sludge, industrial slag, solvents and/or any other
similar substances,
materials,
or wastes and including any other
substances,
materials or
wastes that are regulated under any
Environmental Law (including
any that are classified as hazardous or toxic under any
Environmental Law).
"Holdings" shall
have the meaning set forth in the preamble hereto.
16
<PAGE>
"Indebtedness" shall mean, with respect to any Person, any
liability, whether or
not contingent, (a) in respect of borrowed money (whether or not
the recourse of
the lender
is to the whole of the assets of such
Person or only to a portion
thereof) or
evidenced by bonds, notes, debentures or
similar instruments; (b)
representing the
balance deferred and unpaid of the purchase price of any
property or
services (except any such balance that constitutes an account
payable to
a trade creditor (whether or not an
Affiliate) created, incurred,
assumed or guaranteed
by such Person in the ordinary course of business of such
Person in connection with obtaining goods, materials or
services that is not
overdue by
more than ninety (90) days, unless the trade payable is being
contested in good
faith); (c) all obligations as lessee under leases which have
been, or should be, in
accordance with GAAP recorded as Capital Leases; (d) any
contractual
obligation, contingent
or otherwise, of such Person to pay
or be
liable for
the payment of any indebtedness described in this
definition of
another Person,
including, without
limitation, any such indebtedness, directly
or indirectly guaranteed, or any agreement to purchase, repurchase,
or otherwise
acquire such
indebtedness, obligation or liability or any security therefor,
or
to provide funds for
the payment or discharge thereof, or to maintain solvency,
assets, level of
income, or other financial condition; (e) all obligations with
respect to
redeemable stock and
redemption or repurchase obligations under any
Capital Stock
or other equity securities issued by such Person; (f) all
reimbursement
obligations and other
liabilities of such Person with respect to
surety bonds
(whether bid, performance or otherwise), letters of credit,
banker's acceptances, drafts or similar documents or instruments
issued for such
Person's account; (g) all indebtedness of such Person in respect of
indebtedness
of another Person for borrowed money or indebtedness of another
Person otherwise
described in
this definition which
is secured by any consensual lien, security
interest, collateral
assignment,
conditional sale, mortgage, deed of trust, or
other encumbrance on
any asset of such Person, whether or not such obligations,
liabilities or
indebtedness are
assumed by or are a personal liability of such
Person, all
as of such time; (h)
all obligations, liabilities and indebtedness
of such Person (marked
to market) arising under swap agreements, cap agreements
and collar
agreements and other
agreements or arrangements designed to protect
such person
against fluctuations in interest rates or currency or
commodity
values; and
(i) all obligations owed by such Person
under License Agreements
with respect
to non-refundable,
advance or minimum guarantee royalty payments.
"Indenture" means
that certain Indenture dated as of May 16, 2005 among
Borrower, the
"Guarantors" party thereto and U.S. Bank National Association,
as
Trustee, as the same may be amended, restated or otherwise modified
from time to
time.
"Information Certificate" shall mean, collectively, the Information
Certificates
of Borrower
and Guarantors constituting Exhibit B hereto
containing material
information with
respect to Borrower,
Guarantors, their Subsidiaries and their
respective businesses and assets provided by Borrower and
Guarantors to Agent in
connection with
the preparation of this Agreement and the other Financing
Agreements and
the financing arrangements provided for herein.
"Insolvency Case"
shall mean, as to any Person, any of the
following: (i) any
case or proceeding with respect to such person under the Bankruptcy
Code, or any
other Federal,
State or other bankruptcy, insolvency,
reorganization or other
17
<PAGE>
law affecting
creditors' rights or any other or similar proceedings seeking
any
stay, reorganization,
arrangement,
composition
or readjustment of all or
substantially all of the obligations and indebtedness of such
person or (ii) any
proceeding seeking
the appointment of any receiver, trustee,
administrator,
liquidator, custodian
or other insolvency official with similar powers
with
respect to
such person or all or substantially all
of its assets or (iii) any
proceeding for
liquidation,
dissolution or other winding up of the business of
such person
or (iv) any general
assignment for the benefit of creditors or any
general marshaling
of all or substantially all of the assets
of such person.
"Insolvency Event"
shall mean the commencement of an Insolvency Case by or
against Borrower
or any Obligor.
"Intellectual
Property" shall
mean all patents, patent rights, patent
applications,
copyright rights,
works which are the subject matter of
copyrights, copyright
registrations and
registration applications, trademarks,
service marks,
trade names, trade styles, trademark and service mark
registrations and
registration applications and all goodwill symbolized by such
trademarks, service
marks, trade names and trade styles; all extensions,
renewals, reissues,
divisions,
continuations, and continuations-in-part of any
of the foregoing; all rights to sue for past,
present and future infringement
of, and to collect damages related thereto,
any of the foregoing; inventions,
trade secrets,
formulae, processes, compounds, drawings,
designs, blueprints,
surveys, reports,
manuals, operating standards; customer and other lists,
business plans,
domain names and domain name registrations; software and
contract rights
relating to computer software programs, and any other
proprietary information in whatever form created or maintained; and
all licenses
and rights
to use any and all of the foregoing. As to Borrower and each
Guarantor, the
term Intellectual Property shall mean only the Intellectual
Property now
owned or hereinafter acquired by Borrower or such Guarantor.
"Interest Expense"
shall mean, with respect to Borrower and its
Subsidiaries on
a consolidated basis for any fiscal period, cash interest
expense of
such Persons determined in accordance with GAAP for such
period.
"Interest Period"
shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), three (3) or six (6) months
duration as Borrower
may elect, the exact
duration to be determined in accordance with the customary
practice in the
applicable Eurodollar Rate market; provided, that, Borrower may
not elect an Interest Period which will end after the last day of the
then-current term
of this Agreement.
"Interest Rate"
shall mean:
(a)
Subject to
clauses (b) and (c) of this definition below:
(i)
as to Prime Rate Loans consisting of
Revolving Loans, a rate
equal to the Applicable Margin for Prime Rate Loans then in
effect plus the
Prime Rate,
(ii)
as to Eurodollar Rate Loans, a rate
equal to the Applicable
Margin for
Eurodollar
Rate Loans then in effect plus the
Adjusted Eurodollar
Rate (in each case, based on the Eurodollar Rate
applicable for the Interest
Period selected by Borrower, as in effect three (3) Business Days
after the date
of receipt by Agent of the request of Borrower for such Eurodollar
Rate Loans in
accordance with the
terms hereof, whether such rate is higher or lower than any
rate previously
quoted to Borrower), and
18
<PAGE>
(iii) as to fees for
Letter of Credit Accommodations, a rate equal
to the Applicable Margin for Letter of Credit
Accommodations then in effect;
(b)
If,
in any month commencing after May 31,
2005, Borrower fails to
deliver a Borrowing Base Certificate reflecting the
Borrowing Base as of the
last Business
Day of the immediately
preceding Fiscal Month in accordance with
Section 7.1(a)(i),
the Applicable Margins shall be
increased to their highest
levels set
forth in the definition of the term "Applicable
Margin" (without
regard to the amount
of Excess Availability) effective as of the first Business
Day of such month until such time as Borrower satisfies such delivery
requirement; and
(c)
Notwithstanding
anything to the
contrary contained in clauses (a)
and (b) of this
definition, with respect to Revolving Loans and fees for Letter
of Credit
Accommodations, the Applicable Margin otherwise used to calculate
the
Interest Rate for Prime Rate Loans, Eurodollar Rate Loans and fees
for Letter of
Credit Accommodations
shall be the highest
respective percentages set forth in
the definition
of the term Applicable Margin for each
such category (without
regard to the amount
of Excess Availability) plus in each case two percent (2%)
per annum,
at Agent's or the Required Lenders' option, without
notice, (A)
either (x) for the period on and after the date of termination or
non-renewal of
the term of this Agreement until such time as all Obligations owing
to Agent and
Lenders are indefeasibly paid in full in immediately available
funds, or (y) for
the period
from and after the date of the occurrence
of any Event of Default
arising under Sections 10.1 (a)(i), (a)(ii), or (a)(iii) and for so
long as such
Event of Default is continuing and (B) on the
Revolving Loans (or any portion
thereof) to
Borrower at any time outstanding which are in excess of the
Borrowing Base, the
Export-Related Borrowing Base, the Maximum Revolving Credit
or the Maximum Exim Revolving Credit (whether or
not such excess(es) arise or
are made with or without Agent's or any Lender's knowledge or consent
and
whether made
before or after an Event of Default),
"Inventory" shall mean, as to Borrower and each Guarantor, all of
Borrower's and
such Guarantor's
now owned and hereafter existing or
acquired goods, wherever
located, which
(a) are leased by
Borrower or such Guarantor as lessor; (b) are
held by Borrower for sale or lease or to be furnished under a
contract of
service; (c)
are furnished by Borrower or such Guarantor
under a contract of
service; or
(d) consist of raw materials, work in process,
finished goods or
materials used
or consumed in its business.
"Inventory Loan Limit" shall mean (a) with respect to all Eligible
Inventory, an
amount equal
to $30,000,000 and (b) with respect to all Eligible
Inventory
consisting of
work in process, an amount equal to $12,000,000.
"Investment Property
Control Agreement"
shall mean an agreement in writing, in
form and substance reasonably satisfactory to Agent, by and among Agent,
Borrower or any
Guarantor (as the case may be) and any securities intermediary,
commodity intermediary or other person who has custody, control or
possession of
any investment
property of Borrower or such Guarantor
acknowledging that such
securities
intermediary,
commodity intermediary
or other person has
custody,
control or
possession
of such investment
property on behalf of Agent, that it
will comply
with entitlement orders originated by Agent with
respect to such
19
<PAGE>
investment property,
or other instructions of Agent, or (as the
case may be)
apply any value
distributed on account of any commodity contract as directed by
Agent, in each case, without the further
consent of Borrower or such Guarantor
and including
such other terms and
conditions as Agent may reasonably require.
"Knowledge" shall
mean the actual knowledge by the chief executive
officer,
chief financial officer, chief operating officer and/or comptroller
of Borrower,
in each case after due inquiry.
"LaSalle Indenture"
shall mean that certain Indenture dated
November 1, 1997
between Borrower
and LaSalle National Bank, as trustee.
"Lenders" shall
mean the lenders that are signatories hereto as
Lenders and
other persons
made a party to this Agreement as a Lender in
accordance with
Section 13.6 hereof, and their respective successors and assigns;
each sometimes
being referred
to herein individually as a "Lender".
"Letter of
Credit Accommodations" shall mean Exim Letter of Credit
Accommodations and
Non-Exim Letter of Credit Accommodations.
"License Agreements"
shall have the meaning set forth in
Section 8.11 hereof.
"Loans" shall
mean the Revolving Loans and the Special Agent Advances
"Management Services
Agreement"
shall mean (a) that certain Corporate
Development and
Administrative
Services Agreement dated as of the Closing Date
among Equity
Sponsor, Holdings and Borrower, as amended
or otherwise modified
from time to time and (b) the Management Services
Agreement dated as of the
Closing Date
among the Borrower,
the YCII Litigation Trust and the individuals
listed as "Sellers" therein.
"Margin Stock"
shall mean "margin
stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse
Effect" shall mean a material adverse effect on (a) the
financial condition,
business, performance or operations of Borrower and
Guarantors, taken
as a whole, or the legality, validity or
enforceability of
this Agreement
or any of the other Financing Agreements; (b)
the legality,
validity,
enforceability,
perfection or priority of the security interests and
liens of Agent upon the Collateral; (c) the value
of the Collateral, (d)
the
ability of Borrower to repay the Obligations or to perform its
other obligations
under this Agreement or any of the other Financing Agreements as
and when due or
to be performed; (e) the ability of Agent or any Lender to enforce the
Obligations or to
realize upon the Collateral; or (f) any of the other material
rights and
remedies of Agent and Lenders under this Agreement
or any of the
other Financing
Agreements.
"Material Contract"
shall mean (a) any
contract or other agreement (other than
the Financing
Agreements),
written or oral, of Borrower or any Guarantor
involving monetary
liability of or to any Person in an amount in excess
of
20
<PAGE>
$250,000 in any Fiscal Year and (b) any other contract or other
agreement (other
than the Financing Agreements), whether written or
oral, to which Borrower or
any Guarantor
is a party as to which the breach,
nonperformance, cancellation
thereof or
the failure to renew the same by any party thereto
would have a
Material Adverse
Effect.
"Maximum Credit"
shall mean, at any time, the lesser of (a) the Maximum
Revolving Credit
and (b) the amount of Indebtedness
permitted to be incurred
under this
Agreement under the terms of the Indenture.
"Maximum Exim
Revolving Credit" shall mean an amount approved by
Exim not to
exceed $2,500,000.
"Maximum Revolving
Credit" shall initially mean $60,000,000, as such amount may
be increased in $5,000,000 increments pursuant to Section 2.6, but
not to exceed
$75,000,000, and as such amount may be reduced in $1,000,000
increments pursuant
to Section
2.7.
"Mortgages" shall mean, individually and collectively, each of the
following (as
the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed,
restated or replaced):
(a) the Mortgage, dated of even date
herewith, by
Borrower in favor of Agent with respect to
the Real Property and
related assets
of Borrower located at 1004 East Illinois
Street, Assumption,
IL, (b) the Mortgage, dated of even date herewith, by Borrower in
favor of Agent
with respect to the
Real Property and related assets of Borrower located at 901
North Main Street, Paris, IL, (c) the Mortgage, dated of
even date herewith, by
Borrower in favor of
Agent with respect to the Real Property and related assets
of Borrower located at
106 Marshall Drive, Newton, IL, (d) the Mortgage, dated
of even date herewith, by Borrower in favor of
Agent with respect to the Real
Property and
related assets of Borrower located at 110-110 South Coles,
Vandalia, IL,
(e) the Mortgage, dated of even date herewith, by
Borrower in
favor of Agent with
respect to the Real Property and related assets of Borrower
located at 5205 4th Avenue South, Clear Lake, IA, (f) the Mortgage
dated of even
date herewith,
by Borrower in favor
of Agent with respect to the Real Property
and related assets of Borrower located at 13217 Illinois Highway,
Paris, IL, and
(g) the Mortgage, dated of even date herewith, by Borrower
in favor of Agent
with respect to the Real Property and related assets of Borrower
located at 1051
W. North Ave., Flora, IL.
"Multiemployer Plan"
shall mean a "multi-employer plan" as
defined in Section
3(37) of ERISA which is or was at any time during the current
year or the
immediately preceding six (6) years contributed to by Borrower, any
Guarantor or
any ERISA Affiliate.
"Net Amount" shall mean, with respect to the Eligible Accounts, the
gross amount
of the Eligible Accounts less the amount
of (a) sales, excise or similar taxes
owed by Borrower in
respect thereof and (b) returns, discounts, claims, credits
and allowances
of any nature at any time issued,
owing, granted, outstanding,
available or
claimed with respect thereto.
"Net Orderly
Liquidation Value" at any time means, with respect to Inventory
or
any piece of Equipment, the estimated net recovery value
of all Inventory or
such piece
of Equipment, as applicable, as determined based
on the then most
recent appraisal delivered in accordance with this Agreement, which
reflects the
estimated net cash
value expected by the appraiser to be derived from a sale or
disposition at a
liquidation or going-out-of-business sale of such Inventory or
Equipment after deducting all costs, expenses and fees attributable
to such sale
or disposition,
including, without
limitation, all fees, costs and expenses of
any liquidator(s)
engaged to conduct such sale or disposition and all costs and
expenses of
removing and delivering the same to a purchaser.
"Net Orderly
Liquidation
Value Factor" at any
time means the ratio of the Net
Orderly Liquidation
Value to the book value of Inventory, expressed as a
21
<PAGE>
percentage. The
Net Orderly
Liquidation Value Factor shall be determined as of
the date hereof based on the most recent
appraisal delivered prior to the date
hereof and shall be
updated pursuant to appraisals delivered under Section 7.3.
"Net Proceeds"
means, with respect to any asset, the
aggregate cash proceeds
received in
respect of its sale, disposition, condemnation or casualty
(collectively, a
"Disposition")
(including,
without limitation, any cash
received upon
the sale or other disposition of any non-cash consideration
received from
such Disposition), net of the direct costs relating to such
Disposition,
including, without
limitation,
legal, accounting and
investment
banking fees,
and sales commissions,
and any relocation expenses incurred as a
result of such Disposition, taxes paid or payable as a result of such
Disposition, in
each case, after
taking into account any available tax credits
or deductions
and any tax sharing arrangements, and amounts required
to be
applied to the repayment of Indebtedness, other than the
Obligations, secured by
a lien on the asset subject to such
Disposition and any reserve for adjustment
in respect of the sale
price of such asset established in accordance with GAAP.
"Non-Exim Excess
Availability"
shall mean, as to Borrower, the amount,
calculated at
any date, equal to: (a) the lesser of: (i) the Borrowing Base
and (ii) the Maximum Revolving Credit less
the then outstanding amount of Exim
Revolving Loans
and Exim Letter of
Credit Accommodations, minus (b) the amount
-----
of all then outstanding Non-Exim
Revolving Loans and Non-Exim Letter of Credit
Accommodations.
"Non-Exim Letter of Credit Accommodations" shall mean,
collectively, the letters
of credit,
merchandise purchase
or other guaranties (a) which are from time to
time either issued or
opened by Agent or any Lender for the account of Borrower
or any Obligor or (b) with respect to which Agent or
Lenders have agreed to
indemnify the issuer
or guaranteed to the issuer the performance by Borrower or
any Obligor
of its obligations to such issuer; sometimes being
referred to
herein individually as a "Non-Exim Letter of Credit Accommodation",
in each case
provided under
Section 2.2(a)(i) hereof.
"Non-Exim Revolving
Loans" shall mean the
loans now or hereafter made by or on
behalf of any Lender or by Agent for the account
of any Lender on a revolving
basis pursuant
to the Credit Facility (involving advances, repayments and
readvances) as
set forth in Section 2.1(a) hereof.
"Obligations" shall
mean any and all Loans, Letter of Credit Accommodations and
all other obligations, liabilities and indebtedness of
every kind, nature and
description owing by
Borrower and Obligors to Agent or any Lender and/or any of
their Affiliates,
including principal, interest, charges, fees, costs and
expenses, however
evidenced, whether as
principal, surety, endorser, guarantor
or otherwise,
arising under this Agreement or any of the other Financing
Agreements or
pursuant to any Product Obligations, whether now existing
or
hereafter arising,
whether arising before, during or after
the initial or any
renewal term
of this Agreement or after the commencement of any case
with
22
<PAGE>
respect to
Borrower or any Obligor under the United
States Bankruptcy Code or
any similar
statute (including the
payment of interest and other amounts which
would accrue
and become due but for the
commencement of such case, whether or
not such amounts are allowed or allowable in whole or in part in
such case), and
whether direct or indirect, absolute or contingent, joint or
several, due or not
due, primary or
secondary, liquidated or unliquidated, or secured or unsecured.
"Obligor" shall
mean any guarantor,
endorser, acceptor, surety or other person
liable on or with respect to the Obligations or who is the owner of
any property
which is security for the Obligations (including, without limitation,
Guarantors), other
than Borrower.
"Owned Intellectual
Property" shall have
the meaning set forth in Section 8.11
hereof.
"Participant" shall
mean any Person that
acquires and holds a participation in
the interest
of any Lender in any of the Loans and Letter of Credit
Accommodations in
conformity
with the provisions of Section 13.6 of this
Agreement governing
participations.
"Permitted
Acquisition" shall
mean an Acquisition permitted under Section
9.10(l) hereof.
"Permitted Bond
Repurchase"
shall have the meaning set forth in
Section 9.23
hereof.
"Permitted Holders"
shall mean the Equity Sponsor and Affiliates owned or
controlled by
the Equity Sponsor.
"Person" or
"person" shall mean any individual, sole proprietorship,
partnership,
corporation (including
any corporation which
elects subchapter S
status under
the Code), limited liability company, limited liability
partnership, business
trust, unincorporated association, joint stock
corporation, trust,
joint venture or other entity or any government or
any
agency or instrumentality or political subdivision thereof.
"Plan" means
an employee benefit plan (as defined in Section 3(3)
of ERISA)
which Borrower
or any Guarantor sponsors, maintains,
or to which it makes, is
making, or is obligated to make contributions, or in the case of a
Multiemployer
Plan has made contributions at any time during the immediately
preceding six (6)
plan years.
"Prime Rate"
shall mean the rate from time to time publicly announced by
Reference Bank,
or its successors, as its prime rate, whether or not
such
announced rate
is the best rate available at such bank.
"Prime Rate Loans"
shall mean any Loans or portion thereof on which interest is
payable based
on the Prime Rate in accordance with the terms thereof.
"Prior Loan Agreement" shall mean that certain Loan and Security
Agreement dated
as of October 31, 2003 (as amended) among Borrower, ALC,
Congress Financial
Corporation (Central)
and the lenders from time to time
party thereto and all
documents, agreements
and instruments executed in connection therewith.
23
<PAGE>
"Prior Obligations" means the Obligations existing under (and as
defined in) the
Prior Loan
Agreement.
"Priority Event" shall
mean the occurrence of any one or more of the following:
(a) the occurrence and continuance of an Event of Default under Section
10.1(a)(i) or
(ii) hereof; (b) the occurrence and continuance
of an Event of
Default under
Sections 10.1(g) or
10.1(h) hereof; or (c) the occurrence of any
other Event of Default
and the acceleration by Agent of the payment of all or a
material portion
of the Obligations, in each case after
giving effect to any
applicable cure
periods, if any.
"Product Obligations"
shall mean every
obligation of Borrower or any Guarantor
under and in respect of any one or more of the
following types of services or
facilities extended
to Borrower or any Guarantor by Agent, any
Lender or any
Affiliate of
any Lender or Agent: (i) credit cards, (ii) cash
management or
related services
including the automatic clearing house
transfer of funds for
the account of
Borrower or any Guarantor pursuant to agreement or overdraft
and
(iii) cash
management,
including controlled disbursement services.
"Pro Rata Share" shall mean as to any Lender, the fraction
(expressed as a
percentage) the
numerator of which is such Lender's Commitment and the
denominator of
which is the aggregate amount of all of the Commitments of
Lenders, as
adjusted from time to time in accordance with the
provisions of
Section 13.6
hereof; provided, that, if the Commitments
have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and
its interest
in the Letter of Credit Accommodations and the denominator shall be the
aggregate amount
of all unpaid Loans and Letter of
Credit Accommodations; and
"Real Property" shall mean all now owned and hereafter acquired
real property of
Borrower and
each Guarantor, including leasehold
interests, together with all
buildings, structures,
and other improvements located thereon and all licenses,
easements and
appurtenances
relating thereto,
wherever located, including the
real property
and related assets
more particularly described in the Mortgages.
"Real Property
Sublimit" shall have
the meaning set forth in the definition of
Fixed Asset
Amount.
"Receivables" shall
mean all of the following now owned or hereafter arising or
acquired property
of Borrower and each Guarantor: (a) all Accounts;
(b) all
interest, fees,
late charges,
penalties, collection fees and other amounts due
or to become due or otherwise payable in
connection with any Account; (c) all
payment intangibles
of Borrower or such Guarantor; (d) letters of credit,
indemnities,
guarantees, security or other deposits and proceeds thereof
issued
payable to
Borrower or any Guarantor or otherwise in
favor of or delivered to
Borrower or
any Guarantor in connection with any Account; or (e) all
other
accounts, contract
rights, chattel paper, instruments, notes, general
intangibles and
other forms of
obligations owing to Borrower or any Guarantor,
whether from
the sale and lease of goods or other
property, licensing of any
property (including
Intellectual
Property or other general intangibles),
24
<PAGE>
rendition of services
or from loans or advances by Borrower or any Guarantor or
to or for the benefit of any third person
(including loans or advances to any
Affiliates or Subsidiaries of Borrower or any Guarantor) or
otherwise associated
with any Accounts, Inventory or general intangibles of Borrower or
any Guarantor
(including, without limitation, choses in action, causes of action,
tax refunds,
tax refund
claims, any funds which may become payable to Borrower or any
Guarantor in
connection
with the termination of any Plan or other employee
benefit plan and any other amounts payable to Borrower or any
Guarantor from any
Plan or other employee benefit plan, rights and claims against
carriers and
shippers, rights
to indemnification, business interruption insurance and
proceeds thereof,
casualty or any similar types of insurance
and any proceeds
thereof and
proceeds of insurance covering the lives of employees on
which
Borrower or
any Guarantor is a beneficiary).
"Records" shall
mean, as to Borrower
and each Guarantor, all of Borrower's and
such Guarantor's
present and future books of account of
every kind or nature,
purchase and sale
agreements, invoices, ledger cards, bills of lading and other
shipping evidence, statements, correspondence, memoranda, credit
files and other
data relating to the
Collateral or any account debtor, together with the tapes,
disks, diskettes
and other data and software storage media
and devices, file
cabinets or
containers
in or on which the
foregoing are stored (including any
rights of Borrower or any Guarantor with respect to the
foregoing maintained
with or by any other person).
"Reference Bank"
shall mean Wachovia
Bank, National Association, or such other
bank as Agent may from
time to time designate and that is reasonably acceptable
to Borrower.
"Register" shall
have the meaning set forth in Section 13.6 hereof.
"Renewal Date"
shall have the meaning set forth in Section 13.1 hereof.
"Required Lenders"
shall mean, at any time, those Lenders
whose aggregate Pro
Rata Shares
exceed fifty (50%) percent of the
aggregate of the Commitments of
all Lenders,
or if the Commitments
shall have been terminated, Lenders to whom
more than fifty (50%) percent of the then outstanding
Obligations are owing.
"Required
Supermajority Lenders"
shall mean at any time, those Lenders
whose
Commitments aggregate
seventy (70%) percent or more of the aggregate of
the
Commitments of
all Lenders, or if the Commitments
shall have been terminated,
Lenders to
whom at least seventy (70%) percent of the then outstanding
Obligations are
owing.
"Reserves" shall mean as of any date of determination, such amounts
as Agent may
from time to time establish and revise in good faith reducing
the amount of
Revolving Loans
and Letter of Credit Accommodations which
would otherwise be
available to
Borrower under the lending formulas provided for herein:
(a)
to
reflect events, conditions, contingencies or risks which,
as
determined by Agent in
good faith, adversely affect, or would have a reasonable
likelihood of
adversely affecting, either (i) the Collateral or any other
property which is
security for the Obligations or its value or (ii) the assets,
25
<PAGE>
business or prospects of Borrower or any Obligor or (iii) the
security interests
and other rights of Agent or any Lender in the Collateral (including
the
enforceability,
perfection and
priority thereof and the absence of any
Collateral Access
Agreement required to be obtained under this
Agreement); or
(b)
to reflect
Agent's good faith belief that any collateral report or
financial information
furnished by Borrower or any Obligor to Agent is
incomplete, inaccurate
or misleading in any material respect; or
(c)
in respect
of any state of facts which Agent
determines in good faith
constitutes an
Event of Default; or
(d)
to reflect reserves required to be taken by Agent under the terms
of the
Exim Guarantee
Documents.
Without limiting
the generality of the foregoing, Reserves may be
established from
time to time to
reflect that (i) dilution with respect to the
Accounts (which
is the ratio of the
aggregate amount of non-cash reductions in
Accounts for any
period to the aggregate dollar amount of the sales of Borrower
for such period) as calculated by Agent in good
faith for any period is or is
reasonably anticipated
to be greater than five (5%) percent or (ii) the
Net
Orderly Liquidation
Value of the Eligible Equipment or Fair Market Value of the
Eligible Real
Property as set forth in the most recent
acceptable appraisals
received by Agent with respect thereto has declined so that the
then outstanding
principal amount
of the Revolving Loans that were advanced against
Eligible
Equipment or
Eligible Real Property is greater than the
principal amounts of
Revolving Loans
that are permitted to
be advanced at the date of determination
of such Reserves.
To the extent Agent establishes new criteria or
revises existing criteria for
Eligible Accounts,
Eligible Inventory, Export-Related Accounts Receivable
or
Export-Related Inventory so as to address any circumstances,
condition, event or
contingency as
permitted by and in
accordance with this Agreement, Agent shall
not establish
a Reserve for the same purpose.
The amount of any
Reserve established by Agent under this definition shall have
a reasonable
relationship
to the event, condition, circumstance or other
contingency which
is the basis for establishing such
reserve as determined by
Agent in good faith.
Agent shall provide a
written or oral notice (followed by
a written notice in the case of any initial oral notice),
at the time of or
prior to the
establishment of any Reserve after the Closing Date, detailing
the
amount and
reason for such Reserve. To the extent a Reserve has been
established based on an event or condition and such event or
condition no longer
exists or exposes the Borrower or Collateral to any risks as
determined by Agent
in good faith, such Reserve shall be removed.
"Revolving Loans"
shall mean Exim Revolving Loans and Non-Exim Revolving Loans.
"Seller" means
all the parties designated as "Stockholders" under the
Acquisition
Agreement.
"Senior Notes"
means those certain 12% Senior Notes due
2013 issued under the
Indenture.
"Solvent" shall mean,
at any time with respect to any Person, that at such time
(a) such Person is able to pay its debts as they mature and
has (and has a
reasonable basis
to believe it will continue to have)
sufficient capital (and
not unreasonably
small capital) to carry on its business
consistent with its
practices as of the date hereof, and (b) the Fair Market Value of
the assets and
properties of
such Person (and
including as assets for this purpose all rights
26
<PAGE>
of subrogation,
contribution
or indemnification arising pursuant to any
guarantees given
by such Person) are greater than the Indebtedness of
such
Person and
including subordinated and contingent liabilities
computed at the
amount which,
such person has a reasonable basis to believe,
represents an
amount which can reasonably be expected to become an actual or
matured liability
(and including
as to contingent liabilities arising
pursuant to any guarantee
the face amount of such liability as reduced to
reflect the probability of it
becoming a
matured liability).
"Special Agent
Advances" shall have the meaning set forth in Section
12.11
hereof.
"Specified Amounts"
shall have the meaning
set forth in Section 6.4(a) hereof.
"Subsidiary" or
"subsidiary"
shall mean, with respect to any Person, any
corporation, limited
liability company,
limited liability partnership or other
limited or
general partnership,
trust, association or other business entity of
which an aggregate of a majority of the outstanding Capital Stock
or other
interests entitled
to vote in the election of the board of
directors of such
corporation
(irrespective of
whether, at the time,
Capital Stock of any other
class or classes of such corporation shall have or
might have voting power by
reason of the happening of any contingency), managers, trustees or other
controlling persons,
or an equivalent controlling interest therein, of
such
Person is, at the
time, directly or indirectly, owned by such Person and/or one
or more subsidiaries of such Person.
"Trigger Event" shall
mean that (a) an Event of Default shall have occurred and
shall be continuing and/or that (b) Excess Availability shall be less
than
$7,500,000; provided,
that a Trigger Event
shall remain in existence until (i)
Excess Availability
has exceeded $7,500,000 for four (4) consecutive
weekly
periods (with
each such weekly period ending on a Friday) following the
occurrence of
such Trigger Event and (ii) no Event of
Default has occurred or
continues to exist
during such four (4) week period; provided, further, that if
a Trigger Event occurs three (3) times in any 360 day period, then any
subsequent Trigger
Event to occur in such 360 day period shall remain in
existence until
the requirements set forth in clauses (i) and (ii) in
this
definition have
been satisfied for four (4) consecutive weekly periods
commencing after
the sixtieth (60th) day following the occurrence of such
subsequent Trigger
Event.
"UCC" shall
mean the Uniform Commercial Code as in effect in the State of
Illinois, and any successor statute, as in effect from time to time
(except that
terms used herein
which are defined in the Uniform Commercial Code as in effect
in the State of Illinois on the date hereof shall continue
to have the same
meaning
notwithstanding any
replacement or amendment of such statute except as
Agent may otherwise determine).
"Value" shall
mean, with respect to Eligible Inventory, the
lower of its (a)
cost, computed on a first-in first-out basis in accordance with
GAAP or (b) Fair
Market Value;
provided, that, for
purposes of the calculation of the Borrowing
Base, (i) the Value of
the Inventory shall not include: (A) the portion of the
value of Inventory equal to the profit earned by any Affiliate on
the sale
thereof to
Borrower or (B) write-ups or write-downs in value
with respect to
currency exchange
rates and (ii) notwithstanding anything to the contrary
contained herein, the cost of the Inventory shall be computed in
the same manner
and consistent
with the most recent appraisal of the Inventory
received and
accepted by
Agent prior to the date hereof, if any.
27
<PAGE>
"Voting Stock"
shall mean with respect to any Person, (a) one (1) or
more
classes of Capital Stock of such Person having general voting
powers to elect at
least a majority of the board of directors, managers or trustees of
such Person,
irrespective of
whether at the time Capital Stock of any other class or classes
has or might have voting power by reason of the
happening of any contingency,
and (b) any Capital Stock of such Person convertible
or exchangeable without
restriction at
the option of the holder thereof into Capital Stock
of such
Person described
in clause (a) of this definition.
"Wachovia" shall
mean Wachovia Capital Finance Corporation (Central), an
Illinois corporation,
in its individual capacity, and its successors and
assigns.
SECTION 2.
CREDIT FACILITIES
------------------
2.1
Revolving Loans.
(a)
Non-Exim Revolving
Loans. (i) Subject to and upon the terms
and
--------------------------
conditions contained
herein, each Lender
severally (and not jointly) agrees to
fund its Pro Rata Share of Non-Exim Revolving Loans
to Borrower from time to
time in amounts requested by Borrower up
to the amount outstanding at any time
equal to the lesser
of: (A) the Borrowing
Base at such time or (B) the Maximum
Revolving Credit
at such time minus the aggregate amount of
outstanding Exim
Revolving Loans
and Letter of Credit Accommodations.
(ii)
INTENTIONALLY
OMITTED.
----------------------
(iii) Except
in Agent's discretion, with the
consent of all Lenders, or as
otherwise provided herein, but subject to Section 12.8 hereof, in
the event that
the aggregate
principal amount of the Non-Exim Revolving Loans and
Non-Exim
Letter of Credit Accommodations outstanding exceed the Borrowing
Base or the
Maximum Revolving
Credit minus the aggregate amount of outstanding Exim
Revolving Loans
and Exim Letter of Credit Accommodations, or the
aggregate
principal amount
of Non-Exim Revolving Loans and Non-Exim Letter of Credit
Accommodations based
on Eligible Inventory exceed the
Inventory Loan Limit or
the aggregate
amount of the
outstanding Letter of Credit Accommodations exceed
the sublimit
for Letter of Credit Accommodations
set forth in Section 2.2(e),
such event
shall not limit, waive or otherwise affect
any rights of Agent or
Lenders in
such circumstances or on any future occasions and
Borrower shall,
upon demand
by Agent, which may be made at any time or from time to
time,
immediately repay
to Agent the entire amount of any such excess for which
payment is
demanded.
(b)
Exim
Revolving Loans. (i) Subject to and upon the terms and
----------------------
conditions contained
herein, each Lender
severally (and not jointly) agrees to
fund its Pro Rata Share of Exim Revolving Loans to Borrower from
time to time in
amounts requested by
Borrower up to the amount outstanding at any time equal to
the lesser
of: (A) the Export-Related Borrowing Base at such time, (B)
the
Maximum Exim
Revolving Credit or (C) the Maximum Revolving Credit
minus the
aggregate amount
of outstanding Non-Exim Revolving
Loans and Letter of Credit
Accommodations at
such time.
(ii)
Except in Agent's
discretion, with the consent of all Lenders, or
as otherwise
provided herein, in
the event that the aggregate principal amount
28
<PAGE>
of Exim Revolving Loans and Exim Letter of Credit
Accommodations outstanding
exceed (x)
the Export-Related Borrowing Base, (y) the Maximum
Exim Revolving
Credit or (z) the Maximum Revolving Credit minus the aggregate amount of
outstanding Non-Exim
Revolving Loans and Non-Exim Letter of Credit
Accommodations, such event shall not limit, waive or otherwise
affect any rights
of Agent or Lenders in such circumstances or on any future occasions and
Borrower shall, upon demand by Agent, which may be made at any time
or from time
to time, immediately repay to Agent the entire amount of any
such excess for
which payment
is demanded.
2.2
Letter of Credit Accommodations.
(a)
(i)
Subject to and upon
the terms and conditions contained herein,
at the request of Borrower, Agent agrees, for the
ratable risk of each Lender
according to
its Pro Rata Share, to provide or
arrange for Non-Exim Letter of
Credit Accommodations
for the account of Borrower containing terms and
conditions reasonably
acceptable to Agent and acceptable to the issuer thereof.
Any payments
made by or on behalf
of Agent or any Lender to any issuer thereof
and/or related
parties in connection with the Non-Exim Letter of Credit
Accommodations
provided to
or for the benefit of Borrower shall
constitute
additional Non-Exim
Revolving Loans to Borrower pursuant to Section
2.1(a);
provided, that
if there is
insufficient Non-Exim Excess Availability as of the
----
date of such payment, Borrower shall reimburse Agent for the
amount of such
payment within
one (1) Business Day after demand therefor.
(i)
hidden level
(ii)
Subject to
and upon the terms and
conditions contained herein, at the
request of Borrower, Agent agrees, for the ratable risk of each
Lender according
to its Pro Rata Share, to provide or arrange for Exim Letter of Credit
Accommodations for
the account of Borrower containing terms and
conditions
reasonably acceptable
to Agent and acceptable to the issuer thereof. Any
payments made
by or on behalf of Agent or any Lender to any
issuer thereof
and/or related
parties in connection with the Exim Letter of Credit
Accommodations
provided to
or for the benefit of Borrower shall
constitute
additional Exim
Revolving Loans to Borrower pursuant to Section 2.1(b);
provided, that if
there is insufficient Exim Excess Availability as of the date
of such payment, Borrower shall reimburse
Agent for the amount of such payment
within one
(1) Business Day after demand therefor.
(b)
In
addition to any charges, fees or expenses charged by any bank
or
issuer in connection with the Letter of Credit
Accommodations, Borrower shall
pay to Agent, for the benefit of Lenders, a letter of credit fee at
a rate equal
to the Interest Rate then in effect on
the daily outstanding balance available
to be drawn on the Letter of Credit
Accommodations issued and outstanding for
the immediately
preceding month (or part thereof), payable in arrears as of the
first day of each succeeding month. Such letter of credit fee shall be
calculated on the
basis of a three hundred sixty (360) day year and actual days
elapsed and
the obligation of Borrower to pay such fee shall survive the
termination of
this Agreement.
(c)
Borrower shall give Agent two (2) Business Days' prior written
notice of
Borrower's request
for the issuance of a
Letter of Credit Accommodation. Such
notice shall
be irrevocable and shall specify whether such Letter
of Credit
Accommodation is an
Exim Letter of Credit Accommodation or a Non-Exim Letter of
Credit Accommodation,
the original face amount of the Letter of Credit
Accommodation requested, the effective date (which date shall be a
Business Day)
of issuance
of such requested Letter of Credit Accommodation, whether
such
Letter of Credit Accommodation may be drawn in a single or in
partial draws, the
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date on which such
requested Letter of Credit Accommodation is to expire (which
date shall
be a Business Day), the purpose for which such Letter
of Credit
Accommodation is
to be issued, and the beneficiary of
the requested Letter of
Credit Accommodation.
Borrower shall attach to such notice the proposed form of
the Letter
of Credit Accommodation.
(d)
In addition
to being subject to the satisfaction of the
applicable
conditions precedent
contained in Section 4 hereof and the other terms and
conditions contained
herein, no Letter of Credit Accommodations shall be
available unless each
of the following conditions precedent have been satisfied
in a manner reasonably satisfactory to Agent: (i) Borrower shall have
delivered
to the proposed issuer
of such Letter of Credit Accommodation at such times and
in such manner as such
proposed issuer may require, an application, in form and
substance satisfactory
to such proposed issuer and Agent,
for the issuance of
the Letter
of Credit
Accommodation and such other documents as may be required
pursuant to the terms
thereof, and the form and terms of the proposed Letter of
Credit Accommodation
shall be reasonably satisfactory to Agent and satisfactory
to such proposed issuer, (ii) as of the date of issuance, no order
of any court,
arbitrator or other
Governmental Authority shall purport by its terms to enjoin
or restrain
money center banks
generally from issuing letters of credit of the
type and in the amount of the proposed Letter
of Credit Accommodation, and no
law, rule or regulation applicable to money center banks generally and no
request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over money center banks
generally shall
prohibit, or
request that the proposed issuer of such Letter of Credit
Accommodation refrain
from, the issuance of
letters of credit generally or the
issuance of
such Letters of Credit Accommodation; and (iii)
the Exim Excess
Availability or
Non-Exim Excess Availability, as applicable, of Borrower, prior
to giving effect to such Letter of Credit
Accommodations, on the date of the
proposed issuance
of any Letter of
Credit Accommodations, shall be equal to or
greater than:
(A) if the proposed Letter of Credit
Accommodation is for the
purpose of
purchasing Eligible
Inventory or Eligible Export-Related Inventory,
as applicable, and the
documents of title with respect thereto are consigned to
the issuer, the sum of
(1) the product of (x) a percentage equal to one hundred
(100%) percent
minus the then applicable percentage with
respect to Eligible
Inventory or Eligible
Export-Related Inventory, as applicable, set forth in the
definition of
the term Borrowing Base or Export-Related Borrowing Base,
as
applicable, multiplied
by (y) the Value of
such Eligible Inventory or Eligible
Export-Related Inventory, as applicable, plus (2) freight, taxes,
duty and other
amounts which
are or will be due, or if not then determined, which
Agent
reasonably estimates
in good faith must be paid in connection with such
Inventory upon
arrival and for delivery to one of Borrower's locations
for
Eligible Inventory
or Eligible
Export-Related Inventory, as applicable, within
the United
States of America and (B) if the proposed Letter of Credit
Accommodation is
for any other purpose or the documents of title are not
consigned to the
issuer in connection with a Letter of Credit Accommodation for
the purpose
of purchasing Inventory, an amount equal to one hundred
(100%)
percent of
the face amount thereof and all other
commitments and obligations
made or incurred by Agent with respect thereto.
(e)
Except in Agent's discretion, with the consent of all Lenders, the
amount of all outstanding Letter of Credit Accommodations and all other
commitments and
obligations
made or incurred by Agent or any Lender in
connection therewith
shall not at any time exceed $15,000,000.
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<PAGE>
(f)
Borrower and
Guarantors
shall indemnify and hold Agent and Lenders
harmless from
and against any and all losses, claims, damages,
liabilities,
costs and expenses which Agent or any Lender
may suffer or incur in connection
with any Letter of Credit Accommodations and any documents, drafts or
acceptances relating
thereto, including any losses, claims, damages,
liabilities, costs
and expenses due to any action taken by any issuer or
correspondent with
respect to any Letter of Credit
Accommodation, except for
such losses,
claims, damages,
liabilities, costs or expenses that are a direct
result of the gross negligence or willful
misconduct of Agent or any Lender as
determined pursuant
to a final non-appealable order of a court of
competent
jurisdiction. Borrower
and each Guarantor assumes all risks with respect to the
acts or omissions of the drawer under or beneficiary of
any Letter of Credit
Accommodation and for purposes of this indemnity the drawer or
beneficiary shall
be deemed Borrower's
agent. Borrower and
each Guarantor assumes all risks for,
and agrees
to pay, all foreign, Federal, State and local taxes,
duties and
levies relating
to any goods purchased
in connection with any Letter of Credit
Accommodations or any documents, drafts or acceptances thereunder.
Borrower and
each Guarantor
hereby releases and holds Agent and Lenders
harmless from and
against any
acts, waivers, errors, delays or omissions, whether caused by
Borrower, any
Guarantor,
by any issuer or correspondent or otherwise
with
respect to
or relating to any Letter of Credit
Accommodation, except for the
gross negligence
or willful misconduct of Agent or any Lender as
determined
pursuant to a final,
non-appealable order of a court of competent jurisdiction.
The provisions
of this Section 2.2(f)
shall survive the payment of Obligations
and the termination of this Agreement.
(g)
In connection
with Inventory purchased pursuant to Letter of Credit
Accommodations,
Borrower and Guarantors shall, at Agent's request, instruct all
suppliers, carriers, forwarders, customs brokers, warehouses or
others receiving
or holding
cash, checks, Inventory, documents or instruments in which
Agent
holds a security interest to deliver them
to the Blocked Accounts (in the case
of cash or checks) or to Agent and/or subject to Agent's order (as
to such other
items), and
if they shall come
into Borrower's or such Guarantor's possession,
to deliver
them, upon Agent's
request, to the Blocked Accounts (in the case of
cash or checks) or to Agent in their original form
(as to such other items).
Borrower and
Guarantors shall also,
at Agent's request, designate Agent as the
consignee on
all bills of lading and other negotiable and non-negotiable
documents.
(h)
Borrower and
each Guarantor hereby irrevocably
authorizes and directs
any issuer
of a Letter of Credit Accommodation to name Borrower or such
Guarantor as the
account party therein and to deliver to Agent all instruments,
documents and
other writings and property received by issuer
pursuant to the
Letter of Credit Accommodations and to accept and rely upon Agent's
instructions
and agreements with respect to all matters arising in connection
with the Letter
of Credit Accommodations or the applications therefor. Nothing contained herein
shall be deemed or construed to grant Borrower or any
Guarantor any right or
authority to pledge
the credit of Agent or any Lender in any manner. Agent and
Lenders shall have no liability of any kind with respect to any
Letter of Credit
Accommodation provided
by an issuer other than Agent or any Lender unless Agent
has duly executed and delivered to such issuer the application or a
guarantee or
indemnification in
writing with respect to such Letter of Credit Accommodation.
Borrower and
Guarantors shall be bound by any reasonable interpretation made
in
good faith by Agent, or any other issuer or correspondent under or
in connection
with any Letter of
Credit Accommodation or any documents, drafts or acceptances
thereunder,
notwithstanding that
such interpretation
may be inconsistent with
any instructions
of Borrower or any Guarantor.
Agent shall have the
sole and
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<PAGE>
exclusive right and
authority to, and Borrower and Guarantors shall not: (i) at
any time an Event of Default exists or has occurred and is
continuing, (A)
approve or resolve any
questions of non-compliance of documents with respect to
Letter of Credit Accommodations, (B) give
any instructions as to acceptance or
rejection of
any documents or goods with respect to Letter of Credit
Accommodations or
(C) execute any and
all applications for steamship or airway
guaranties,
indemnities or
delivery orders with respect to Letter of
Credit
Accommodations, and
(ii) at all times (provided that if no Event of Default has
occurred, Agent
shall not exercise any of the following unless agreed
to by
Borrower in
writing in advance), (A) grant any
extensions of the maturity of,
time of payment for, or time of presentation of, any
drafts, acceptances, or
documents, and (B) agree to any amendments, renewals, extensions,
modifications,
changes or
cancellations
of any of the terms or conditions of any of the
applications, Letter
of Credit Accommodations, or documents, drafts or
acceptances thereunder
or any letters of credit included in the Collateral, but
in each case (including while an Event of Default has occurred and is
continuing) only
if the same does not increase the liabilities
or adversely
affect the rights of Borrower or any Guarantor to more than a de
minimis extent.
Agent may take such actions either in its
own name or in Borrower's name or in
any Guarantor's
name.
(i)
Any rights,
remedies, duties or obligations granted or
undertaken by
Borrower or any
Guarantor to any issuer or correspondent in any application for
any Letter
of Credit Accommodation, or any other agreement in favor of
any
issuer or correspondent relating to any Letter of Credit
Accommodation, shall be
deemed to have been granted or undertaken by Borrower or such
Guarantor to Agent
for the ratable benefit of Lenders. Any duties or obligations
undertaken by
Agent to any issuer or correspondent in any application for any
Letter of Credit
Accommodation, or
any other agreement by Agent in favor of any issuer or
correspondent to
the extent relating to any Letter of Credit
Accommodation,
shall be deemed to
have been undertaken by Borrower and Guarantors to Agent for
the ratable
benefit of Lenders and to apply in all respects to
Borrower and
Guarantors.
(j)
Immediately upon
the issuance or amendment of any Letter of Credit
Accommodation, each
Lender shall be deemed to have irrevocably and
unconditionally
purchased and
received, without recourse or warranty, an
undivided interest
and participation to the extent of such Lender's Pro
Rata
Share of the liability with respect to such Letter of Credit
Accommodation
(including, without
limitation,
all Obligations with respect thereto).
(k)
Borrower is
irrevocably
and unconditionally obligated without
presentment, demand or protest, to pay to Agent any amounts paid by
an issuer of
a Letter of Credit Accommodation with respect to such Letter of Credit
Accommodation (whether through the borrowing of Non-Exim Revolving
Loans or Exim
Revolving Loans
in accordance with
Section 2.2(a) or otherwise). In the event
that Borrower
fails to pay Agent any payment under a Letter of Credit
Accommodation in
an amount equal to the amount of such
payment as required in
Section 2.2(a),
Agent (to the extent it has actual notice thereof) shall
promptly notify each
Lender of the unreimbursed amount of such payment and each
Lender agrees, upon one (1) Business Day's notice, to fund to Agent
the purchase
of its participation in such Letter of
Credit Accommodation in an amount equal
to its Pro Rata Share of the unpaid amount.
The obligation of each
Lender to
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<PAGE>
deliver to Agent an amount equal to its respective participation
pursuant to the
foregoing sentence
is absolute and unconditional and
such remittance shall be
made notwithstanding
the occurrence or continuance of any Event of Default, the
failure to satisfy any other condition set forth in Section 4 or
any other event
or circumstance.
If such amount is not made available by a Lender
when due,
Agent shall
be entitled to recover
such amount on demand from such Lender with
interest thereon, for
each day from the date such amount was due until the date
such amount
is
