$95,000,000
CREDIT AGREEMENT
DATED AS OF JANUARY 28, 2000
AMONG
PARAGON TRADE BRANDS, INC.
AS BORROWER
AND
THE LENDERS AND ISSUERS PARTY HERETO
AND
CITICORP USA, INC.
AS ADMINISTRATIVE AGENT
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
AS ARRANGER
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1. Defined Terms................................................................1
Section 1.2. Computation of Time Periods.................................................30
Section 1.3. Accounting Terms and Principles.............................................30
Section 1.4. Certain Terms...............................................................30
ARTICLE II
THE FACILITY
Section 2.1. The Revolving Credit Commitments............................................31
Section 2.2. Borrowing Procedures........................................................31
Section 2.3. Swing Loans.................................................................32
Section 2.4. Letters of Credit...........................................................34
Section 2.5. Reduction and Termination of the Revolving Credit
Commitments...............................................................38
Section 2.6. Repayment of Loans..........................................................39
Section 2.7. Evidence of Debt............................................................39
Section 2.8. Optional Prepayments........................................................39
Section 2.9. Mandatory Prepayments.......................................................40
Section 2.10. Interest....................................................................41
Section 2.11. Conversion/Continuation Option..............................................42
Section 2.12. Fees........................................................................42
Section 2.13. Payments and Computations; Protective Advances..............................43
Section 2.14. Special Provisions Governing Eurodollar Rate Loans..........................46
Section 2.15. Capital Adequacy............................................................47
Section 2.16. Taxes.......................................................................47
Section 2.17. Substitution of Lenders.....................................................49
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
Section 3.1. Conditions Precedent to Initial Loans and Letters of Credit.................50
Section 3.2. Conditions Precedent to Each Loan and Letter of Credit......................53
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Section 3.3. Conditions to Increased Fixed Asset Amount Availability.....................56
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Corporate Existence; Compliance with Law....................................55
Section 4.2. Corporate Power; Authorization; Enforceable Obligations.....................56
Section 4.3. Ownership of Borrower; Subsidiaries.........................................56
Section 4.4. Financial Statements........................................................57
Section 4.5. Material Adverse Change.....................................................57
Section 4.6. Solvency....................................................................58
Section 4.7. Litigation..................................................................58
Section 4.8. Taxes.......................................................................58
Section 4.9. Full Disclosure.............................................................59
Section 4.10. Margin Regulations..........................................................59
Section 4.11. No Burdensome Restrictions; No Defaults.....................................59
Section 4.12. Investment Company Act; Public Utility Holding Company Act..................59
Section 4.13. Use of Proceeds.............................................................59
Section 4.14. Insurance...................................................................60
Section 4.15. Labor Matters...............................................................60
Section 4.16. ERISA.......................................................................60
Section 4.17. Environmental Matters.......................................................61
Section 4.18. Intellectual Property.......................................................61
Section 4.19. Title; Real Property........................................................62
Section 4.20. Related Documents...........................................................63
Section 4.21. Year 2000 Compliance........................................................64
ARTICLE V
FINANCIAL COVENANTS
Section 5.1. Maximum Leverage Ratio......................................................64
Section 5.2. Minimum Fixed Charge Coverage Ratio.........................................64
Section 5.3. Minimum EBITDA..............................................................65
Section 5.4. Maintenance of Tangible Net Worth...........................................65
Section 5.5. Capital Expenditures........................................................66
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ARTICLE VI
REPORTING COVENANTS
Section 6.1. Financial Statements........................................................66
Section 6.2. Default Notices.............................................................68
Section 6.3. Litigation..................................................................68
Section 6.4. Notices under Related Documents.............................................68
Section 6.5. SEC Filings; Press Releases.................................................68
Section 6.6. Labor Relations.............................................................68
Section 6.7. Tax Returns.................................................................69
Section 6.8. Insurance...................................................................69
Section 6.9. ERISA Matters...............................................................69
Section 6.10. Environmental Matters.......................................................69
Section 6.11. Borrowing Base Determination................................................70
Section 6.12. Other Information...........................................................71
ARTICLE VII
AFFIRMATIVE COVENANTS
Section 7.1. Preservation of Corporate Existence, Etc....................................71
Section 7.2. Compliance with Laws, Etc...................................................71
Section 7.3. Conduct of Business.........................................................72
Section 7.4. Payment of Taxes, Etc.......................................................72
Section 7.5. Maintenance of Insurance....................................................72
Section 7.6. Access......................................................................72
Section 7.7. Keeping of Books............................................................72
Section 7.8. Maintenance of Properties, Etc..............................................72
Section 7.9. Application of Proceeds.....................................................73
Section 7.10. Environmental...............................................................73
Section 7.11. Additional Collateral and Guaranties........................................73
Section 7.12. Cash Collateral Accounts and Cash Management System.........................73
Section 7.13. Real Property...............................................................74
ARTICLE VIII
NEGATIVE COVENANTS
Section 8.1. Indebtedness................................................................75
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Section 8.2. Liens, Etc..................................................................76
Section 8.3. Investments.................................................................77
Section 8.4. Sale of Assets..............................................................78
Section 8.5. Restricted Payments.........................................................78
Section 8.6. Restriction on Fundamental Changes..........................................79
Section 8.7. Change in Nature of Business................................................79
Section 8.8. Transactions with Affiliates................................................79
Section 8.9. Restrictions on Subsidiary Distributions; No New Negative
Pledge
Section 8.10. Modification of Constituent Documents.......................................80
Section 8.11. Modification of Related Documents...........................................80
Section 8.12. Modification of Senior Subordinated Notes;..................................80
Section 8.13. Accounting Changes; Fiscal Year.............................................80
Section 8.14. Margin Regulations..........................................................80
Section 8.15. Operating Leases; Sale/Leasebacks...........................................81
Section 8.16. Cancellation of Indebtedness Owed to It.....................................81
Section 8.17. No Speculative Transactions.................................................81
Section 8.18. Compliance with ERISA.......................................................81
Section 8.19. Environmental...............................................................81
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1. Events of Default...........................................................81
Section 9.2. Remedies....................................................................83
Section 9.3. Actions in Respect of Letters of Credit.....................................83
Section 9.4. Rescission..................................................................84
ARTICLE X
THE ADMINISTRATIVE AGENT
Section 10.1. Authorization and Action....................................................84
Section 10.2. Administrative Agent's Reliance, Etc........................................85
Section 10.3. The Administrative Agent Individually.......................................85
Section 10.4. Lender Credit Decision......................................................85
Section 10.5. Indemnification.............................................................86
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Section 10.6. Successor Administrative Agent..............................................86
Section 10.7. Concerning the Collateral and the Collateral Documents......................87
Section 10.8. Collateral Matters Relating to Related Obligations..........................88
ARTICLE XI
MISCELLANEOUS
Section 11.1. Amendments, Waivers, Etc....................................................88
Section 11.2. Assignments and Participations..............................................90
Section 11.3. Costs and Expenses..........................................................92
Section 11.4. Indemnities.................................................................93
Section 11.5. Limitation of Liability.....................................................94
Section 11.6. Right of Set-off............................................................94
Section 11.7. Sharing of Payments, Etc....................................................95
Section 11.8. Notices, Etc................................................................95
Section 11.9. No Waiver; Remedies.........................................................96
Section 11.10. Binding Effect..............................................................96
Section 11.11. Governing Law...............................................................96
Section 11.12. Submission to Jurisdiction; Service of Process..............................96
Section 11.13. Waiver of Jury Trial........................................................97
Section 11.14. Marshaling; Payments Set Aside..............................................97
Section 11.15. Section Titles..............................................................98
Section 11.16. Execution in Counterparts...................................................98
Section 11.17. Entire Agreement............................................................98
Section 11.18. Confidentiality.............................................................98
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SCHEDULES
Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.7 - Litigation
Schedule 4.8 - Taxes
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.18 - Intellectual Property
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Guaranty Obligations
Schedule 8.3 - Existing Investments
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Letter of Credit Request
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Opinion of Counsel for the Loan Parties
Exhibit H - Form of Guaranty
Exhibit I - Form of Pledge and Security Agreement
Exhibit J - Form of Blocked Account Letter
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CREDIT AGREEMENT, dated as of January 28, 2000, among PARAGON
TRADE BRANDS, INC., a Delaware corporation (the "BORROWER"), the Lenders (as
defined below), the Issuers (as defined below) and CITICORP USA, INC.
("CITICORP"), as agent for the Lenders and the Issuers (in such capacity, the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, on January 6, 1998 the Borrower commenced a case
under Chapter 11 of the Bankruptcy Code; and
WHEREAS, on November 15, 1999 the Borrower filed its Second
Amended Plan of Reorganization and Disclosure Statement with the Bankruptcy
Court; and
WHEREAS, on January 13, 2000 the Bankruptcy Court entered the
Confirmation Order; and
WHEREAS, as a condition to the effectiveness of the Plan of
Reorganization, the Borrower is required to obtain working capital financing of
at least $95,000,000, and has requested that the Lenders and Issuers make
available to the Borrower a revolving credit and letter of credit facility in
order to satisfy such condition; and
WHEREAS, the Borrower has requested that the Lenders and
Issuers make available for the purposes specified in this Agreement a revolving
credit and letter of credit facility; and
WHEREAS, the Lenders and Issuers are willing to make available
to the Borrower such revolving credit and letter of credit facility upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCOUNT" means any "account," as such term is defined in
Section 9-106 of the New York UCC, now owned or hereafter acquired by the
Borrower.
"ACCOUNT DEBTOR" means any "account debtor," as such term is
defined in Section 9-105(1)(a) of the New York UCC.
"ADMINISTRATIVE AGENT" has the meaning specified in the
preamble to this Agreement.
"ADVANCE RATE" means (a) up to 80% in the case of Eligible
Receivables, (b) up to 65% in the case of Eligible Raw Materials, (c) up to 65%
in the case of Eligible Work-in-Process, (d) up to 65% in the case of Eligible
Finished Goods, (e) up to 15% in the case of Eligible Supplies, and (f) up to
25% in the case of Eligible Parts.
"AFFILIATE" means, with respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
10% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "CONTROL" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE MARGIN" means (a) during the period commencing on
the Closing Date and ending on March 31, 2001, with respect to the Revolving
Loans maintained as (i) Base Rate Loans, a rate equal to 1.50% per annum and
(ii) Eurodollar Rate Loans, a rate equal to 2.50% per annum and (b) thereafter,
as of any date of determination, a per annum rate equal to the rate set forth
below opposite the applicable type of Loan and the then applicable Leverage
Ratio (determined for the period ending on the last day of the most recent
Fiscal Quarter or Fiscal Year, as applicable, for which Financial Statements
have been delivered pursuant to SECTION 6.1) set forth below:
LEVERAGE RATIO BASE RATE LOANS EURODOLLAR RATE
LOANS
------------------------------------------------------------ ----------------- -----------------
Greater than or equal to 4.75 to 1 1.75% 2.75%
Less than 4.75 to 1 and equal to or greater
than 4 to 1 1.50% 2.50%
Less than 4 to 1 and equal to or greater than 3 to 1 1.25% 2.25%
Less than 3 to 1 1.00% 2.00%
Subsequent changes in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective as to all Loans two Business Days after
delivery by the Borrower to the Administrative Agent of new financial statements
pursuant to SECTION 6.1(B) for each of the first three Fiscal Quarters of each
Fiscal Year and SECTION 6.1(C) for each Fiscal Year. Notwithstanding anything to
the contrary set forth in this Agreement (including the then effective Leverage
Ratio), if the Borrower shall fail to deliver such financial statements within
the time periods specified in SECTION 6.1(B) or (C), as applicable, the
Applicable Margin from and including the 46th day after the end of such Fiscal
Quarter or the 91st day after the end of such Fiscal Year, as the case may be,
to but not including the date the Borrower delivers to the Administrative Agent
such financial statements shall equal the highest Applicable Margin set forth
above.
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"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan, and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"APPLICABLE UNUSED COMMITMENT FEE RATE" means 0.5% per annum.
"APPROVED FUND" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"ASSET SALE" has the meaning specified in SECTION 8.4.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of EXHIBIT A.
"AVAILABILITY RESERVES" means, as of two Business Days after
the date of written notice of any determination thereof to the Borrower by the
Administrative Agent, such amounts as the Administrative Agent, as directed by
the Requisite Lenders, may from time to time establish against the Facility, in
the Requisite Lenders' sole discretion exercised reasonably and in accordance
with customary business practices for comparable asset based transactions of
$50,000,000 or more, in order either (a) to preserve the value of the Collateral
or the Administrative Agent's Lien thereon, or (b) to provide for the payment of
unanticipated liabilities of any of the Loan Parties arising after the Closing
Date.
"AVAILABLE CREDIT" means, at any time, an amount equal to (a)
the lesser of (i) the Revolving Credit Commitments in effect at such time and
(ii) the Borrowing Base at such time, MINUS (b) the sum of (i) the aggregate
Revolving Credit Outstandings at such time and (ii) any Availability Reserves in
effect at such time.
"BAILEE'S LETTER" means a letter in form and substance
reasonably acceptable to the Administrative Agent executed by any Person (other
than the Borrower) who is in possession of Inventory on behalf of the Borrower
pursuant to which such Person acknowledges, among other things, the
Administrative Agent's Lien with respect thereto.
"BANKRUPTCY CODE" means title 11, United States Code, as
amended from time to time.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Northern District of Georgia.
"BASE RATE" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum PLUS
(ii) the rate per annum obtained by dividing (A) the latest three-week
moving average of secondary market morning offering
3
rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average
being determined weekly on each Monday (or, if any such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit dealers
of recognized standing selected by Citibank, by (B) a percentage equal
to 100% MINUS the average of the daily percentages specified during
such three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) for Citibank in respect of
liabilities consisting of or including (among other liabilities)
three-month U.S. dollar nonpersonal time deposits in the United States,
PLUS (iii) the average during such three-week period of the maximum
annual assessment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits
in the United States; and
(c) the sum of (i) 0.5% per annum PLUS (ii) the Federal Funds Rate.
"BASE RATE LOAN" means any Loan during any period in which it
bears interest based on the Base Rate.
"BLOCKED ACCOUNT" has the meaning specified in the Blocked
Account Letter.
"BLOCKED ACCOUNT BANK" means Wachovia Bank or such other
financial institution selected or approved by the Administrative Agent.
"BLOCKED ACCOUNT LETTER" means the agreement between the
Blocked Account Bank and each other financial institution with which the
Borrower shall have established a Blocked Account (or any other account into
which proceeds of Accounts are deposited) and the Administrative Agent,
substantially in the form of EXHIBIT J (with such changes thereto as are
satisfactory to the Administrative Agent), as such agreements may be amended
from time to time in accordance with the terms thereof.
"BORROWING" means a borrowing consisting of Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"BORROWING BASE" means (a) the sum of (i) the product of the
Advance Rate then in effect for Eligible Receivables and the face amount of all
Eligible Receivables of the Borrower (calculated net of all finance charges,
late fees and other fees which are unearned, sales, excise or similar taxes, and
credits or allowances granted at such time), (ii) the product of the Advance
Rate then in effect for Eligible Finished Goods, Eligible Raw Materials,
Eligible Work-in-Process, Eligible Supplies and Eligible Parts (valued, in each
case, at the lower of cost and market on a first-in, first-out basis)
constituting each such class at such time of the Borrower, and (iii) the Fixed
Asset Amount then in effect, MINUS (b) any Eligibility Reserve then in effect.
"BORROWING BASE CERTIFICATE" means a certificate of the
Borrower substantially in the form of EXHIBIT E.
4
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, with respect to any Person for
any period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"CAPITAL LEASE" means, with respect to any Person, any lease
of property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person,
the capitalized amount of all obligations of such Person or any of its
Subsidiaries under Capital Leases, as determined on a consolidated basis in
conformity with GAAP.
"CASE" means the case commenced by the Borrower on January 6,
1998 under Chapter 11 of the Bankruptcy Code.
"CASH COLLATERAL ACCOUNT" means the cash collateral account
opened by the Bororwer with the Administrative Agent for the deposit of cash
collateral in accordance with the Loan Documents.
"CASH EQUIVALENTS" means (a) securities issued or fully
guaranteed or insured by the United States government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) which,
at the time of acquisition, are rated at least "A-1" by Standard & Poor's Rating
Services ("S&P") or "P-1" by ▇▇▇▇▇'▇ Investors Services, Inc. ("MOODY'S"), (c)
commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's,
and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in CLAUSES (A)
through (C) above, (ii) has net assets of not less than $500,000,000 and (iii)
is rated at least "A-1" by S&P or "P-1" by Moody's; PROVIDED, HOWEVER, that the
maturities of all obligations of the type specified in clauses (a) through (c)
above shall not exceed 180 days.
"CASH INTEREST EXPENSE" means, with respect to any Person for
any period, the Interest Expense of such Person for such period LESS the
Non-Cash Interest Expense of such Person for such period.
"CASH SWEEP EVENT" has the meaning specified in SECTION
7.12(E).
"CHANGE OF CONTROL" means any event, transaction or occurrence
as a result of which (a) Wellspring shall cease to own and control all of the
economic and voting rights associated with ownership of at least thirty-five
percent (35%) (or such higher percentage as may be necessary to ensure that
Wellspring's ownership of the outstanding Voting Stock of the Borrower exceeds
that of any other holder of Voting Stock of the Borrower (including any
5
Affiliate of any such holder) calculated on a fully-diluted basis) of the
outstanding Voting Stock of all classes of the Borrower on a fully diluted
basis; or (b) during any period of twenty-four consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of the Borrower (together with any new directors whose election by the
board of directors of the Borrower or whose nomination for election by the
stockholders of the Borrower was approved by a vote of at least a majority of
the directors then still in office who either were directors at the beginning of
such period or whose elections or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office.
"CITIBANK" means Citibank, N.A., a national banking
association.
"CITICORP" has the meaning specified in the preamble to this
Agreement.
"CLOSING DATE" means the first date on which any Loan is made
or Letter of Credit is issued.
"CODE" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Pledge and Security
Agreement, the Mortgages and any other document executed and delivered by a Loan
Party granting a Lien on any of its property to secure payment of the Secured
Obligations.
"COMPLIANCE CERTIFICATE" has the meaning specified in SECTION
6.1(D).
"CONCENTRATION ACCOUNT" has the meaning specified in Section
7.12.
"CONFIRMATION ORDER" means the order of the Bankruptcy Court
entered pursuant to Section 1129 of the Bankruptcy Code confirming the Plan of
Reorganization.
"CONSOLIDATED CURRENT ASSETS" means, with respect to any
Person at any date, the total consolidated current assets (other than cash and
Cash Equivalents) of such Person and its Subsidiaries at such date, determined
in conformity with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" means, with respect to any
Person at any date, all liabilities of such Person and its Subsidiaries at such
date which should, in accordance with GAAP, be classified as current liabilities
on a consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP, but excluding, in the case of the Borrower the sum of (a)
the principal amount of any current portion of long-term Financial Covenant Debt
and (b) (without duplication of clause (a) above) the then outstanding principal
amount of the Loans.
"CONSOLIDATED NET INCOME" means, for any Person for any
period, the net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP PROVIDED,
HOWEVER, that (a) the net income of any other Person in which such Person or one
of its Subsidiaries has a joint interest with a third party (which interest
6
does not cause the net income of such other Person to be consolidated into the
net income of such Person in accordance with GAAP) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation, (c)(i) the net income (or loss) of any Person acquired in a pooling
of interest transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an Asset Sale by such Person or
any of its Subsidiaries other than in the ordinary course of business shall be
excluded, and (d) extraordinary gains and losses and any one-time increase or
decrease to net income which is required to be recorded because of the adoption
of new accounting policies, practices or standards required by GAAP shall be
excluded.
"CONSTITUENT DOCUMENTS" means, with respect to any Person, (a)
the articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (b) the by-laws (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.
"CONTAMINANT" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"CONTRACTUAL OBLIGATION" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"CONTROL ACCOUNT LETTER" has the meaning specified in the
Pledge and Security Agreement.
"CREDITORS' COMMITTEE" means the Official Committee of
Unsecured Creditors of the Borrower appointed in the Case.
"CUSTOMARY PERMITTED LIENS" means, with respect to any Person,
any of the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of
suppliers, mechanics, carriers, materialmen, warehousemen or workmen
and other liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained to the
extent required by GAAP;
7
(c) deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed
money) and surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the
use of real property which do not materially detract from the value of
such real property or interfere with the ordinary conduct of the
business conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real
property which do not in the aggregate materially detract from the
value of such real property or interfere with the ordinary conduct of
the business conducted and proposed to be conducted at such real
property; and
(f) financing statements of a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's
business.
"DEBT ISSUANCE" means the incurrence of Indebtedness of the
type specified in CLAUSE (A) and (B) of the definition of "INDEBTEDNESS" by the
Borrower or any of its Subsidiaries.
"DEFAULT" means any event which with the passing of time or
the giving of notice or both would become an Event of Default.
"DISCLOSURE STATEMENT" means the disclosure statement of the
Borrower dated November 15, 1999, as amended, modified or supplemented from time
to time, describing the Second Amended Plan of Reorganization (and the
transactions and events contemplated thereby) filed on November 15, 1999.
"DISQUALIFIED STOCK" means with respect to any Person, any
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness of such Person, or
is redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Scheduled Termination Date.
"DOCUMENTARY LETTER OF CREDIT" means any letter of credit
issued by an Issuer pursuant to SECTION 2.4 for the account of the Borrower,
which is drawable upon presentation of documents evidencing the sale or shipment
of goods purchased by the Borrower or any of its Subsidiaries in the ordinary
course of its business.
"DOLLARS" and the sign "$" each mean the lawful money of the
United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on SCHEDULE II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
8
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower
organized under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, with respect to any Person for any period, an
amount equal to (a) Consolidated Net Income of such Person for such period PLUS
(b) the sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items and (iv)
depreciation, depletion and amortization of intangibles or financing or
acquisition costs, (v) all other non-cash charges and non-cash losses for such
period, including the amount of any compensation deduction as the result of any
grant of Stock or Stock Equivalents to employees, officers, directors or
consultants and (vi) to the extent not included under clause (iii) above, all
non-recurring restructuring charges (including severance payments) associated
with the closing or downsizing of a plant or other facility MINUS (c) the sum
of, in each case to the extent included in the calculation of such Consolidated
Net Income but without duplication, (i) any credit for income tax, (ii) interest
income, (iii) gains from extraordinary items for such period, (iv) any aggregate
net gain (but not any aggregate net loss) from the sale, exchange or other
disposition of capital assets by such Person, and (v) any other non-cash gains
or other items which have been added in determining Consolidated Net Income,
including any reversal of a change referred to in CLAUSE (B)(V) above by reason
of a decrease in the value of any Stock or Stock Equivalent.
"EFFECTIVE DATE OF REORGANIZATION" means the first date on
which the Plan of Reorganization shall have become effective in accordance with
its terms.
"ELIGIBILITY RESERVES" means, effective as of two Business
Days after the date of written notice of any determination thereof to the
Borrower by the Administrative Agent, such amounts as the Administrative Agent,
in its sole discretion, may from time to time establish against the gross
amounts of Eligible Receivables, Eligible Finished Goods, Eligible Raw
Materials, Eligible Supplies, Eligible Work-in-Process and Eligible Parts to
reflect risks or contingencies which may affect any one or class of such items
and which have not already been taken into account in the calculation of the
Borrowing Base.
"ELIGIBLE ASSIGNEE" means (a) a Lender or any Affiliate or
Approved Fund of such Lender; (b) a commercial bank having total assets in
excess of $5,000,000,000; (c) a finance company, insurance company, other
financial institution or fund reasonably acceptable to the Administrative Agent,
which is regularly engaged in making, purchasing or investing in loans, and
having total assets in excess of $250,000,000 or, to the extent assets are less
than such amount, a finance company, insurance company, other financial
institution or fund, reasonably acceptable to the Administrative Agent and the
Borrower; or (d) a savings and loan association or savings bank organized under
the laws of the United States or any State thereof which has a net worth,
determined in accordance with GAAP, in excess of $250,000,000.
"ELIGIBLE EQUIPMENT" means the Equipment of the Borrower (a)
which is owned solely by the Borrower, (b) with respect to which the
Administrative Agent has a valid and perfected first priority Lien (subject to
Customary Permitted Liens), (c) with respect to which no representation or
warranty contained in any of the Loan Documents has been breached, (d) which is
not, in the Administrative Agent's sole discretion, obsolete or unmerchantable
and (e) which the Administrative Agent deems to be Eligible Equipment, based on
such credit and collateral considerations as the Administrative Agent may, in
its sole discretion, deem appropriate.
9
"ELIGIBLE FINISHED GOODS" means Inventory comprised of
finished goods (which are classified, consistent with past practice, as Eligible
Finished Goods in the Borrower's accounting system) and which is otherwise
Eligible Inventory.
"ELIGIBLE INVENTORY" means the Inventory of the Borrower
(other than any Inventory which has been consigned by the Borrower) including
raw materials, work-in-process, finished goods, parts and supplies (a) which is
owned solely by the Borrower, (b) with respect to which the Administrative Agent
has a valid and perfected first priority Lien, (c) with respect to which no
representation or warranty contained in any of the Loan Documents has been
breached, (d) which is not, in the Administrative Agent's sole discretion,
obsolete or unmerchantable, (e) with respect to which (in respect of any
Inventory labeled with a brand name or trademark and sold by the Borrower
pursuant to a trademark owned by the Borrower or a license granted to the
Borrower) the Administrative Agent would have rights under such trademark or
license pursuant to the Pledge and Security Agreement or other agreement
satisfactory to the Administrative Agent to sell such Inventory in connection
with a liquidation thereof, and (f) which the Administrative Agent deems to be
Eligible Inventory based on such credit and collateral considerations as the
Administrative Agent may, in its sole discretion, deem appropriate. No Inventory
of the Borrower shall be Eligible Inventory if such Inventory consists of (i)
goods returned or rejected by customers other than goods that are undamaged or
are resaleable in the normal course of business, (ii) goods to be returned to
its suppliers, (iii) goods located, stored, used or held at any of the
Borrower's current sales offices located in Washington, Arizona, New York, Utah
or Ohio, (iv) goods in transit to third parties, or (v) goods located at the
premises of a third party, unless in the case of (v) (i)(A) the Administrative
Agent shall have received a Landlord Waiver or Bailee's Letter or (B) in the
case of Inventory located at a leased premises, an Eligibility Reserve
satisfactory to the Administrative Agent shall have been established with
respect thereto and (ii) an appropriate UCC-1 financing statement shall have
been executed and properly filed.
"ELIGIBLE PARTS" means Inventory comprised of parts (which are
classified, consistent with past practice, as Eligible Parts in the Borrower's
accounting system) and which is otherwise Eligible Inventory but which do not
constitute Eligible Supplies.
"ELIGIBLE RAW MATERIALS" means Inventory comprised of raw
materials (which are classified, consistent with past practice, as Eligible Raw
Materials in the Borrower's accounting system) and which is otherwise Eligible
Inventory but which do not constitute Eligible Supplies or Eligible Parts.
"ELIGIBLE REAL PROPERTY" means any parcel of owned Real
Property in the United States of the Borrower and the Subsidiary Guarantors as
to which each of the following conditions has been satisfied at such time:
(a) (i) a first priority perfected Lien on such parcel of Real
Property (subject to Customary Permitted Liens) shall have been granted
by the Borrower in favor of the Administrative Agent pursuant to a
Mortgage and (ii) such Lien shall be in full force and effect in favor
of the Administrative Agent at such time;
(b) except as otherwise permitted by the Administrative Agent,
the Administrative Agent and the title insurance company issuing the
policy referred to in CLAUSE (C) of this definition shall have received
maps or plats of an as-built survey of such parcel of Real Property
certified to the Administrative Agent and such title insurance
10
company in a manner reasonably satisfactory to them, dated a date
reasonably satisfactory to the Administrative Agent and such title
insurance company, by an independent professional licensed land
surveyor reasonably satisfactory to the Administrative Agent and such
title insurance company, which maps or plats and the surveys on which
they are based shall be made in form and substance satisfactory to the
Administrative Agent;
(c) the Administrative Agent shall have received in respect of
such parcel of Real Property (i) a mortgagee's title policy (or
policies) ("MORTGAGEE'S TITLE INSURANCE POLICY") dated a date
reasonably satisfactory to the Administrative Agent, and such policy
shall (A) be in an amount not less than the Mortgage Value (as of the
Closing Date) of such parcel of Real Property, (B) be issued at
ordinary rates, (C) insure that the Lien granted pursuant to the
Mortgage insured thereby creates a valid first Lien on such parcel of
Real Property free and clear of all defects and encumbrances, except
such as may be approved by the Administrative Agent and Customary
Permitted Liens, (D) name the Administrative Agent for the benefit of
the Secured Parties as the insured thereunder, (E) be in the form of
ALTA Loan Policy - 1992 (or such local equivalent thereof as is
reasonably satisfactory to the Administrative Agent), (F) contain a
comprehensive lender's endorsement and any other endorsements
reasonably required by the Administrative Agent (including, but not
limited to, a revolving credit endorsement and a floating rate
endorsement, if reasonably available) and (G) be issued by Chicago
Title Insurance Company, First American Title Insurance Company,
Lawyers Title Insurance Corporation or any other title company
reasonably satisfactory to the Administrative Agent (including any such
title companies acting as co-insurers or reinsurers), (ii) evidence
satisfactory to it that all premiums in respect of each such policy,
all recording fees and stamp, documentary, intangible or mortgage
taxes, if any, in connection with the Mortgage have been paid and (iii)
a copy of all documents referred to, or listed as exceptions to title,
in such title policy (or policies);
(d) the Administrative Agent shall have received an appraisal (in
the case of any appraisals received after the Closing Date, dated as of
a date reasonably acceptable to the Administrative Agent) with respect
to such parcel of Real Property that is satisfactory in form and
substance to the Administrative Agent and performed by an appraiser
that is satisfactory to the Administrative Agent;
(e) a Phase I environmental report with respect to such parcel
of Real Property, dated a date not more than one year prior to the
Closing Date, showing no material condition of environmental concern
shall have been delivered to the Administrative Agent and in form
reasonably satisfactory to the Administrative Agent;
(f) no casualty shall have occurred materially affecting the
value or affecting the use or operation of such parcel of Real Property
if such casualty has not been restored or repaired by the mortgagor
under the Mortgage encumbering such parcel of Real Property;
(g) no condemnation or taking by eminent domain shall have
occurred nor shall any notice of any pending or threatened condemnation
or other proceeding against such parcel of Real Property been delivered
to the owner or lessee of such parcel of Real Property which would
materially affect the use, operation or value of such; and
11
(h) the mortgagor under the relevant Mortgage encumbering such
parcel of Real Property shall (i) make such representations and
warranties and covenants as are reasonably required by the
Administrative Agent, (ii) in all material respects comply with all
Requirements of Law of any Governmental Authority applicable to such
parcel of Real Property or to the use or occupancy thereof, and (iii)
pay and discharge all taxes of every kind and nature, all assessments,
all water and sewer rents and charges and all other charges which may
become a lien on the Real Property on or before the date the same
becomes delinquent.
"ELIGIBLE RECEIVABLE" means the gross outstanding balance of
those Accounts of the Borrower arising out of sales of merchandise, goods or
services in the ordinary course of business, which are made by the Borrower to a
Person that is not an Affiliate of the Borrower, which are not in dispute, and
that constitute Collateral in which the Administrative Agent has a fully
perfected first priority Lien (subject to Customary Permitted Liens); PROVIDED,
HOWEVER, that an Account shall in no event be an Eligible Receivable if:
(a) (i) such Account is more than 60 days past due according
to the original terms of sale, or (ii) 90 days past the original
invoice date thereof; or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct
with respect to such Account; or
(c) the Account Debtor on such Account has disputed liability
or made any claim with respect to any other Account due from such
Account Debtor to the Borrower but only to the extent of such dispute
or claim; or
(d) the Account Debtor on such Account has: (i) filed a petition
for bankruptcy or any other relief under the Bankruptcy Code or any
other law relating to bankruptcy, insolvency, reorganization or relief
of debtors; (ii) made an assignment for the benefit of creditors; (iii)
had filed against it any petition or other application for relief under
the Bankruptcy Code or any such other law; (iv) has failed, suspended
business operations, become insolvent, called a meeting of its
creditors for the purpose of obtaining any financial concession or
accommodation; or (v) had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs,
unless such Account Debtor (A) is a debtor-in-possession in a case then
pending under chapter 11 of the Bankruptcy Code, (B) has established
debtor-in-possession financing which is satisfactory to the
Administrative Agent in its sole discretion and (C) otherwise satisfies
each of the requirements set forth in this definition of Eligible
Receivables; or
(e) the Account Debtor on such Account or any of its Affiliates
is also a supplier to or creditor of the Borrower unless such supplier
or creditor has executed a no-offset letter satisfactory to the
Administrative Agent, in its sole discretion; or
(f) the sale represented by such Account is to an Account Debtor
located outside the United States or Canada, unless the sale is on
letter of credit or acceptance terms acceptable to the Administrative
Agent, in its sole discretion; or
(g) the sale to such Account Debtor on such Account is on a ▇▇▇▇-
on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
12
(h) such Account is subject to a Lien in favor of any Person other
than the Administrative Agent for the benefit of the Secured Parties;
or
(i) such Account is subject to any deduction, offset,
counterclaim, return privilege or other conditions other than volume
sales discounts given in the ordinary course of the Borrower's
business; or
(j) the Account Debtor on such Account is located in New
Jersey or Minnesota, unless the Borrower (i) has received a certificate
of authority to do business and is in good standing in such state or
(ii) has filed a Notice of Business Activities Report with the
appropriate office or agency of such state for the current year; or
(k) the Account Debtor on such Account is a Governmental
Authority, unless the Borrower has assigned its rights to payment of
such Account to the Administrative Agent pursuant to the Assignment of
Claims Act of 1940, as amended, in the case of a federal Governmental
Authority, and pursuant to applicable law, if any, in the case of any
other Governmental Authority, and such assignment has been accepted and
acknowledged by the appropriate government officers; or
(l) 50% or more of the outstanding Accounts of the Account Debtor
have become, or have been determined by the Administrative Agent, in
accordance with the provisions hereof, to be, ineligible; or
(m) the sale represented by such Account is denominated in a
currency other than Dollars or Canadian Dollars; or
(n) such Account is not evidenced by an invoice or other writing
in form acceptable to the Administrative Agent, in its sole discretion;
or
(o) the Borrower, in order to be entitled to collect such
Account, is required to perform any additional service for, or perform
or incur any additional obligation to, the Person to whom or to which
it was made; or
(p) the total Accounts of such Account Debtor to the Borrower
represent more than 20%, (or, in the case of Wal-Mart and its
Affiliates, 50%) of the Eligible Receivables individually or in the
aggregate as to the Borrower at such time, but only to the extent of
such excess; or
(q) the total Accounts of all Account Debtors located in Canada
to the Borrower represent more than 20% of the Eligible Receivables
individually or in the aggregate as to the Borrower at such time, but
only to the extent of such excess.
"ELIGIBLE SUPPLIES" means Inventory comprised of materials
used or consumed or to be used or consumed in the manufacture, processing,
packaging, delivery or shipping of Eligible Finished Goods (which are
classified, consistent with past practice, as Eligible Supplies in the
Borrower's consolidated accounting system) and which is otherwise Eligible
Inventory but which do not constitute Eligible Parts.
13
"ELIGIBLE WORK-IN-PROCESS" means Inventory comprised of
work-in-process which is classified, consistent with past practice, as Eligible
Work-in-Process in the Borrower's consolidated accounting system) and which is
otherwise Eligible Inventory.
"ENVIRONMENTAL LAWS" means all applicable Requirements of Law
now or hereafter in effect, as amended or supplemented from time to time,
relating to pollution or the regulation and protection of human health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 ET SEQ.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 180 ET SEQ.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 ET SEQ.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 ET SEQ.); the Toxic Substance
Control Act, as amended (42 U.S.C. Section 7401 ET SEQ.); the Clean Air Act, as
amended (42 U.S.C. Section 740 ET SEQ.); the Federal Water Pollution Control
Act, as amended (33 U.S.C.Section 1251 ET SEQ.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 ET SEQ.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f ET SEQ.); and their state and local
counterparts or equivalents and any transfer of ownership notification or
approval statute, including the Industrial Site Recovery Act (N.J. Stat. ▇▇▇.
Section 13:1K-6 ET SEQ.).
"ENVIRONMENTAL LIABILITIES AND COSTS" means, with respect to
any Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means any "equipment," as such term is defined in
Section 9-109(2) of the New York UCC, now owned or hereafter acquired by the
Borrower.
"EQUITY ISSUANCE" means the issue or sale of any Stock of the
Borrower or any of the Subsidiaries of the Borrower by the Borrower or any of
the Subsidiaries of the Borrower to any Person other than the Borrower or any of
such Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA EVENT" means (a) a reportable event described in
Section 4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with
respect to a Title IV Plan or a Multiemployer Plan; (b) the withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it
14
was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of the Borrower, any of its Subsidiaries or any
ERISA Affiliate from any Multiemployer Plan; (d) notice of reorganization or
insolvency of a Multiemployer Plan; (e) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any
required contribution to a Title IV Plan or Multiemployer Plan; (h) the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA on
the Borrower or any of its Subsidiaries or any ERISA Affiliate; or (i) any other
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 Title IV Plan or Multiemployer Plan or the imposition
of any liability under Title IV of ERISA, other than for PBGC premiums due but
not delinquent under Section 4007 of ERISA.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"EURODOLLAR BASE RATE" means the rate determined by the
Administrative Agent to be the offered rate for deposits in Dollars for the
applicable Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on the second full Business Day before the first day of each
Interest Period. In the event that such rate does not appear on Telerate Page
3750 (or otherwise on the Dow ▇▇▇▇▇ Markets screen), the Eurodollar Base Rate
for the purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent, or, in the absence of such
availability, the Eurodollar Base Rate shall be the rate of interest determined
by the Administrative Agent to be the average (rounded upward to the nearest
whole multiple of 1/16 of one percent per annum, if such average is not such a
multiple) of the rates per annum at which deposits in Dollars are offered by the
principal office of Citibank in London to major banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the Eurodollar Rate
Loan of Citibank for a period equal to such Interest Period.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on SCHEDULE II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, with respect to any Interest Period
for any Eurodollar Rate Loan, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage
equal to 100% MINUS the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities which includes deposits by
reference to which the Eurodollar Rate is determined) having a term equal to
such Interest Period.
"EURODOLLAR RATE LOAN" means any Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.
15
"EVENT OF DEFAULT" has the meaning specified in SECTION 10.1.
"EXCLUDED PROPERTY" has the meaning set forth in Section
8.4(f).
"EXISTING FOREIGN JOINT VENTURE AGREEMENTS" means (a) that
certain Pledge Agreement dated as of January 26, 1996 by and among PTB
International, Inc., International Disposable Products Investments, Ltd. and
▇▇▇▇▇▇▇▇▇ Trust Company; (b) that certain Investment Agreement dated January 26,
1996 by and among ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Grupo P.I. ▇▇▇▇, ▇.▇. de C.V.,
the Company, and PTB International, Inc.; (c) that certain Put and Call Option
Agreement for Grupo ▇▇▇▇ Shares dated as of January 26, 1996 between ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the Company, PTB International, Inc. and Grupo P.I.
▇▇▇▇, ▇.▇. de C.V.; (d) that certain Joint Venture Agreement dated January 26,
1996 by and between ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the Company and PTB
International, Inc. and Paragon Mabesa International de C.V.; (e) that certain
Shareholder Agreement dated August 26, 1997 by and between PTB International,
Inc. and Euro America 2000 Trust; (f) that certain Shareholders Agreement of
Serenity S.A. dated August 26, 1997 by and among Stronger Corporation S.A.,
Cerro Moteado S.A., PTB International, Inc., Euro American 2000 Trust, Mr. Mario
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; (g) that certain Irrevocable Call
Option Agreement dated as of November 6, 1996 by and between International
Disposable Products Investments, Ltd. (now, Hortela Investiments, S.A. by reason
of merger), PTB International, Inc., Juliette Research S.A. and the Company; (h)
that certain Facility Financing Side Letter dated January 26, 1996 by and among
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PTB International, Inc. and the Company; (i)
Articles of Association of Goodbaby Paragon Hygienic Products Co. Ltd.; (j) that
certain Joint Venture Contract dated September 30, 1997 among Goodbaby Group
Co., the Company and First Shanghai Investments Ltd.; (k) that certain
Technology License Agreement dated January 26, 1996 by and between Grupo P.I.
▇▇▇▇, ▇.▇. de C.V. and the Company; (l) that certain Technology License
Agreement dated January 26, 1996 by and between Paragon Mabesa International,
S.A. de C.V. and the Company; (m) that certain Transfer of Technology and
Licensing Contract dated as of September 30, 1997 by and between the Company and
Goodbaby Paragon Hygienic Products Co. Ltd.; (n) that certain Product Supply and
Services Agreement dated January 26, 1996 by and between Paragon-Mabesa
International, S.A. de C.V. and the Company, as amended by First Amendment to
the Product Supply and Services Agreement dated March 14, 1997; (o) those
certain Purchase Loan and Security Agreements by and between Paragon-Mabesa
International, S.A. de C.V. and the Company; and (p) that certain Agreement as
to Contingent Labor Liability regarding the facility in Tijuana, and any other
document, instrument or agreement relating to any of the foregoing in each case
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"FACILITY" means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
"FAIR MARKET VALUE" means (a) with respect to any asset or
group of assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the Borrower, or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal, and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next
16
preceding such date, as appearing in any published list of any national
securities exchange or the Nasdaq Stock Market or, if there is no such closing
sale price of such Security, the final price for the purchase of such Security
at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type selected by
the Administrative Agent.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"FEE LETTER" shall mean the letter dated as of October 13,
1999, addressed to the Borrower from Citicorp and accepted by the Borrower on
October 15, 1999, with respect to certain fees to be paid from time to time to
Citicorp and the Arranger.
"FINANCIAL COVENANT DEBT" of any Person means Indebtedness of
the type specified in CLAUSES (A), (B), (D), (E), (F) and (H) of the definition
of "INDEBTEDNESS".
"FINANCIAL STATEMENTS" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with SECTIONS 4.4 and 6.1.
"FINAL ORDER" means an order of the Bankruptcy Court that is
in effect and is not stayed, and as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue or rehear shall have been waived in writing in form and
substance reasonably satisfactory to the Borrower, or in the event that an
appeal, writ of certiorari or reargument or rehearing thereof has been sought,
such order of the Bankruptcy Court shall have been affirmed by the highest court
to which such order was appealed, or certiorari, reargument or rehearing has
been denied, and the time to take any further appeal, petition for certiorari or
move for reargument or rehearing shall have expired.
"FISCAL MONTH" means (a) for the Fiscal Year ending on
December 31, 2000, each of the monthly periods ending on January 28, February
27, March 26, April 30, May 28, June 25, July 30, August 27, September 24,
October 29, November 26 and December 31; (b) for the Fiscal Year ending on
December 30, 2001, each of the monthly periods ending on February 4, March 4,
April 1, May 6, June 3, July 1, August 5, September 2, September 30, November 4,
December 2 and December 30; and (c) for the Fiscal Year ending on December 29,
2002, each of the monthly periods ending on February 3, March 3, March 31, May
5, June 2, June 30, August 4, September 1, September 29, November 3, December 1
and December 29.
"FISCAL QUARTER" means (a) for the Fiscal Year ending on
December 31, 2000, each of the three month periods ending on March 26, June 25,
September 24 and December 31,
17
and, in the case of the first Fiscal Quarter ending after the Closing Date, the
period from the Closing Date through March 26, 2000, PROVIDED, HOWEVER, that the
Fiscal Quarter ending March 26, 2000 shall commence on January 28, 2000; (b) for
the Fiscal Year ending on December 30, 2001, each of the three month periods
ending on April 1, July 1, September 30 and December 30; and (c) for the Fiscal
Year ending on December 29, 2002, each of the three month periods ending on
March 31, June 30, September 29 and December 29.
"FISCAL YEAR" means the twelve month periods ending on
December 31, 2000, December 30, 2001 and December 29, 2002; PROVIDED that the
Fiscal Year ending December 31, 2000 shall be deemed to begin on the Closing
Date.
"FIXED ASSET AMOUNT" means (A) prior to the satisfaction of
the conditions set forth in SECTION 3.3, $15,000,000; and (B) thereafter, the
lesser of (a) $30,000,000 and (b) the sum of (i) 75% of the orderly liquidation
value of the Borrower's Eligible Equipment and (ii) 50% of the Fair Market Value
of the Borrower's Eligible Real Property, as determined by the Administrative
Agent on the basis of the most recent appraisal provided to the Administrative
Agent in accordance with SECTION 6.11; PROVIDED, HOWEVER, that the Fixed Asset
Amount shall be further adjusted as required by SECTIONS 6.11(D) AND 8.4.
"FIXED CHARGES" means, for any Person for any period, the sum
of (a) the Cash Interest Expense of such Person for such period, (b) the
principal amount of Financial Covenant Debt of such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP having a
scheduled due date during such period, and (c) all cash dividends payable by
such Person and its Subsidiaries on Stock in respect of such period to Persons
other than such Person and its Subsidiaries.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person for any period, the ratio of (a) EBITDA less Capital Expenditures of such
Person for such period less the total federal income tax liability actually
payable by such Person for such period to (b) the Fixed Charges of such Person
for such period.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY" means the guaranty, in substantially the form of
EXHIBIT H, executed by each Subsidiary Guarantor.
"GUARANTY OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness of another Person, if the purpose or intent of such
Person in incurring the Guaranty Obligation is to provide assurance to the
obligee of such Indebtedness that such Indebtedness will be paid or discharged,
or that any agreement relating thereto will be complied with, or that any holder
of such
18
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of CLAUSE (B) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any Guaranty
Obligation shall be equal to the amount of the Indebtedness so guaranteed or
otherwise supported.
"HEDGING CONTRACTS" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"INDEBTEDNESS" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or which
bear interest, (c) all reimbursement and all obligations with respect to letters
of credit, bankers' acceptances, surety bonds and performance bonds, whether or
not matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business
which are not overdue, (e) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (f) all Capital Lease Obligations of
such Person, (g) all Guaranty Obligations of such Person, (h) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any Stock or Stock Equivalents of such Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (i) all payments that such Person
would have to make in the event of an early termination on the date Indebtedness
of such Person is being determined in respect of Hedging Contracts of such
Person and (j) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including Accounts and general
intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.
"INDEMNITEES" has the meaning specified in SECTION 12.5.
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"INTEREST COVERAGE RATIO" means, with respect to any Person
for any period, the ratio of EBITDA of such Person for such period to Interest
Expense of such Person for such period.
"INTEREST EXPENSE" means, for any Person for any period, (a)
total interest expense of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP that is reflected in
Consolidated Net Income and including, in any event, interest capitalized during
construction for such period and net costs under Interest Rate Contracts for
such period MINUS (b) the sum of (i) net gains of such Person and its
Subsidiaries under Interest Rate Contracts for such period determined on a
consolidated basis in conformity with GAAP PLUS (ii) any interest income of such
Person and its Subsidiaries for such period determined on a consolidated basis
in conformity with GAAP.
"INTEREST PERIOD" means, in the case of any Eurodollar Rate
Loan, (a) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to SECTION 2.2 or 2.11, and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to SECTION 2.11, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to SECTION 2.11;
PROVIDED, HOWEVER, that all of the foregoing provisions relating to Interest
Periods in respect of Eurodollar Rate Loans are subject to the following:
(ii) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day, unless the result of such
extension would be to extend such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month;
(iv) the Borrower may not select any Interest Period
that ends after the date of a scheduled principal payment on the Loans
as set forth in ARTICLE II unless, after giving effect to such
selection, the aggregate unpaid principal amount of the Loans for which
Interest Periods end after such scheduled principal payment shall be
equal to or less than the principal amount to which the Loans are
required to be reduced after such scheduled principal payment is made;
(v) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than
$2,000,000; and
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(vi) there shall be outstanding at any one time no more
than five Interest Periods in the aggregate.
"INTEREST RATE CONTRACTS" means all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance.
"INVESTMENT" means, with respect to any Person, (a) any
purchase or other acquisition by that Person of (i) any Security issued by, (ii)
a beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
and (c) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, accounts receivable and
similar items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business.
"INVENTORY" means any "inventory," as such term is defined in
Section 9-109(4) of the New York UCC, now owned or hereafter acquired by the
Borrower, and wherever located.
"IRS" means the Internal Revenue Service of the United States
or any successor thereto.
"ISSUER" means each Lender or Affiliate of a Lender that (a)
is listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes
an Issuer with the approval of the Administrative Agent and the Borrower by
agreeing pursuant to an agreement with and in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower to be bound by the
terms hereof applicable to Issuers.
"LANDLORD WAIVER" means a letter in form and substance
reasonably acceptable to the Administrative Agent, executed by a landlord in
respect of Inventory of the Borrower located at any leased premises of the
Borrower pursuant to which such landlord, among other things, waives or
subordinates any Lien such landlord may have in respect of such Inventory.
"LEASES" means, with respect to any Person, all of those
leasehold estates in real property of such Person, as lessee, as such may be
amended, supplemented or otherwise modified from time to time.
"LENDER" means each financial institution or other entity that
(a) is listed on the signature pages hereof as a "Lender" or (b) from time to
time becomes a party hereto by execution of an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to SECTION 2.4.
"LETTER OF CREDIT OBLIGATIONS" means, at any time, the
aggregate of all liabilities at such time of the Borrower to all Issuers with
respect to Letters of Credit, whether or not any such liability is contingent,
and includes the sum of (a) the Reimbursement Obligations at such time and (b)
the Letter of Credit Undrawn Amounts at such time.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" has the meaning
specified in SECTION 2.4(E).
"LETTER OF CREDIT REQUEST" has the meaning specified in
SECTION 2.4(C).
21
"LETTER OF CREDIT SUBLIMIT" has the meaning specified in
SECTION 2.4(A)(IV).
"LETTER OF CREDIT UNDRAWN AMOUNTS" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.
"LEVERAGE RATIO" means, with respect to any Person for any
period, the ratio of (a) Financial Covenant Debt of such Person as of the last
day of such period to (b) EBITDA for such Person for such period.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge, deposit arrangement, encumbrance, lien
(statutory or other), conveyance of security title, security interest or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever intended to assure payment of any Indebtedness or
other obligation, including any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing.
"LOAN" means any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS" means, collectively, this Agreement, the
Revolving Credit Notes (if any), the Guaranty, the Fee Letter, each Letter of
Credit Reimbursement Agreement, the Collateral Documents and each certificate,
agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.
"LOAN PARTY" means each of the Borrower, each Subsidiary
Guarantor and each other Subsidiary of the Borrower that executes and delivers a
Loan Document.
"MABESA OPTION" means the Borrower's call option to acquire up
to an additional 36% interest in the Stock of Grupo Mabesa, S.A. de C.V., a
Mexican corporation ("Mabesa"), pursuant to the Irrevocable Call Option
Agreement dated as of November 6, 1996 among the Borrower, Hortela
Investimentos, S.A (successor by merger to International Disposable Products
Investments, Ltd.), PTB International, Inc. and Juliette S.A..
"MATERIAL ADVERSE CHANGE" means a material adverse change in
any of (a) the condition (financial or otherwise), business, performance,
prospects, operations or properties of the Borrower individually or the Borrower
and its Subsidiaries taken as a whole, (b) the legality, validity or
enforceability of any Loan Document, (c) the perfection or priority of the Liens
granted pursuant to the Collateral Documents (subject to Liens permitted under
Section 8.2), (d) the ability of the Borrower to repay the Obligations or of the
Loan Parties to perform their obligations under the Loan Documents, or (e) the
rights and remedies of the Administrative Agent or the Lenders under the Loan
Documents.
"MATERIAL ADVERSE EFFECT" means an effect that results in or
causes, or could reasonably be expected to result in or cause, a Material
Adverse Change.
"MATERIAL SUBSIDIARY" means any wholly-owned Subsidiary of the
Borrower owning at least 10% of Total Assets generating at least 10% of
Consolidated Net Income of the Borrower and its Subsidiaries on a consolidated
basis.
22
"MAXIMUM CREDIT" means, at any time, (a) the lesser of (i) the
Revolving Credit Commitments in effect at such time and (ii) the Borrowing Base
at such time MINUS (b) the aggregate amount of any Availability Reserve in
effect at such time.
"MORTGAGE VALUE" means, with respect to any parcel of
Eligible Real Property, the value of such parcel of Eligible Real Property at
the time the applicable Mortgage was recorded as set forth in the appraisal
delivered to and approved by the Administrative Agent with respect thereto.
"MORTGAGEE'S TITLE INSURANCE POLICY" has the meaning specified
in the definition of Eligible Real Property.
"MORTGAGES" means the mortgages, deeds of trust or other real
estate security documents made or required herein to be made by the Borrower or
any other Loan Party.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries
or any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"NET CASH PROCEEDS" means (a) proceeds received by the
Borrower or any of its Subsidiaries after the Closing Date in cash or Cash
Equivalents from any Asset Sale, other than Asset Sales permitted under CLAUSES
(A) through (E) and CLAUSE (G) and (H) of SECTION 8.4, net of (i) the reasonable
cash costs of sale, assignment or other disposition, (ii) taxes paid or payable
as a result thereof and (iii) any amount required to be paid or prepaid on
Indebtedness (other than the Obligations) secured by the assets subject to such
Asset Sale; PROVIDED, HOWEVER, that the evidence of each of (I), (II) and (III)
are provided to the Administrative Agent in form reasonably satisfactory to it;
(b) proceeds of insurance on account of the loss of or damage to any assets or
property, and payments of compensation for any such assets or property taken by
condemnation or eminent domain; and (c) proceeds received after the Closing Date
by any Loan Party in cash or Cash Equivalents from (i) any Equity Issuance
(other than any such issuance of common Stock of the Borrower occurring in the
ordinary course of business to any director, member of the management or
employee of the Borrower or its Subsidiaries or pursuant to the Option
Agreement, the Warrant Agreement or Plan of Reorganization (as each such
agreement is in effect on the Closing Date)), or (ii) any Debt Issuance (except
for Indebtedness permitted under SECTION 8.1), in each case net of brokers' and
advisors' fees and other costs incurred in connection with such transaction;
PROVIDED, HOWEVER, that evidence of such costs is provided to the Administrative
Agent.
"NET WORTH" of any Person means, at any date, the
stockholders' equity that would be reflected on a consolidated balance sheet of
such Person and its Subsidiaries at such date prepared in conformity with GAAP.
"NEW YORK UCC" means the Uniform Commercial Code in effect in
the State of New York.
"NON-CASH INTEREST EXPENSE" means, with respect to any Person
for any period, the sum of the following amounts to the extent included in the
calculation of Interest Expense of such Person for such period: (a) the amount
of debt discount and debt issuances costs amortized, (b) charges relating to
write-ups or write-downs in the book or carrying value of existing
23
Financial Covenant Debt and (c) interest payable in evidences of Indebtedness or
by addition to the principal of the related Indebtedness.
"NON-FUNDING LENDER" has the meaning specified in SECTION
2.2(D).
"NON-U.S. LENDER" means each Lender or Administrative Agent
that is not a United States person as defined in Section 7701(a)(30) of the
Code.
"NOTICE OF BORROWING" has the meaning specified in SECTION
2.2(A).
"NOTICE OF CONVERSION OR CONTINUATION" has the meaning
specified in SECTION 2.11.
"OBLIGATIONS" means the Loans, the Letter of Credit
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties owing by the Borrower to the Administrative Agent, any Lender, any
Issuer, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future, arising under this Agreement or under any other
Loan Document, by reason of an extension of credit, opening or amendment of a
Letter of Credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification, foreign exchange transaction, Hedging Contract or otherwise,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired and whether or not evidenced by any note, guaranty or other instrument
or for the payment of money. The term "OBLIGATIONS" includes all letter of
credit, cash management and other fees and all interest, charges, expenses,
fees, attorneys' fees and disbursements and other sums chargeable to the
Borrower under this Agreement or any other Loan Document and all obligations of
the Borrower to cash collateralize Letter of Credit Obligations.
"Option Agreement" means the option agreement dated as of
January 28, 2000 between the Borrower, as grantor, and PTB Acquisition Company,
LLC, as grantee, relating to the sale of Stock of the Borrower to provide funds
for the exercise of the Mabesa Option.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMIT" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, estate, trust, limited
liability company, unincorporated association, joint venture or other entity, or
a Governmental Authority.
"PLAN OF REORGANIZATION" means the Modified Second Amended
Plan of Reorganization of the Borrower under Chapter 11 of the Bankruptcy Code,
filed in the Case by the Borrower and the Creditors' Committee on January 13,
2000.
"PLEDGE AND SECURITY AGREEMENT" means an agreement, in
substantially the form of EXHIBIT I, executed by the Borrower and each
Subsidiary Guarantor.
"PRO FORMA BALANCE SHEET" has the meaning specified in SECTION
4.4(D).
24
"PROJECTIONS" means those financial projections dated
September 7, 1999 covering the fiscal years ending in 2000 through 2003,
inclusive, to be delivered to the Lenders by the Borrower.
"RATABLE PORTION" or "RATABLY" means, with respect to any
Lender, the percentage obtained by dividing (a) the Revolving Credit Commitment
of such Lender by (b) the aggregate Revolving Credit Commitments of all Lenders
(or, at any time after the Revolving Credit Termination Date, the percentage
obtained by dividing the aggregate outstanding principal balance of the
Revolving Credit Outstandings owing to such Lender by the aggregate outstanding
principal balance of the Revolving Credit Outstandings owing to all Lenders).
"REAL PROPERTY" means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased by the Borrower or any of
its Subsidiaries (the "LAND"), together with the right, title and interest of
the Borrower, if any, in and to the streets, the land lying in the bed of any
streets, roads or avenues, opened or proposed, in front of, the air space and
development rights pertaining to the Land and the right to use such air space
and development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefiting the Land and all
royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
"REGISTER" has the meaning specified in SECTION 11.3.
"REIMBURSEMENT OBLIGATIONS" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"RELATED DOCUMENTS" means the Senior Subordinated Notes, the
Senior Subordinated Note Indenture, the Warrant Agreement, the Warrants and the
Plan of Reorganization.
"RELEASE" means, with respect to any Person, any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration, in each case, of any Contaminant into the
indoor or outdoor environment or into or out of any property owned by such
Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"REMEDIAL ACTION" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"REORGANIZATION" means the reorganization of the Borrower
described in the Plan of Reorganization.
"REQUIREMENT OF LAW" means, with respect to any Person, the
common law and all federal, state, local and foreign laws, rules and
regulations, orders, judgments, decrees and
25
other determinations of any Governmental Authority or arbitrator, applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"REQUISITE LENDERS" means, collectively, Lenders having more
than fifty-one percent (51%) of the aggregate outstanding amount of the
Revolving Credit Commitments or, after the Revolving Credit Termination Date,
fifty-one percent (51%) of the aggregate Revolving Credit Outstandings. A
Non-Funding Lender shall not be included in the calculation of "REQUISITE
LENDERS."
"RESPONSIBLE OFFICER" means, with respect to any Person, any
of the principal executive officers, managing members or general partners of
such Person, but in any event, with respect to financial matters, the chief
financial officer, treasurer or controller of such Person.
"RESTRICTED PAYMENT" means (a) any dividend or other
distribution, direct or indirect, on account of any Stock or Stock Equivalents
of the Borrower or any of its Subsidiaries now or hereafter outstanding, except
a dividend payable solely in Stock or Stock Equivalents or a dividend or
distribution payable solely to the Borrower and/or one or more Subsidiary
Guarantors, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Stock or
Stock Equivalents of the Borrower or any of its Subsidiaries now or hereafter
outstanding other than one payable solely to the Borrower and/or one or more
Subsidiary Guarantors, and (c) any payment or prepayment of principal, premium
(if any), interest, fees (including fees to obtain any waiver or consent in
connection with any Security) or other charges on, or redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any
Indebtedness of the Borrower or any of its Subsidiaries or any other Loan Party,
other than any required redemptions, retirement, purchases or other payments, in
each case to the extent permitted to be made by the terms of such Indebtedness
after giving effect to any applicable subordination provisions, and any
refinancing of Indebtedness permitted by SECTION 8.1(E). Anything herein to the
contrary notwithstanding, the making of any investment in compliance with
SECTION 8.3 of this Agreement shall not constitute a Restricted Payment.
"REVOLVING CREDIT BORROWING" means Revolving Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"REVOLVING CREDIT COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and acquire
interests in other Revolving Credit Outstandings in the aggregate principal
amount outstanding not to exceed the amount set forth opposite such Lender's
name on SCHEDULE I under the caption "REVOLVING CREDIT COMMITMENT," as amended
to reflect each Assignment and Acceptance executed by such Lender and as such
amount may be reduced or modified pursuant to this Agreement.
"REVOLVING CREDIT NOTE" means a promissory note of the
Borrower payable to the order of any Lender in a principal amount equal to the
amount of such Lender's Revolving Credit Commitment evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving Loans
owing to such Lender.
"REVOLVING CREDIT OUTSTANDINGS" means, at any particular time,
the sum of (a) the principal amount of the Revolving Loans outstanding at such
time PLUS (b) the Letter of Credit Obligations outstanding at such time PLUS (c)
the principal amount of the Swing Loans outstanding at such time.
26
"REVOLVING CREDIT TERMINATION DATE" shall mean the earliest of
(a) the Scheduled Termination Date, (b) the date of termination of the Revolving
Credit Commitments pursuant to SECTION 2.5 and (c) the date on which the
Obligations become due and payable pursuant to SECTION 9.2.
"REVOLVING LOAN" has the meaning specified in SECTION 2.1.
"RIGHTS OFFERING" means the rights offering of up to 35% of
Stock in the Borrower, as more fully described in the Plan of Reorganization.
"SCHEDULED TERMINATION DATE" means January 27, 2003.
"SECONDARY SECURITIES" has the meaning specified in the Senior
Subordinated Note Indenture.
"SECURED OBLIGATIONS" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"SECURED PARTIES" means the Lenders, the Issuers, the
Administrative Agent and any other holder of any of the Obligations.
"SECURITY" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture,
dated as of January 28, 2000, between Norwest Bank Minnesota, National
Association, as Trustee, and the Borrower, pursuant to which the Senior
Subordinated Notes were issued.
"SENIOR SUBORDINATED NOTES" means the 11.25% Senior
Subordinated Notes due 2005 of the Borrower.
"SOLVENT" means, with respect to any Person, that the value of
the assets of such Person (both at fair value and present fair saleable value)
is, on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any letter of credit issued
pursuant to SECTION 2.4 which is not a Documentary Letter of Credit.
"STOCK" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other
27
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or non-voting.
"STOCK EQUIVALENTS" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company or other business entity of
which more than 50% of the outstanding Voting Stock is, at the time, directly or
indirectly, owned or controlled by such Person and/or one or more Subsidiaries
of such Person.
"SUBSIDIARY GUARANTOR" means each Subsidiary of the Borrower
party to the Guaranty.
"SWING LOAN" has the meaning specified in SECTION 2.3.
"SWING LOAN BORROWING" means a borrowing consisting of a Swing
Loan.
"SWING LOAN LENDER" means Citicorp and each other Lender who
becomes the Administrative Agent or who agrees with the approval of the
Administrative Agent and the Borrower to act as a Swing Loan Lender hereunder.
"SWING LOAN REQUEST" has the meaning specified in SECTION
2.3(B).
"TANGIBLE NET WORTH" of any Person means, at any date, the Net
Worth of such Person at such date, EXCLUDING, HOWEVER, from the determination of
the Total Assets of such Person at such date, (a) all goodwill, organizational
expenses, research and development expenses, trademarks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (b) all prepaid expenses, deferred charges or
unamortized debt discount and expense, (c) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement, defeasance
or prepayment of any Stock or Indebtedness, (d) any write-up in the book value
of any asset resulting from a revaluation thereof, other than, in the case of
the Borrower and its Subsidiaries, as a result of "fresh start" accounting
utilized by the Borrower in connection with the Reorganization, and (e) any
items not included in clauses (a) through (d) above which are treated as
intangibles in conformity with GAAP.
"TAX AFFILIATE" means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns.
"TAX RETURN" has the meaning specified in SECTION 5.3.
"TAXES" has the meaning specified in SECTION 2.16(A).
"TITLE IV PLAN" means a pension plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA to which the Borrower
any of its Subsidiaries or any ERISA Affiliate has any obligation or liability
(contingent or otherwise).
28
"TOTAL ASSETS" of any Person means, at any date, the total
assets of such Person and its Subsidiaries at such date determined on a
consolidated basis in conformity with GAAP MINUS (a) any minority interest in
non-wholly-owned Subsidiaries that would be reflected on a consolidated balance
sheet of such person and its Subsidiaries at such date prepared in conformity
with GAAP and (b) any Securities issued by such Person held as treasury
securities (to the extent reflected on such Person's balance sheet as assets).
"UNFUNDED PENSION LIABILITY" means, with respect to the
Borrower at any time, the sum of (a) the amount, if any, by which the present
value of all accrued benefits under each Title IV Plan (other than any Title IV
Plan subject to Section 4063 of ERISA) exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, as determined as of the most recent valuation date for such Title
IV Plan using the actuarial assumptions in effect under such Title IV Plan, and
(b) the aggregate amount of withdrawal liability that could be assessed under
Section 4063 with respect to each Title IV Plan subject to such Section,
separately calculated for each such Title IV Plan as of its most recent
valuation date and (c) for a period of five years following a transaction
reasonably likely to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by the Borrower, any of its
Subsidiaries or any ERISA Affiliate as a result of such transaction.
"UNUSED COMMITMENT FEE" has the meaning specified in SECTION
2.12(A).
"VOTING STOCK" means Stock of any Person having ordinary power
to vote in the election of members of the board of directors, managers, trustees
or other controlling Persons, of such Person (irrespective of whether, at the
time, Stock of any other class or classes of such entity shall have or might
have voting power by reason of the happening of any contingency).
"WARRANT AGREEMENT" means the agreement dated January 28, 2000
between the Borrower and ChaseMellon Shareholder Services, L.L.C., pursuant to
which the Warrants were issued.
"WARRANTS" mean the warrants to acquire up to 5% of the
Borrower, as more fully described in the Plan of Reorganization and the Warrant
Agreement.
"WELLSPRING" means collectively, Wellspring Capital Management
L.L.C., Co-Investment Partners, L.P., Ontario Teachers Pension Plan Board and
any Affiliate of the foregoing, (including, without limitation, PTB Acquisition
Company, LLC) and shall also mean the direct and indirect general partners,
shareholders or managing members of the foregoing or any Affiliate that is a
partnership or a limited liability company.
"WITHDRAWAL LIABILITY" means, with respect to the Borrower at
any time, the aggregate liability incurred (whether or not assessed) with
respect to all Multiemployer Plans pursuant to Section 4201 of ERISA or for
increases in contributions required to be made pursuant to Section 4243 of
ERISA.
"WORKING CAPITAL" means, for any Person at any date, the
amount by which the Consolidated Current Assets of such Person at such date
exceeds the Consolidated Current Liabilities of such Person at such date.
"YEAR 2000 COMPLIANT" means the ability of hardware, firmware
or software systems associated with information processing and delivery,
29
operations or services, operated by, provided to or otherwise necessary to the
business or operations of the Borrower or its Subsidiaries to recognize and
properly perform date-sensitive functions involving certain dates prior to, and
at any date after, December 31, 1999.
SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in
the computation of periods of time from a specified date to a later specified
date, the word "FROM" means "from and including" and the words "TO" and "UNTIL"
each mean "to but excluding" and the word "THROUGH" means "to and including."
SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the preparation
of the most recent Financial Statements referred to in SECTION 6.1 is hereafter
required or permitted by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successors thereto) and such change is adopted by the
Borrower with the agreement of its independent public accountants and results in
a change in any of the calculations required by ARTICLE V or ARTICLE VIII had
such accounting change not occurred, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Borrower shall be the same after such change as if such
change had not been made; PROVIDED, HOWEVER, that for purposes of this Agreement
only, no change in GAAP that would affect a calculation that measures compliance
with any covenant contained in ARTICLE V or ARTICLE VIII shall be given effect
until such provisions are amended to reflect such changes in GAAP.
SECTION 1.4. CERTAIN TERMS.
(a) The words "HEREIN," "HEREOF" and "HEREUNDER" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in, this Agreement.
(b) References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this ARTICLE I shall include
all appendices, exhibits and schedules thereto. Unless the prior written consent
of the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
30
(e) Except as expressly stated to the contrary, the term "INCLUDING"
when used in any Loan Document means "including without limitation" except when
used in the computation of time periods.
(f) The terms "LENDER," "ISSUER" and "ADMINISTRATIVE AGENT" include
their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to SECTION 10.6, references to Citicorp in SECTION 10.3 and to Citibank
in the definitions of Base Rate and Eurodollar Rate shall be deemed to refer to
the financial institution then acting as the Administrative Agent or one of its
Affiliates if it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1. THE REVOLVING CREDIT COMMITMENTS. On the terms
and subject to the conditions contained in this Agreement, each Lender severally
agrees to make loans (each a "REVOLVING LOAN") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Revolving
Credit Termination Date in an aggregate amount not to exceed at any time
outstanding for all such loans by such Lender such Lender's Revolving Credit
Commitment; PROVIDED, HOWEVER, that at no time shall any Lender be obligated to
make a Revolving Loan (i) in excess of such Lender's Ratable Portion of the
Available Credit and (ii) to the extent that the aggregate Revolving Credit
Outstandings, after giving effect to such Revolving Loan, would exceed the
Maximum Credit in effect at such time. Within the limits of each Lender's
Revolving Credit Commitment, amounts of Revolving Loans repaid may be reborrowed
under this SECTION 2.1.
SECTION 2.2. BORROWING PROCEDURES.
(a) Each Revolving Credit BorrowinG shall be made on notice
given by the Borrower to the Administrative Agent not later than 11:00 A.M. (New
York City time) (i) on the date of the proposed Borrowing, in the case of a
Borrowing of Base Rate Loans and (ii) three Business Days, in the case of a
Borrowing of Eurodollar Rate Loans, prior to the date of the proposed Revolving
Credit Borrowing. Each such notice shall be in substantially the form of EXHIBIT
C (a "NOTICE OF BORROWING"), specifying (A) the date of such proposed Revolving
Credit Borrowing, (B) the aggregate amount of such proposed Revolving Credit
Borrowing, (C) whether any portion of the proposed Revolving Credit Borrowing
will be of Base Rate Loans or Eurodollar Rate Loans and (D) the initial Interest
Period or Periods for any such Eurodollar Rate Loans. The Revolving Loans shall
be made as Base Rate Loans unless (subject to SECTION 2.14) the Notice of
Borrowing specifies that all or a portion thereof shall be Eurodollar Rate
Loans. Each Revolving Credit Borrowing shall be in an aggregate amount of not
less than $2,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) The Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to SECTION 2.14(A). Each Lender
shall, before 11:00 A.M. (New York City time) on the date of the proposed
Borrowing or, in the case of Base Rate Loans in respect of which the
Administrative
31
Agent has
received the Notice of Borrowing on the date of the proposed Borrowing, 1:00
P.M., make available to the Administrative Agent at its address referred to in
SECTION 11.8, in immediately available funds, such Lender's Ratable Portion of
such proposed Borrowing. After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in SECTIONS 3.1 and
3.2, the Administrative Agent will make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this SECTION 2.2 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for the
first Business Day and thereafter at the interest rate applicable at the time to
the Loans comprising such Borrowing. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement. If the Borrower shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation it may have hereunder to the Borrower.
(d) The failure of any Lender to make the Loan or any payment required
by it on the date specified (a "NON-FUNDING LENDER"), including any payment in
respect of its participation in Swing Loans and Letter of Credit Obligations,
shall not relieve any other Lender of its obligations to make such Loan or
payment on such date but no such other Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan or payment required under this
Agreement.
SECTION 2.3. SWING LOANS.
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans (each a
"SWING LOAN") otherwise available to the Borrower under the Facility from time
to time on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date in an aggregate amount at any time outstanding
at any time not to exceed the lesser of $10,000,000 and the Swing Loan Lender's
Ratable Portion of the Available Credit; PROVIDED, HOWEVER, that the Swing Loan
Lender shall not make any Swing Loan to the extent that, after giving effect to
such Swing Loan, the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit. The Swing Loan Lender shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Administrative Agent. Each
Swing Loan shall be a Base Rate Loan and must be repaid in full within seven
days of its making or, if sooner, upon any Revolving Credit Borrowing hereunder
and shall in any event mature no later than the Revolving Credit Termination
Date. Within the
32
limits
set forth in the first sentence of this SECTION 2.3(A), amounts of Swing Loans
repaid may be reborrowed under this SECTION 2.3(A).
(b) In order to request a Swing Loan, the Borrower shall telecopy
to the Administrative Agent a duly completed request setting forth the date, the
requested amount and date of the Swing Loan (a "SWING LOAN REQUEST"), to be
received by the Administrative Agent not later than 1:00 p.m. (New York City
time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request. The
Swing Loan Lender shall not make any Swing Loan in the period commencing on the
first Business Day after it receives written notice from any Lender that one or
more of the conditions precedent contained in SECTION 3.2 shall not on such date
be satisfied, and ending when such conditions are satisfied. The Swing Loan
Lender shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in SECTION 3.2 hereof have been
satisfied in connection with the making of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which may be by telecopy) weekly, by no later than 10:00 a.m. (New York
City time) on the first Business Day of each week, of the aggregate principal
amount of its Swing Loans then outstanding.
(d) The Swing Loan Lender may demand at any time that each Lender pay
to the Administrative Agent, for the account of the Swing Loan Lender, in the
manner provided in subsection (e) below, such Lender's Ratable Portion of all or
a portion of the outstanding Swing Loans, which demand shall be made through the
Administrative Agent, shall be in writing and shall specify the outstanding
principal amount of Swing Loans demanded to be paid.
(e) The Administrative Agent shall forward each notice referred to in
CLAUSE (C) above and each demand referred to in CLAUSE (D) above to each Lender
on the day such notice or such demand is received by the Administrative Agent
(except that any such notice or demand received by the Administrative Agent
after 2:00 p.m. (New York City time) on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be
forwarded to the Lenders by the Administrative Agent until the next succeeding
Business Day), together with a statement prepared by the Administrative Agent
specifying the amount of each Lender's Ratable Portion of the aggregate
principal amount of the Swing Loans stated to be outstanding in such notice or
demanded to be paid pursuant to such demand, and, notwithstanding whether or not
the conditions precedent set forth in SECTION 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive), each Lender
shall, before 11:00 a.m. (New York City time) on the Business Day next
succeeding the date of such Lender's receipt of such written statement, make
available to the Administrative Agent, in immediately available funds, for the
account of the Swing Loan Lender, the amount specified in such statement. Upon
such payment by a Lender, such Lender shall, except as provided in CLAUSE (F)
below, be deemed to have made a Revolving Loan to the Borrower. The
Administrative Agent shall use such funds to repay the Swing Loans to the Swing
Loan Lender. To the extent that any Lender fails to make such payment available
to the Administrative Agent for the account of the Swing Loan Lender, the
Borrower shall repay such Swing Loan on demand.
33
(f) Upon the occurrence of a Default under SECTION 9.1(F), each
Lender shall acquire, without recourse or warranty, an undivided participation
in each Swing Loan otherwise required to be repaid by such Lender pursuant to
CLAUSE (E) above, which participation shall be in a principal amount equal to
such Lender's Ratable Portion of such Swing Loan, by paying to the Swing Loan
Lender on the date on which such Lender would otherwise have been required to
make a payment in respect of such Swing Loan pursuant to CLAUSE (E) above, in
immediately available funds, an amount equal to such Lender's Ratable Portion of
such Swing Loan. If such amount is not in fact made available by such Lender to
the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled to
recover such amount on demand from such Lender together with interest accrued
from such date at the Federal Funds Rate for the first Business Day after such
payment was due and thereafter at the rate of interest then applicable to Base
Rate Loans.
(g) From and after the date on which any Lender is deemed to have
made a Revolving Credit Loan pursuant to CLAUSE (E) above with respect to any
Swing Loan or purchases an undivided participation interest in a Swing Loan
pursuant to CLAUSE (F) above, a Swing Loan Lender shall promptly distribute to
such Lender such Lender's Ratable Portion of all payments of principal of and
interest received by the Swing Loan Lender on account of such Swing Loan other
than those received from a Lender pursuant to CLAUSE (E) or (F) above.
SECTION 2.4. LETTERS OF CREDIT.
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to issue one or more Letters of Credit at the
request of the Borrower for the account of the Borrower from time to time during
the period commencing on the Closing Date and ending on the earlier of the
Revolving Credit Termination Date and 30 days prior to the Scheduled Termination
Date; PROVIDED, HOWEVER, that no Issuer shall be under any obligation to issue
any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin
or restrain such Issuer from issuing such Letter of Credit or
any Requirement of Law applicable to such Issuer or any
request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over such
Issuer shall prohibit, or request that such Issuer refrain
from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such
Issuer with respect to such Letter of Credit any restriction
or reserve or capital requirement (for which such Issuer is
not otherwise compensated) not in effect on the date of this
Agreement or result in any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuer as
of the date of this Agreement and which such Issuer in good
▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received written notice
from the Administrative Agent, any Lender or the Borrower, on
or prior to the requested date of issuance of such Letter of
Credit, that one or more of the applicable conditions
contained in SECTIONS 3.1 and 3.2 is not then satisfied;
(iii) after giving effect to the issuance of such Letter
of Credit, the aggregate Revolving Credit Outstandings would
exceed the Maximum Credit at such time;
34
(iv) after giving effect to the issuance of such Letter
of Credit, the sum of (i) the Letter of Credit Undrawn Amounts
at such time and (ii) the Reimbursement Obligations at such
time exceeds $15,000,000 (the "LETTER OF CREDIT SUBLIMIT"); or
(v) any fees due in connection with a requested
issuance have not been paid;
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to issue any Letter of Credit. No Letter of Credit may be
issued without the consent of the Administrative Agent.
(b) In no event shall the expiration date of any Letter of Credit (i)
be more than one year after the date of issuance thereof, or (ii) be less than
thirty days prior to the Scheduled Termination Date; PROVIDED, HOWEVER, that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the expiry
date referred to in CLAUSE (II) above).
(c) In connection with the issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice, in substantially the form of EXHIBIT D
(or in such other written or electronic form as is acceptable to the Issuer) (a
"LETTER OF CREDIT REQUEST"), of the requested issuance of such Letter of Credit.
Such notice shall be irrevocable and shall specify the Issuer of such Letter of
Credit, the stated amount of the Letter of Credit requested, which stated amount
shall not be less than $100,000, the date of issuance of such requested Letter
of Credit (which day shall be a Business Day), the date on which such Letter of
Credit is to expire (which date shall be a Business Day), and the Person for
whose benefit the requested Letter of Credit is to be issued. Such notice, to be
effective, must be received by the relevant Issuer and the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the requested issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in this
SECTION 2.4, the relevant Issuer shall, on the requested date, issue a Letter of
Credit on behalf of the Borrower in accordance with such Issuer's usual and
customary business practices. No Issuer shall issue any Letter of Credit in the
period commencing on the first Business Day after it receives written notice
from any Lender that one or more of the conditions precedent contained in
SECTION 3.2 shall not on such date be satisfied, and ending when such conditions
are satisfied. The relevant Issuer shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in SECTION 3.2
have been satisfied in connection with the issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the issuance of each
Letter of Credit by such Issuer, and as a condition of such issuance and of the
participation of each Lender in the Letter of Credit Obligations arising with
respect thereto, the Borrower shall have delivered to such Issuer a letter of
credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "LETTER OF CREDIT
REIMBURSEMENT AGREEMENT"), signed by the Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
35
(f) Each Issuer shall:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing,
which may be by telecopier) of the issuance or renewal of a
Letter of Credit issued by it, of all drawings under a Letter
of Credit issued by it and the payment (or the failure to pay
when due) by the Borrower of any Reimbursement Obligation when
due (which notice the Administrative Agent shall promptly
transmit by telecopy or similar transmission to each Lender).
(ii) upon the request of any Lender, furnish to such
Lender copies of any Letter of Credit Reimbursement Agreement
to which such Issuer is a party and such other documentation
as may reasonably be requested by such Lender; and
(iii) no later than the tenth (10th) Business Day
following the last day of each Fiscal Month, provide to the
Administrative Agent (and the Administrative Agent shall
provide a copy to each Lender requesting the same) and the
Borrower separate schedules for Documentary and Standby
Letters of Credit issued by it, in form and substance
reasonably satisfactory to the Administrative Agent, setting
forth the aggregate Letter of Credit Obligations outstanding
at the end of each month and any information requested by the
Borrower or the Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion, in such Letter of Credit and the
obligations of the Borrower with respect thereto (including all Letter of Credit
Obligations with respect thereto) and any security therefor and guaranty
pertaining thereto.
(h) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit issued for its account when such amounts are due and payable,
irrespective of any claim, set-off, defense or other right which the Borrower
may have at any time against such Issuer or any other Person. In the event that
any Issuer makes any payment under any Letter of Credit and the Borrower shall
not have repaid such amount to such Issuer pursuant to this CLAUSE (H) or such
payment is rescinded or set aside for any reason, such Reimbursement Obligation
shall be payable on demand with interest thereon computed from the date on which
such Reimbursement Obligation arose to the date of repayment in full at the rate
of interest applicable to past due Revolving Credit Loans bearing interest at a
rate based on the Base Rate during such period, and such Issuer shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such payment in Dollars and in immediately available funds.
If the Administrative Agent so notifies such Lender prior to 11:00 A.M. (New
York City time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. Upon
such payment by a Lender, such Lender shall, except during the continuance of a
Default or Event of
36
Default under SECTION 9.1(F) and notwithstanding whether or not the conditions
precedent set forth in SECTION 3.2 shall have been satisfied (which conditions
precedent the Lenders hereby irrevocably waive) be deemed to have made a
Revolving Loan to the Borrower in the principal amount of such payment. Whenever
any Issuer receives from the Borrower a payment of a Reimbursement Obligation as
to which the Administrative Agent has received for the account of such Issuer
any payment from a Lender pursuant to this CLAUSE (H), such Issuer shall pay to
the Administrative Agent and the Administrative Agent shall promptly pay to each
Lender, in immediately available funds, an amount equal to such Lender's Ratable
Portion of the amount of such payment adjusted, if necessary, to reflect the
respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
(i) The Borrower's obligation to pay each Reimbursement Obligation
and the obligations of the Lenders to make payments to the Administrative Agent
for the account of the Issuers with respect to Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, including the occurrence of any Default or Event of Default, and
irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or
provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of
Credit or any Loan Document;
(iii) the existence of any claim, set off, defense or
other right that the Borrower, any other party guaranteeing,
or otherwise obligated with, the Borrower, any Subsidiary or
other Affiliate thereof or any other Person may at any time
have against the beneficiary under any Letter of Credit,
Issuer, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement, any other
Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit
against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any
kind of the Issuer, the Lenders, the Administrative Agent or
any other Person or any other event or circumstance
whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this Section, constitute
a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with
37
the terms thereof, the Issuer may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
(j) If and to the extent such Lender shall not have so made its
Ratable Portion of the amount of the payment required by CLAUSE (I) above
available to the Administrative Agent for the account of such Issuer, such
Lender agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand such amount together with interest thereon, for the first
Business Day after payment was first due at the Federal Funds Rate, and
thereafter until such amount is repaid to the Administrative Agent for the
account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Facility. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
SECTION 2.5. REDUCTION AND TERMINATION OF THE REVOLVING CREDIT
COMMITMENTS.
(a) The Borrower may, upon at least three Business Days' prior notice
to the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Revolving Credit Commitments of the Lenders;
PROVIDED, HOWEVER, that each partial reduction shall be in the aggregate amount
of not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) The then current Revolving Credit Commitments shall be reduced on
each date on which a prepayment of Revolving Loans or Swing Loans is made
pursuant to SECTIONS 2.9(A) or 2.9(E)(I) or would be required to be made had the
outstanding Revolving Loans and Swing Loans equaled the Revolving Credit
Commitments then in effect, in each case in the amount of such prepayment (or
deemed prepayment) (and the Revolving Credit Commitment of each Lender shall be
reduced by its Ratable Portion of such amount).
38
SECTION 2.6. REPAYMENT OF LOANS. The Borrower shall repay the
entire unpaid principal amount of the Revolving Loans and all other Obligations
on the Scheduled Termination Date.
SECTION 2.7. EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) The Administrative Agent shall maintain accounts in accordance
with its usual practice in which it will record (i) the amount of each Loan made
and, if a Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable by the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof, if
applicable.
(c) The entries made in the accounts maintained pursuant to CLAUSES
(A) and (B) of this SECTION 2.7 shall, to the extent permitted by applicable
law, be PRIMA FACIE evidence of the existence and amounts of the obligations
recorded therein; PROVIDED, HOWEVER, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(d) Notwithstanding any other provision of the Agreement, in the event
that any Lender requests that the Borrower execute and deliver a promissory note
or notes payable to such Lender in order to evidence the Indebtedness owing to
such Lender by the Borrower hereunder, the Borrower will promptly execute and
deliver a Revolving Credit Note or Revolving Credit Notes to such Lender
evidencing any Revolving Credit Loans of such Lender, substantially in the form
of EXHIBIT B, and the interests evidenced by such note or notes shall at all
times (including after assignment of all or part of such interests) be evidenced
by one or more Revolving Credit Notes payable to the order of the payee named
therein.
SECTION 2.8. OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least three Business Days' prior notice
to the Administrative Agent, stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of the
Revolving Loans in whole or in part; PROVIDED, HOWEVER, that if any prepayment
of any Eurodollar Rate Loan is made by the Borrower other than on the last day
of an Interest Period for such Loan, the Borrower shall also pay any amounts
owing pursuant to SECTION 2.14(E); and, PROVIDED, FURTHER, that each partial
prepayment shall be in an aggregate principal amount not less than $2,000,000 or
integral multiples of $1,000,000 in excess thereof. Upon the giving of such
notice of prepayment, the principal amount of Revolving Credit Loans specified
to be prepaid shall become due and payable on the date specified for such
prepayment.
(b) The Borrower shall have no right to prepay the principal amount
of any Revolving Loan other than as provided in this SECTION 2.8.
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SECTION 2.9. MANDATORY PREPAYMENTS.
(a) Upon receipt by the Borrower or any of its Subsidiaries of Net
Cash Proceeds arising (i) from an Asset Sale or a Debt Issuance, the Borrower
shall immediately prepay the Loans in an amount equal to 100% of such Net Cash
Proceeds, and (ii) from an Equity Issuance, the Borrower shall immediately
prepay the Loans in an amount equal to 50% of such Net Cash Proceeds. Any such
mandatory prepayment shall be applied in accordance with SECTION 2.9(B) below.
(b) Any prepayments made by the Borrower required to be applied in
accordance with this SECTION 2.9(B) shall be applied as follows: FIRST, to repay
the outstanding principal balance of the Swing Loans until such Swing Loans
shall have been repaid in full; SECOND, to repay the outstanding principal
balance of the Revolving Loans until such Revolving Loans shall have been paid
in full; and THEN, to provide cash collateral for any Letter of Credit
Obligations in the manner set forth in SECTION 9.3 until all such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
therein. All repayments of Revolving Loans and Swing Loans required to be
applied in accordance with this SECTION 2.9(B) or SECTION 2.9(E)(I) shall result
in a permanent reduction of the Revolving Credit Commitments to the extent
provided therein.
(c) If at any time, the aggregate principal amount of Revolving
Credit Outstandings exceed the Maximum Credit at such time, the Borrower shall
forthwith prepay the Swing Loans first and then the Revolving Loans then
outstanding in an amount equal to such excess. If any such excess remains after
repayment in full of the aggregate outstanding Swing Loans and Revolving Loans,
the Borrower shall provide cash collateral for the Letter of Credit Obligations
in the manner set forth in SECTION 9.3 to the extent required to eliminate such
excess.
(d) Upon the occurrence of a Cash Sweep Event, the Borrower agrees
that all available funds in the Concentration Account shall be applied on a
daily basis FIRST to repay the outstanding principal amount of the Swing Loans
until such Swing Loans have been repaid in full; SECOND to repay the outstanding
principal balance of the Revolving Loans until such Revolving Loans shall have
been repaid in full; and THIRD to any other Obligation then due and payable.
(e) (i) Except as provided in CLAUSE (II) below, promptly, and in
any event within 10 days of receipt by the Administrative Agent, the Borrower or
any Subsidiary Guarantor of any Net Cash Proceeds in excess of $500,000 (for
each occurrence) from payments of insurance on account of the loss or damage to
any assets or property, or payments of compensation for any such assets or
property taken by condemnation or eminent domain, the applicable party receiving
such Net Cash Proceeds shall notify the other parties of such receipt in
writing, and not later than 30 days following such receipt of notice, there
shall become due and payable a prepayment of the Loans in an amount equal to
100% of such Net Cash Proceeds.
(ii) The Borrower may elect, by written notice delivered
to the Administrative Agent no later than the date on which prepayment would
otherwise be required under CLAUSE (I) above, to apply all or a portion of such
Net Cash Proceeds to the replacement or repair of such assets or property;
PROVIDED, HOWEVER, that if within 150 days of such election, such replacement or
repair has not commenced, or is abandoned or otherwise discontinued or not
diligently pursued, 100% of the Net Cash Proceeds shall be immediately applied
to the Loans in accordance with SECTION 2.9(B). If the Borrower makes an
election under this CLAUSE (II), then the Borrower shall apply such Net Cash
Proceeds to the repayment of the Loans (but not in
40
permanent reduction of the Revolving Credit Commitments) and any remaining
proceeds shall be maintained in the Cash Collateral Account and may not be
withdrawn by the Borrower other than for the replacement or repair specified in
the Borrower's election notice. The Administrative Agent shall be entitled to
require proof that the proceeds of any such withdrawal are being applied for the
purposes specified in the Borrower's election notice.
SECTION 2.10. INTEREST.
(a) RATE OF INTEREST. All Loans and the outstanding amount of
all other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in SECTION
2.10(C), as follows:
(i) if a Base Rate Loan or such other Obligation, at a
rate per annum equal to the sum of (A) the Base Rate as in
effect from time to time, PLUS (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the
applicable Interest Period, PLUS (B) the Applicable Margin in
effect from time to time during such Eurodollar Interest
Period.
(b) INTEREST PAYMENTS. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on the last day of each calendar month,
commencing on the first such day following the making of such Base Rate Loan,
and (B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Base Rate Loan; (ii) interest accrued on Swing Loans shall be
payable in arrears on the first Business Day of the immediately succeeding
calendar month; (iii) interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on the last day of each Interest Period applicable to
such Loan and if such Interest Period has a duration of more than three months,
on each day during such Interest Period which occurs every three months from the
first day of such Interest Period, (B) upon the payment or prepayment thereof in
full or in part, and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan; and (iv) interest
accrued on the amount of all other Obligations shall be payable on demand from
and after the time such Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) DEFAULT INTEREST. Notwithstanding the rates of interest specified
in SECTION 2.10(A) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations shall bear interest at a rate which is two percent per
annum in excess of the rate of interest applicable to such Obligations from time
to time.
SECTION 2.11. CONVERSION/CONTINUATION OPTION.
(a) The Borrower may elect (i) at any time to convert Base Rate Loans
(other than Swing Loans) or any portion thereof to Eurodollar Rate Loans, or
(ii) at the end of any applicable Interest Period, to convert Eurodollar Rate
Loans or any portion thereof into Base Rate Loans or to continue such Eurodollar
Rate Loans or any portion thereof for an additional Interest
41
Period; PROVIDED, HOWEVER, that the aggregate amount of the Eurodollar Loans for
each Interest Period must be in the amount of $2,000,000 or an integral multiple
of $1,000,000 in excess thereof. Each conversion or continuation shall be
allocated among the Loans of each Lender in accordance with its Ratable Portion.
Each such election shall be in substantially the form of EXHIBIT F hereto (a
"NOTICE OF CONVERSION OR CONTINUATION") and shall be made by giving the
Administrative Agent at least three Business Days' prior written notice
specifying (A) the amount and type of Loan being converted or continued, (B) in
the case of a conversion to or a continuation of Eurodollar Rate Loans, the
applicable Interest Period, and (C) in the case of a conversion, the date of
conversion (which date shall be a Business Day and, if a conversion from
Eurodollar Rate Loans, shall also be the last day of the applicable Interest
Period).
(b) The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein. Notwithstanding the foregoing, no conversion in whole or in part of
Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in
part of Eurodollar Rate Loans upon the expiration of any applicable Interest
Period, shall be permitted at any time at which (i) a Default or an Event of
Default shall have occurred and be continuing or (ii) the continuation of, or
conversion into, would violate any of the provisions of SECTION 2.14. If, within
the time period required under the terms of this SECTION 2.11, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans, then,
upon the expiration of the applicable Interest Period, such Loans will be
automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
SECTION 2.12. FEES.
(a) UNUSED COMMITMENT FEE. The Borrower agrees to pay to each Lender
a commitment fee on the average amount by which the Revolving Credit Commitment
of such Lender exceeds such Lender's Ratable Portion of the Revolving Credit
Outstandings (the "UNUSED COMMITMENT FEE") from the date hereof until the
Revolving Credit Termination Date at the Applicable Unused Commitment Fee Rate,
payable in arrears (i) on the last day of each calendar month, commencing on the
first such day following the Closing Date and (ii) on the Revolving Credit
Termination Date.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of
each Issuer of a Letter of Credit, with respect to each Letter
of Credit issued by such Issuer, an issuance fee equal to
0.25% per annum of the maximum amount available from time to
time to be drawn under such Letter of Credit, payable in
arrears (A) on the last day of each calendar month, commencing
on the first such day following the issuance of such Letter of
Credit and (B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit
of the Lenders, with respect to each Letter of Credit, a fee
accruing at a rate per annum equal to the Applicable Margin
for Revolving Loans that are Eurodollar Rate Loans of the
maximum amount available from time to time to be drawn under
such Letter of Credit, payable in arrears (A) on the last day
of each calendar
42
month, commencing on the first such day following the issuance
of such Letter of Credit and (B) on the Revolving Credit
Termination Date; PROVIDED, HOWEVER, that during the
continuance of an Event of Default, such fee shall be
increased by two percent per annum and shall be payable on
demand; and
(iii) to the Issuer of any Letter of Credit, with respect
to the issuance, amendment or transfer of each Letter of
Credit and each drawing made thereunder, documentary and
processing charges in accordance with such Issuer's standard
schedule for such charges in effect at the time of issuance,
amendment, transfer or drawing, as the case may be.
(c) ADDITIONAL FEES. The Borrower has agreed to pay to the
Administrative Agent and the Arranger additional fees, the amount and dates of
payment of which are embodied in the Fee Letter.
SECTION 2.13. PAYMENTS AND COMPUTATIONS; PROTECTIVE ADVANCES.
(a) The Borrower shall make each payment hereunder (including fees and
expenses) not later than 11:00 A.M. (New York City time) on the day when due, in
Dollars, to the Administrative Agent at its address referred to in SECTION 11.8
in immediately available funds without set-off or counterclaim. The
Administrative Agent will promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal or interest or
fees to the Lenders, in accordance with the application of payments set forth in
CLAUSES (E) and (F) of this SECTION 2.13, as applicable, for the account of
their respective Applicable Lending Offices; PROVIDED, HOWEVER, that amounts
payable pursuant to SECTION 2.14(C), 2.14(E), 2.15 or 2.16 shall be paid only to
the affected Lender or Lenders and amounts payable with respect to Swing Loans
shall be paid only to the Swing Loan Lender. Payments received by the
Administrative Agent after 11:00 A.M. (New York City time) shall be deemed to be
received on the next Business Day.
(b) All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of (i) 365 days (in the case of Base
Rate Loans and fees) and (y) 360 days (in the case of Eurodollar Rate Loans),
and in each case, for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest and fees
are payable. Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; PROVIDED,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Rate Loan to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day. All repayments of any
Revolving Loans shall be applied first to repay such Loans outstanding as Base
Rate Loans and then to repay such Loans outstanding as Eurodollar Rate Loans
with those Eurodollar Rate Loans which have earlier expiring Eurodollar Interest
Periods being repaid prior to those which have later expiring Eurodollar
Interest Periods.
(d) Unless the Administrative Agent shall have received notice from
the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the
43
Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrower shall not have made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon at the Federal Funds Rate, for the first Business
Day, and, thereafter, at the rate applicable to Base Rate Loans, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent.
(e) Subject to the provisions of CLAUSE (F) of this SECTION 2.13 and
(except as otherwise provided in SECTION 2.9), all payments and any other
amounts received by the Administrative Agent from or for the benefit of the
Borrower shall be applied FIRST, to pay principal of and interest on any portion
of the Loans which the Administrative Agent may have advanced pursuant to the
express provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower; SECOND, to pay all other Obligations then due and payable; and THIRD,
as the Borrower so designates. Payments in respect of Swing Loans received by
the Administrative Agent shall be distributed to the Swing Loan Lender; payments
in respect of Revolving Loans received by the Administrative Agent shall be
distributed to each Lender in accordance with such Lender's Ratable Portion; and
all payments of fees and all other payments in respect of any other Obligation
shall be allocated among such of the Lenders and Issuers as are entitled
thereto, and, if to the Lenders, in proportion to their respective Ratable
Portions.
(f) After the occurrence and during the continuance of an Event of
Default, the Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations and any
proceeds of Collateral, and agrees that the Administrative Agent may, and shall
upon either (A) the written direction of the Requisite Lenders or (B) the
acceleration of the Obligations pursuant to SECTION 9.1, apply all payments in
respect of any Obligations and all proceeds of Collateral in the following
order:
(i) FIRST, to pay interest on and then principal of any
portion of the Revolving Loans which the Administrative Agent
may have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by such
Lender or the Borrower;
(ii) SECOND, to pay interest on and then principal of
any Swing Loan;
(iii) THIRD, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative
Agent;
(iv) FOURTH, to pay Obligations in respect of any
expense reimbursements or indemnities then due to the Lenders
and the Issuers;
(v) FIFTH, to pay Obligations in respect of any fees
then due to the Administrative Agent, the Lenders and the
Issuers;
(vi) SIXTH, to pay interest then due and payable in
respect of the Loans and Reimbursement Obligations;
44
(vii) SEVENTH, to pay or prepay principal payments on the
Loans and Reimbursement Obligations and to provide cash
collateral for outstanding Letter of Credit Undrawn Amounts in
the manner described in SECTION 9.3, ratably to the aggregate
principal amount of such Loans, Reimbursement Obligations and
Letter of Credit Undrawn Amounts, and Obligations owing with
respect to Hedging Contracts; and
(viii) EIGHTH, to the ratable payment of all other
Obligations;
PROVIDED, HOWEVER, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses FIRST through EIGHTH, the available funds being applied with
respect to any such Obligation (unless otherwise specified in such clause) shall
be allocated to the payment of such Obligations ratably, based on the proportion
of the Administrative Agent's and each Lender's or Issuer's interest in the
aggregate outstanding Obligations described in such clauses. The order of
priority set forth in clauses FIRST through EIGHTH of this SECTION 2.13(F) may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party that is not a Lender or Issuing Bank, or any other
Person. The order of priority set forth in clauses FIRST through FIFTH of this
SECTION 2.13(F) may be changed only with the prior written consent of the
Administrative Agent in addition to the Requisite Lenders.
(g) All payments of principal on the Swing Loans, Reimbursement
Obligations, interest, fees, expenses and other sums due and payable in respect
of the Revolving Loans and all expenses, disbursements and advances incurred by
the Administrative Agent pursuant to the Loan Documents after the occurrence and
during the continuance of an Event of Default which the Administrative Agent, in
its sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof or to enhance the likelihood or maximize the
amount of repayment of the Obligations may, at the option of the Administrative
Agent, be paid from the proceeds of Swing Loans or Revolving Loans. The Borrower
hereby authorizes the Swing Loan Lender to make Swing Loans pursuant to SECTION
2.3(A), and the Lenders to make Revolving Loans pursuant to SECTION 2.2(A), from
time to time in such Swing Loan Lender's, or such Lender's discretion, which are
in the amounts of any and all principal payable with respect to the Swing Loans
and interest, fees, expenses and other sums payable in respect of the Revolving
Loans, and further authorizes the Administrative Agent to give the Lenders
notice of any Borrowing with respect to such Swing Loans and Revolving Loans and
to distribute the proceeds of such Swing Loans and Revolving Loans to pay such
amounts. The Borrower agrees that all such Swing Loans and Revolving Loans so
made shall be deemed to have been requested by it (irrespective of the
satisfaction of the conditions in SECTION 3.2, which conditions the Lenders
irrevocably waive) and directs that all proceeds thereof shall be used to pay
such amounts.
SECTION 2.14. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
(a) DETERMINATION OF INTEREST RATE. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"EURODOLLAR RATE." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrower.
(b) INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. In the event
that: (i) the Administrative Agent determines that adequate and fair means do
not exist for ascertaining
45
the applicable interest rates by reference to which the Eurodollar Rate then
being determined is to be fixed; or (ii) the Requisite Lenders notify the
Administrative Agent that the Eurodollar Rate for any Interest Period will not
adequately reflect the cost to the Lenders of making or maintaining such Loans
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon each Eurodollar Loan will automatically, on
the last day of the current Interest Period for such Loan, convert into a Base
Rate Loan and the obligations of the Lenders to make Eurodollar Rate Loans or to
convert Base Rate Loans into Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that the Requisite Lenders have
determined that the circumstances causing such suspension no longer exist.
(c) INCREASED COSTS. If at any time any Lender shall determine
that the introduction of or any change in or in the interpretation of any law,
treaty or governmental rule, regulation or order (other than any change by way
of imposition or increase of reserve requirements included in determining the
Eurodollar Rate Reserve Percentage) or the compliance by such Lender with any
guideline, request or directive from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any Eurodollar Rate Loans, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Administrative Agent by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(d) ILLEGALITY. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Lender or
its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to
fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand
therefor by such Lender to the Borrower through the Administrative Agent, (i)
the obligation of such Lender to make or to continue Eurodollar Rate Loans and
to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, and
each such Lender shall make a Base Rate Loan as part of any requested Borrowing
of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If at any time after a Lender gives notice under this SECTION 2.14(D)
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender. The Borrower's right to request, and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.
(e) BREAKAGE COSTS. In addition to all amounts required to be paid
by the Borrower pursuant to SECTION 2.10, the Borrower shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to the Borrower but excluding any loss of the
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on
46
a date specified therefor in a Notice of Borrowing or a Notice of Conversion or
Continuation given by a Borrower or in a telephonic request by it for borrowing
or conversion or continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to SECTION 2.11, (ii) if for any reason
any Eurodollar Rate Loan is prepaid (including mandatorily pursuant to SECTION
2.9) on a date which is not the last day of the applicable Interest Period,
(iii) as a consequence of a required conversion of a Eurodollar Rate Loan to a
Base Rate Loan as a result of any of the events indicated in SECTION 2.14(B), or
(iv) as a consequence of any failure by a Borrower to repay Eurodollar Rate
Loans when required by the terms hereof. The Lender making demand for such
compensation shall deliver to the Borrower concurrently with such demand a
written statement as to such losses, expenses and liabilities (which statement
shall show in reasonable detail the factual basis for and the computation of
such losses, expenses and liabilities), and this statement shall be conclusive
as to the amount of compensation due to that Lender, absent manifest error.
SECTION 2.15. CAPITAL ADEQUACY. If at any time any Lender
determines that (a) the adoption of or any change in or in the interpretation of
any law, treaty or governmental rule, regulation or order after the date of this
Agreement regarding capital adequacy, (b) compliance with any such law, treaty,
rule, regulation, or order, or (c) compliance with any guideline or request or
directive from any central bank or other Governmental Authority (whether or not
having the force of law) shall have the effect of reducing the rate of return on
such Lender's (or any corporation controlling such Lender's) capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change, compliance or interpretation, then, upon
demand from time to time by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.
SECTION 2.16. TAXES.
(a) Any and all payments by the Borrower under each Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) in the case of each Lender and
the Administrative Agent (A) franchise taxes imposed on it, by the jurisdiction
(or any political subdivision thereof) under the laws of which such Lender or
the Administrative Agent (as the case may be) is organized and taxes measured by
its net income and (B) any United States withholding taxes payable with respect
to payments under the Loan Documents under laws (including any statute, treaty
or regulation) in effect on the Closing Date (or, in the case of an Eligible
Assignee, the date of the Assignment and Acceptance) applicable to such Lender
or the Administrative Agent, as the case may be, but not excluding any United
States withholding payable as a result of any change in such laws occurring
after the Closing Date (or the date of such Assignment and Acceptance) and (ii)
in the case of each Lender, franchise taxes imposed on it, by the jurisdiction
in which such Lender's Applicable Lending Office is located and taxes measured
by its net income (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "TAXES").
If any Taxes shall be required by law to be deducted from or in respect of any
sum payable under any Loan Document to any Lender or the Administrative Agent
(i) the sum payable shall be increased as
47
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this SECTION 2.16) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) the Borrower shall deliver to the
Administrative Agent evidence of such payment.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document
(collectively, "OTHER TAXES").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this SECTION 2.16)
paid by such Lender or the Administrative Agent (as the case may be) and any
liability (including for penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Administrative Agent, at its address
referred to in SECTION 11.8, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 2.16 shall survive the payment in full of the Obligations.
(f) Prior to the Closing Date in the case of each Non-U.S. Lender
that is a signatory hereto, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender in the case of each other Non-U.S. Lender
and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Non-U.S. Lender that is entitled at such time to an
exemption from United States withholding tax, or that is subject to such tax at
a reduced rate under an applicable tax treaty, shall provide the Administrative
Agent and the Borrower with two completed copies of either IRS Form 4224 or Form
1001, or in the case of a Non-U.S. Lender claiming exemption under Section
871(h) or 881(c) of the Code with respect to "portfolio interest," a Form W-8 or
Form W-9, or other applicable form, certificate or document prescribed by the
IRS certifying as to such Non-U.S. Lender's entitlement to such exemption from
United States withholding tax or reduced rate with respect to all payments to be
made to such Non-U.S. Lender under the Loan Documents. Unless the Borrower and
the Administrative Agent have received forms or other documents satisfactory to
them indicating that payments under any Loan Document to or for a Non-U.S.
Lender are not subject to United States withholding tax or are subject to such
tax at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate.
(g) Any Lender claiming any additional amounts payable pursuant to
this SECTION 2.16 shall use its reasonable efforts (consistent with its internal
policy and legal and
48
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which would be payable or may thereafter
accrue and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.17. SUBSTITUTION OF LENDERS. In the event that (a)
(i) any Lender makes a claim under SECTION 2.14 (C) or SECTION 2.15, or (ii) it
becomes illegal for any Lender to continue to fund or make any Eurodollar Rate
Loan and such Lender notifies the Borrower pursuant to SECTION 2.14(D), or (iii)
the Borrower is required to make any payment pursuant to SECTION 2.16 that is
attributable to any Lender, or (iv) any Lender is a Non-Funding Lender, (b) in
the case of clause (a)(i) above, as a consequence of increased costs in respect
of which such claim is made, the effective rate of interest payable to such
Lender under this Agreement with respect to its Loans materially exceeds the
effective average annual rate of interest payable to the Requisite Lenders under
this Agreement and (c) Lenders holding at least 75% of the Revolving Credit
Commitments are not subject to such increased costs or illegality, payment or
proceedings (any such Lender, an "AFFECTED LENDER"), the Borrower may substitute
another financial institution for such Affected Lender hereunder, upon
reasonable prior written notice (which written notice must be given within 90
days following the occurrence of any of the events described in CLAUSES (A)(I),
(II), (III) or (IV)) by the Borrower to the Administrative Agent and the
Affected Lender that the Borrower intends to make such substitution, which
substitute financial institution must be an Eligible Assignee and, if not a
Lender, reasonably acceptable to the Administrative Agent; PROVIDED, HOWEVER,
that if more than one Lender claims increased costs, illegality or right to
payment arising from the same act or condition and such claims are received by
the Borrower within 30 days of each other then the Borrower may substitute all,
but not (except to the extent the Borrower has already substituted one of such
Affected Lenders before the Borrower's receipt of the other Affected Lenders'
claim) less than all, Lenders making such claims. In the event that the proposed
substitute financial institution or other entity is reasonably acceptable to the
Administrative Agent and the written notice was properly issued under this
SECTION 2.17, the Affected Lender shall sell and the substitute financial
institution or other entity shall purchase, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan
Documents and the substitute financial institution or other entity shall assume
and the Affected Lender shall be relieved of its Revolving Credit Commitments
and all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Upon the effectiveness of such sale, purchase and
assumption (which, in any event shall be conditioned upon the payment in full by
the Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution or other entity shall become a "LENDER"
hereunder for all purposes of this Agreement having a Revolving Credit
Commitment in the amount of such Affected Lender's Revolving Credit Commitment
assumed by it and such Revolving Credit Commitment of the Affected Lender shall
be terminated, provided that all indemnities under the Loan Documents shall
continue in favor of such Affected Lender.
49
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1. CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS
OF CREDIT. The obligation of each Lender to make the Loans requested to be made
by it on the Closing Date and the obligation of each Issuer to issue Letters of
Credit on the Closing Date is subject to the satisfaction of all of the
following conditions precedent:
(a) CERTAIN DOCUMENTS. The Administrative Agent shall have received
on the Closing Date each of the following, each dated the Closing Date unless
otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:
(i) this Agreement, duly executed and delivered by the
Borrower and, for the account of each Lender requesting the
same, a Revolving Credit Note or Revolving Credit Notes of the
Borrower conforming to the requirements set forth herein;
(ii) the Guaranty, duly executed by each Subsidiary
Guarantor;
(iii) the Pledge and Security Agreement, duly executed
by the Borrower and each Subsidiary Guarantor, together with:
(A) evidence satisfactory to the Administrative
Agent that the Administrative Agent (for the benefit of the
Secured Parties) has a valid and perfected first priority
security interest in the Collateral (subject to Customary
Permitted Liens), including (x) such documents duly executed
by each Loan Party as the Administrative Agent may request
with respect to the perfection of its security interests in
the Collateral (including financing statements under the UCC,
patent, trademark and copyright security agreements suitable
for filing with the Patent and Trademark Office or the
Copyright Office and other applicable documents under the laws
of any jurisdiction with respect to the perfection of Liens
created by the Pledge and Security Agreement) and (y) copies
of UCC search reports as of a recent date listing all
effective financing statements that name any Loan Party as
debtor, together with copies of such financing statements,
none of which shall cover the Collateral except for those
which shall be terminated on the Closing Date);
(B) share certificates representing all of
certificated Pledged Stock being pledged pursuant to such
Pledge and Security Agreement and stock powers for such share
certificates executed in blank;
(C) all instruments representing Pledged Notes
being pledged pursuant to such Pledge and Security Agreement
duly endorsed in favor of the Administrative Agent or in
blank; and
(D) Control Account Letters from all securities
intermediaries with respect to all securities accounts and
securities entitlements of the Borrower and such Subsidiary
Guarantor.
50
(iv) a favorable opinion of (A) ▇▇▇▇▇▇ & Bird LLP,
counsel to the Loan Parties, in substantially the form of
EXHIBIT G, (B) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, general counsel to the
Loan Parties, (C) counsel to the Loan Parties in New York,
Georgia, Pennsylvania, Texas, South Carolina and California,
in each case addressed to the Administrative Agent and the
Lenders and addressing such other matters as any Lender
through the Administrative Agent may reasonably request and
(C) counsel to the Administrative Agent as to the
enforceability of the Credit Agreement and the other Loan
Documents to be executed on the Closing Date;
(v) a copy of each Related Document certified as being
complete and correct by a Responsible Officer of the Borrower;
(vi) a copy of the Disclosure Statement, certified by
the Secretary or an Assistant Secretary of the Borrower (A) to
be a true, complete and correct copy of such document, (B) to
have been duly authorized by the Borrower's Board of Directors
and to have been duly executed by the Borrower and filed with
the Bankruptcy Court and (C) not to have been amended from the
form so certified, or rescinded;
(vii) a certificate of the Secretary or an Assistant
Secretary of the Borrower certifying (A) that attached thereto
is a true, correct and complete copy of the Confirmation Order
(including the Plan of Reorganization attached to the
Confirmation Order) and (B) that no appeal or motion for
rehearing has been filed in connection with such Confirmation
Order;
(viii) a copy of the articles or certificate of
incorporation (or equivalent organizational documents) of each
Loan Party, certified as of a recent date by the Secretary of
State of the state of incorporation of such Loan Party,
together with certificates of such official attesting to the
good standing of each such Loan Party;
(ix) a certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying (A) the names and true
signatures of each officer of such Loan Party who has been
authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or
on behalf of such Loan Party, (B) the by-laws (or equivalent
Constituent Document) of such Loan Party as in effect on the
date of such certification, (C) the resolutions of such Loan
Party's Board of Directors (or equivalent governing body)
approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to
which it is a party and (D) that there have been no changes in
the certificate of incorporation (or equivalent Constituent
Document) of such Loan Party from the certificate of
incorporation (or equivalent Constituent Document) delivered
pursuant to the immediately preceding clause;
(x) a certificate of the Chief Financial Officer of the
Borrower, stating that the Borrower is Solvent after giving
effect to the initial Loans and Letters of Credit, the
application of the proceeds thereof in accordance with SECTION
7.9 and the payment of all estimated legal, accounting and
other fees related hereto and thereto;
51
(xi) a certificate of a Responsible Officer to the
effect that (A) the condition set forth in SECTION 3.2(B) has
been satisfied and (ii) no litigation not listed on SCHEDULE
4.7 shall have been commenced against any Loan Party or any of
its Subsidiaries which, if adversely determined, would have a
Material Adverse Effect;
(xii) (A) monthly Projections through December 31, 2000
prepared by the Chief Financial Officer of the Borrower and
(B) financial models prepared by the Chief Financial Officer
of the Borrower for the period commencing on the Closing Date
and ending on the last day of the Borrower's Fiscal Year end
in 2003, in the form approved by the Board of Directors of the
Borrower, reflecting the financial effects of the
Reorganization on the Borrower and its Subsidiaries;
(xiii) evidence satisfactory to the Administrative Agent
that the insurance policies required by SECTION 7.5 and any
Collateral Document are in full force and effect, together
with endorsements naming the Administrative Agent, on behalf
of the Secured Parties, as an additional insured and/or loss
payee under all insurance policies to be maintained with
respect to the properties of the Borrower and its
Subsidiaries; and
(xiv) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through
the Administrative Agent may reasonably request.
(b) CASH MANAGEMENT. The Administrative Agent shall be satisfied that,
as of the Closing Date, the procedures with respect to cash management required
by SECTION 7.12 and the Collateral Documents have been established and are
currently being maintained by each Loan Party, together with copies of all
executed Blocked Account Letters executed by such Loan Party in connection
therewith.
(c) FEES AND EXPENSES PAID. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders, as applicable, all fees due and payable on or before the Closing Date
(including all such fees described in the Fee Letter), and all expenses due and
payable on or before the Closing Date.
(d) RELATED DOCUMENTS. The Administrative Agent shall be satisfied
that: (i) the terms and conditions of the Related Documents shall not have been
amended, waived or modified without the approval of the Administrative Agent
(other than non-material amendments, waivers and modifications to such terms
that do not in the aggregate materially adversely affect the interests of the
Administrative Agent and the Lenders), and (ii) the Related Documents shall have
been approved by all corporate action of the Borrower and each of the other
parties thereto, shall be in full force and effect and there shall not have
occurred and be continuing any material breach or default thereunder.
(e) CONSENTS, ETC. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
consents and authorizations of, and effected all notices to and filings with,
any Governmental Authority, in each case, as may be necessary to allow each of
the Borrower and its Subsidiaries lawfully (A) to execute, deliver and perform,
in all material respects, their respective obligations hereunder, the Loan
Documents and the Related Documents
52
to which each of them, respectively, is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, and (B) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents.
(f) PLAN OF REORGANIZATION. (i) The terms and conditions of the
Plan of Reorganization shall not have been amended or modified from the form of
the Plan of Reorganization attached to the Confirmation Order without the
approval of the Requisite Lenders; (ii) all conditions precedent to the
effectiveness of the Plan of Reorganization shall have been satisfied (or waived
with the consent of the Requisite Lenders); (iii) the Confirmation Order shall
have become a Final Order; (iv) the Administrative Agent shall be satisfied that
the Bankruptcy Court's retention of jurisdiction under the Confirmation Order
will not govern the enforcement of the Loan Documents; and (v) the Effective
Date of Reorganization shall have occurred.
(g) FIELD EXAMINATION. The Administrative Agent shall be satisfied
with the results of a field examination of the Borrower and its Subsidiaries
conducted by Citicorp's internal auditors no more than two weeks prior to the
Closing Date.
(h) ENVIRONMENTAL ASSESSMENTS. For each material piece of real
property owned by the Borrower or any of its Subsidiaries, the Administrative
Agent shall have received an environmental site assessment report prepared by a
consultant acceptable to the Administrative Agent and in a form and scope
satisfactory to the Administrative Agent, that demonstrates, to the sole
satisfaction of the Lenders, the absence of Environmental Liabilities and Costs
in excess of $1,000,000 in the aggregate and no significant risk thereof.
SECTION 3.2. CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF
CREDIT. The obligation of each Lender on any date (including the Closing Date)
to make any Loan and of each Issuer on any date (including the Closing Date) to
issue any Letter of Credit is subject to the satisfaction of all of the
following conditions precedent:
(a) REQUEST FOR BORROWING OR ISSUANCE OF LETTER OF CREDIT. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing or, in the case of Swing Loans, a duly executed
Swing Loan Request, and with respect to any Letter of Credit, the Administrative
Agent and the Issuer shall have received a duly executed Letter of Credit
Request.
(b) REPRESENTATIONS AND WARRANTIES; NO DEFAULTS. The following
statements shall be true on the date of such Loan or issuance, both before and
after giving effect thereto and, in the case of such Loan, to the application of
the proceeds therefrom:
(i) The representations and warranties set forth in
ARTICLE IV and in the other Loan Documents shall be true and
correct on and as of the Closing Date and shall be true and
correct in all material respects on and as of any such date
after the Closing Date with the same effect as though made on
and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date;
(ii) no Default or Event of Default has occurred and is
continuing; and
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(iii) the Borrower shall have delivered the Borrowing
Base Certificate required by SECTION 6.1(H).
(c) BORROWING BASE. After giving effect to the Loans or Letters
of Credit requested to be made or issued on any such date and the use of
proceeds thereof, the Revolving Credit Obligations shall not exceed the Maximum
Credit at such time.
(d) NO LEGAL IMPEDIMENTS. The making of the Loans or the issuance
of such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance and is not enjoined,
temporarily, preliminarily or permanently.
(e) TITLE/LIEN PRIORITY. In jurisdictions where a revolving credit
endorsement is not available, the Administrative Agent shall have received such
endorsements to Mortgagee's Title Insurance Policies for each parcel of Eligible
Real Property, in form and substance satisfactory to the Administrative Agent in
its sole discretion, as the Administrative Agent shall require, including "bring
down endorsements" to insure that, after giving effect to such advance of the
Loan or Letter of Credit, the Liens created by the applicable Mortgages and
insured by such Mortgagee's Title Insurance Policies constitute valid first
priority Liens on such parcels of Real Property, free and clear of all defects
and encumbrances, except those referred to in such Mortgagee's Title Insurance
Policies at the time such policies were originally issued to the mortgagee, and
that each Mortgagee's Title Insurance Policy is in an amount equal to the
Mortgage Value of the applicable parcel of Eligible Real Property as of the
closing date of such Loan or Letter of Credit.
(f) ADDITIONAL MATTERS. The Administrative Agent shall have received
such additional information and materials as the Administrative Agent may
reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request and the issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in SECTION 3.2(B) on the
date of the making of such Loan or the issuance of such Letter of Credit.
SECTION 3.3. CONDITIONS TO INCREASED FIXED ASSET AMOUNT
AVAILABILITY. The obligation of each Lender to make Loans (and of each Issuer to
issue Letters of Credit) to the Borrower based upon the eligibility criteria set
forth in clause (B) of the definition of "FIXED ASSET AMOUNT" is subject to the
receipt by the Administrative Agent within 60 days after the Closing Date of the
following documents in form and substance reasonably satisfactory to the
Administrative Agent (with sufficient copies for each lender):
(a) Mortgages covering the Borrower's Real Property located in
Gaffney, South Carolina, Macon, Georgia, Waco, Texas, Norcross, Georgia and
Harmony, Pennsylvania, together with current as-built surveys, zoning letters
(if reasonably available) and certificates of occupancy (if reasonably
available), in each case reasonably satisfactory in form and substance to the
Administrative Agent; (B) Mortgagee's Title Insurance Policies insuring such
Mortgages sufficient to create a valid and enforceable first priority Lien
(subject to Liens permitted under SECTION 8.2) on property described therein in
favor of the Administrative Agent for the benefit of the Secured Parties (or in
favor of such other trustee as may be required or desired under local
54
law); and (C) an opinion of counsel in each state in which any such Mortgage is
to be recorded opining as to the enforceability of such Mortgage and addressing
such other matters as any Lender through the Administrative Agent may reasonably
request, subject to typical or reasonable qualifications and assumptions and
otherwise in form and substance and from counsel reasonably satisfactory to the
Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative
Agent to enter into this Agreement, the Borrower represents and warrants to the
Lenders, the Issuers and the Administrative Agent that, on and as of the Closing
Date, after giving effect to the Reorganization and the making of the Loans and
other financial accommodations on the Closing Date and on and as of each date as
required by SECTION 3.2(B)(I):
SECTION 4.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of
the Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation; (b) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect; (c) has all requisite power and authority and the legal right to own,
pledge, mortgage and operate its properties, to lease the property it operates
under lease and to conduct its business as now or currently proposed to be
conducted; (d) is in compliance with its Constituent Documents; (e) is in
compliance with all applicable Requirements of Law except where the failure to
be in compliance would not in the aggregate have a Material Adverse Effect; and
(f) has all necessary licenses, permits, consents or approvals from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings which can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not in the aggregate have a Material Adverse Effect.
SECTION 4.2. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS.
(a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation of the transactions
contemplated thereby:
(i) are within such Loan Party's corporate, limited
liability company, partnership or other powers;
(ii) have been or, at the time of delivery thereof
pursuant to ARTICLE III will have been duly authorized by all
necessary corporate action, including the consent of
shareholders where required;
(iii) do not and will not (A) contravene any Loan Party's
or any of its Subsidiaries' respective Constituent Documents,
(B) violate any other Requirement of Law applicable to any
Loan Party (including Regulations T, U and X of the Federal
Reserve Board), or any order or decree of any Governmental
Authority or arbitrator
55
applicable to any Loan Party, (C) conflict with or result in
the breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any Contractual
Obligation of any Loan Party or any of its Subsidiaries, or
(D) result in the creation or imposition of any Lien upon any
of the property of any Loan Party or any of its Subsidiaries,
other than those in favor of the Secured Parties pursuant to
the Collateral Documents; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those
listed on SCHEDULE 4.2 and which have been or will be, prior
to the Closing Date, obtained or made, copies of which have
been or will be delivered to the Administrative Agent pursuant
to SECTION 3.1, and each of which on the Closing Date will be
in full force and effect and, with respect to the Collateral,
filings required to perfect the Liens created by the
Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents will
have been upon delivery thereof pursuant to the terms of this Agreement, duly
executed and delivered by each Loan Party party thereto. This Agreement is, and
the other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms.
SECTION 4.3. OWNERSHIP OF BORROWER; SUBSIDIARIES.
(a) The authorized capital stock of the Borrower consists of
25,000,000 shares of common stock, $.01 par value per share, of which 11,891,000
shares are issued and outstanding, and 5,000,000 shares of preferred stock, of
which no shares are issued and outstanding. All of the outstanding capital stock
of the Borrower has been validly issued, is fully paid and non-assessable. No
Stock of the Borrower is subject to any option, warrant, right of conversion or
purchase or any similar right (other than the Option Agreement, the Warrant
Agreement, any shareholder agreements or stock option plans with respect to the
Borrower). There are no agreements or understandings to which the Borrower is a
party with respect to the voting, sale or transfer of any shares of Stock of the
Borrower or any agreement restricting the transfer or hypothecation of any such
shares (other than the Option Agreement, the Warrant Agreement, any shareholder
agreements or stock option plans with respect to the Borrower).
(b) Set forth on SCHEDULE 4.3 hereto is a complete and accurate list
showing, as of the Closing Date, all Subsidiaries of the Borrower and, as to
each such Subsidiary, the jurisdiction of its incorporation, the number of
shares of each class of Stock authorized (if applicable), the number outstanding
on the Closing Date and the number and percentage of the outstanding shares of
each such class owned (directly or indirectly) by the Borrower. No Stock of any
Subsidiary of the Borrower is subject to any outstanding option, warrant, right
of conversion or purchase or any similar right. All of the outstanding Stock of
each Subsidiary of the Borrower owned (directly or indirectly) by the Borrower
has been validly issued, is fully paid and non-assessable and is owned by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Lien in favor of the Secured Parties created pursuant to the Pledge and
Security Agreement). Neither the Borrower nor any such Subsidiary is a party to,
or has knowledge of, any agreement restricting the transfer or hypothecation of
any Stock of any such Subsidiary, other than the Loan Documents or the Senior
Subordinated Note Indenture. The
56
Borrower does not own or hold, directly or indirectly, any Stock of any Person
other than such Subsidiaries and Investments permitted by SECTION 8.3.
SECTION 4.4. FINANCIAL STATEMENTS.
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as at December 28, 1998, and the related consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, and the
consolidated balance sheets of the Borrower and its Subsidiaries as at September
26, 1999, and the related consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiaries for the nine months then
ended, copies of which have been furnished to each Lender, fairly present,
subject, in the case of said balance sheets as at September 26, 1999, and said
statements of income, retained earnings and cash flows for the nine months then
ended, to the absence of footnote disclosure and normal recurring year-end audit
adjustments, the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such dates, all in
conformity with GAAP.
(b) Except as disclosed on SCHEDULE 4.8, as of the Closing Date,
neither the Borrower nor any of its Subsidiaries has any material obligation,
contingent liability or liability for taxes, long-term leases or unusual forward
or long-term commitment which is not reflected in the Financial Statements
referred to in CLAUSE (A) above or in the notes thereto or permitted by this
Agreement.
(c) The Projections have been prepared by the Borrower in light of the
past operations of its business, and reflect projections for the three year
period beginning on January 1, 2000 on a month by month basis. The Projections
are based upon estimates and assumptions stated therein, all of which the
Borrower believes to be reasonable and fair in light of current conditions and
current facts known to the Borrower and, as of the Closing Date, reflect the
Borrower's good faith and reasonable estimates of the future financial
performance of the Borrower and its Subsidiaries and of the other information
projected therein for the periods set forth therein.
SECTION 4.5. MATERIAL ADVERSE CHANGE. Since September 30, 1999,
there has been no Material Adverse Change and there have been no events or
developments that in the aggregate have had a Material Adverse Effect.
SECTION 4.6. SOLVENCY. After giving effect to (a) the Loans and
Letter of Credit Obligations to be made or extended on the Closing Date or such
other date as Loans and Letter of Credit Obligations requested hereunder are
made or extended, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of the Borrower, (c) the Reorganization and the consummation of
the other financing transactions contemplated hereby and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Loan
Party is Solvent.
SECTION 4.7. LITIGATION. There are no pending or, to the knowledge
of the Borrower, threatened actions, investigations or proceedings affecting the
Borrower, or any of its Subsidiaries before any court, Governmental Authority or
arbitrator other than those that in the aggregate would not have a Material
Adverse Effect. The performance of any action by any Loan
57
Party required or contemplated by any of the Loan Documents or the Related
Documents is not restrained or enjoined (either temporarily, preliminarily or
permanently). SCHEDULE 4.7 lists all litigation pending against any Loan Party
at the date hereof which, if adversely determined, would have a Material Adverse
Effect.
SECTION 4.8. TAXES.
(a) All federal, state, local and foreign income and franchise
and other material tax returns, reports and statements (collectively, the "TAX
RETURNS") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where such Tax Returns are
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP. Except as disclosed on SCHEDULE 4.8, as of
the Closing Date no Tax Return is under audit or examination by any Governmental
Authority and no notice of such an audit or examination or any assertion of any
claim for Taxes has been given or made by any Governmental Authority. Proper and
accurate amounts have been withheld by the Borrower and each of its Tax
Affiliates from their respective employees for all periods in material
compliance with the tax, social security and unemployment withholding provisions
of applicable Requirements of Law and such withholdings have been timely paid to
the respective Governmental Authorities.
(b) As of the Closing Date and except as listed on SCHEDULE 4.8, none
of the Borrower or any of its Tax Affiliates has (i) executed or filed with the
IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for the filing of any
Tax Return or the assessment or collection of any charges; (ii) any obligation
under any tax sharing agreement or arrangement other than that to which the
Administrative Agent has a copy prior to the date hereof; or (iii) been a member
of an affiliated, combined or unitary group other than the group of which the
Borrower (or its Tax Affiliate) is the common parent.
SECTION 4.9. FULL DISCLOSURE. The information prepared or
furnished by or on behalf of the Borrower and its Subsidiaries in connection
with this Agreement or the Related Documents or the consummation of the
financing and the Reorganization taken as a whole does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading. All facts known to
the Borrower which are material to an understanding of the financial condition,
business, properties or prospects of the Borrower and its Subsidiaries taken as
one enterprise have been disclosed to the Lenders.
SECTION 4.10. MARGIN REGULATIONS. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Federal Reserve Board),
and no proceeds of any Borrowing will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock in contravention of Regulation T, U or X of the Federal Reserve
Board.
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SECTION 4.11. NO BURDENSOME RESTRICTIONS; NO DEFAULTS.
(a) Neither the Borrower nor any of its Subsidiaries (i) is a party
to any Contractual Obligation the compliance with which would have a Material
Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation
of a Lien (other than a Lien permitted under SECTION 8.2) on the property or
assets of any thereof or (ii) is subject to any charter or corporate restriction
which would have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of the Borrower, no other party is in default under or with respect to
any Contractual Obligation owed to any Loan Party or to any Subsidiary of a Loan
Party, other than, in either case, those defaults which in the aggregate would
not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of the Borrower, there is no Requirement
of Law applicable to any Loan Party the compliance with which by such Loan Party
would have a Material Adverse Effect.
SECTION 4.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. Neither the Borrower nor any of its Subsidiaries is (a) an
"INVESTMENT COMPANY" or an "AFFILIATED PERSON" of, or "PROMOTER" or "PRINCIPAL
UNDERWRITER" for, an "INVESTMENT COMPANY," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "HOLDING COMPANY," or an
"AFFILIATE" or a "HOLDING COMPANY" or a "SUBSIDIARY COMPANY" of a "HOLDING
COMPANY," as each such term is defined and used in the Public Utility Holding
Act of 1935, as amended.
SECTION 4.13. USE OF PROCEEDS. The proceeds of the Loans and the
Letters of Credit are being used by the Borrower solely as follows: (a) to pay
any administrative, priority, secured and unsecured claims of the Borrower in
connection with the Reorganization, to pay professional fees and to pay related
transaction costs, fees and expenses and (b) for working capital and general
corporate purposes.
SECTION 4.14. INSURANCE. All policies of insurance of any kind or
nature of the Borrower or any of its Subsidiaries, including policies of life,
fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are in full force and effect and are of a nature and provide
such coverage as is sufficient and as is customarily carried by businesses of
the size and character of such Person. None of the Borrower or any of its
Subsidiaries has been refused insurance for any material coverage which it had
applied or had any policy of insurance terminated (other than at its request).
SECTION 4.15. LABOR MATTERS.
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Borrower or any of their
respective Subsidiaries, other than those which in the aggregate would not have
a Material Adverse Effect.
59
(b) There are no unfair labor practices, grievances or complaints
pending, or, to the Borrower's knowledge, threatened against or involving the
Borrower or any of it Subsidiaries, nor are there any arbitrations or grievances
threatened involving the Borrower or any of its Subsidiaries, other than those
which, in the aggregate, if resolved adversely to the Borrower or such
Subsidiary, would not have a Material Adverse Effect.
(c) Except as set forth on SCHEDULE 4.15, as of the Closing Date,
there is no collective bargaining agreement covering any of the employees of the
Borrower or its Subsidiaries.
(d) SCHEDULE 4.15 sets forth as of the date hereof, all material
consulting agreements, executive employment agreements, executive compensation
plans, deferred compensation agreements, employee stock purchase and stock
option plans and severance plans of the Borrower and any of its Subsidiaries.
SECTION 4.16. ERISA.
(a) SCHEDULE 4.16 separately identifies as of the date hereof
all Title IV Plans, all Multiemployer Plans and all of the employee benefit
plans within the meaning of Section 3(3) of ERISA to which the Borrower or any
of its Subsidiaries has any obligation or liability, contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code does so
qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures in the
aggregate would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur,
any ERISA Event which would have a Material Adverse Effect.
(e) Except to the extent set forth on SCHEDULE 4.16, none of the
Borrower, any of the Borrower's Subsidiaries or any ERISA Affiliate would have
any Withdrawal Liability as a result of a complete withdrawal as of the date
hereof from any Multiemployer Plan.
SECTION 4.17. ENVIRONMENTAL MATTERS.
(a) The operations of the Borrower and each of its Subsidiaries have
been and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental, health and safety Permits, other than
non-compliances that in the aggregate would not have a Material Adverse Effect.
(b) None of the Borrower or any of its Subsidiaries or any Real
Property currently or, to the knowledge of the Borrower, previously owned,
operated or leased by or for the Borrower or any of its Subsidiaries is subject
to any pending or, to the knowledge of the Borrower, threatened, claim, order,
agreement, notice of violation, notice of potential liability or is the subject
of any pending or threatened proceeding or governmental investigation under or
60
pursuant to Environmental Laws other than those that in the aggregate would not
have a Material Adverse Effect.
(c) Except as disclosed on SCHEDULE 4.17, none of the Borrower or any
of its Subsidiaries is a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 ▇.▇.▇.▇▇. 6901 ET
SEQ., the regulations thereunder or any state analog.
(d) There are no facts, circumstances or conditions arising out of or
relating to the operations or ownership of real property owned, operated or
leased by the Borrower or any of its Subsidiaries which are not specifically
included in the financial information furnished to the Lenders other than those
that in the aggregate would not have a Material Adverse Effect.
(e) As of the date hereof, no Environmental Lien has attached to any
property of the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, no facts, circumstance or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has provided the
Lenders with copies of all environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower or any of its
Subsidiaries or any of their real property that are in the possession, custody
or control of the Borrower or any of its Subsidiaries.
SECTION 4.18. INTELLECTUAL PROPERTY. Other than Intellectual
Property (as defined in the Pledge and Security Agreement) owned or licensed by
customers of the Borrower or any of its Subsidiaries and used by the Borrower or
any of its Subsidiaries at the direction of such customers, the Borrower and its
Subsidiaries own or license or otherwise have the right to use all licenses,
permits, valid patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights (including all
Intellectual Property as defined in the Pledge and Security Agreement) that are
necessary for the operations of their respective businesses as such businesses
are currently being conducted, without infringement upon or conflict with the
rights of any other Person with respect thereto, including all trade names
associated with any private label brands of the Borrower or any of its
Subsidiaries, other than any such infringements or conflicts that in the
aggregate have no Material Adverse Effect. To the Borrower's knowledge, no
slogan or other advertising device, product, process, method, substance, part or
component, or other material now employed, or now contemplated to be employed,
by the Borrower or any of its Subsidiaries materially infringes upon or
conflicts with any rights including any of the Intellectual Property owned by
any other Person, and no claim or litigation regarding any of the foregoing
including Intellectual Property is pending or threatened, other than any such
infringements or conflicts which do not (in the aggregate) have a Material
Adverse Effect.
SECTION 4.19. TITLE; REAL PROPERTY.
(a) Each of the Borrower and its Subsidiaries has good, marketable
and indefeasible fee simple title to, or valid leasehold interests in, all Real
Property and good title to all personal property purported to be owned by it,
including those reflected on the most recent Financial Statements delivered by
the Borrower, free and clear of any liens, encumbrances and charges whatsoever
except Liens permitted under SECTION 8.2. The Borrower and its Subsidiaries
61
have received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect the Borrower's and its Subsidiaries' right, title and
interest in and to all such property.
(b) Set forth on SCHEDULE 4.19 hereto is a complete and accurate
list of all Real Property owned by each Loan Party and its Subsidiaries showing
as of the Closing Date the street address, county or other relevant
jurisdiction, state, and record owner.
(c) All components of all improvements included within the Real
Property owned or leased by any Loan Party or any of its Subsidiaries
(collectively, "IMPROVEMENTS"), including the roofs and structural elements
thereof and the heating, ventilation, air conditioning, plumbing, electrical,
mechanical, sewer, waste water, storm water, paving and parking equipment,
systems and facilities included therein, are maintained in good working order
and repair, ordinary wear and tear excepted, except where the failure to so
maintain would not have a Material Adverse Effect. All water, gas, electrical,
steam, compressed air, telecommunication, sanitary and storm sewage lines and
systems and other similar systems serving the real property owned or leased by
any Loan Party or any of its Subsidiaries are installed and operating and are
sufficient to enable the Real Property owned or leased by such Loan Party or
Subsidiary to continue to be used and operated in the manner currently being
used and operated, and no Loan Party nor any of its Subsidiaries has any
knowledge of any factor or condition that could result in the termination or
material impairment of the furnishing thereof, other than any such terminations
or impairments which do not in the aggregate have a Material Adverse Effect. No
Improvement or portion thereof is dependent for its access, operation or utility
on any land, building or other Improvement not included in the Real Property
owned or leased by any Loan Party or any of its Subsidiaries.
(d) As of the Closing Date, no portion of any Real Property owned or
leased by any Loan Party or any of its Subsidiaries has suffered any material
damage by fire or other casualty loss which has not heretofore been completely
repaired and restored to its original condition. Except as set forth in the
surveys, no portion of any Real Property owned or leased by any Loan Party or
any of its Subsidiaries is located in a special flood hazard area as designated
by any federal Governmental Authority.
(e) All Permits required to have been issued or appropriate to enable
all real property owned or leased by the Borrower or any of its Subsidiaries to
be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, other than those which in the aggregate would not have a Material
Adverse Effect.
(f) None of the Borrower or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property owned or leased by the
Borrower or any of its Subsidiaries or any part thereof, except those which, in
the aggregate, would not have a Material Adverse Effect.
SECTION 4.20. RELATED DOCUMENTS.
(a) The execution, delivery and performance by each Loan Party of the
Related Documents to which it is a party and the consummation of the
transactions contemplated thereby by such Loan Party:
62
(i) are within such Loan Party's respective corporate,
limited liability company, partnership or other powers;
(ii) have been duly authorized by all necessary
corporate or other action, including the consent of
stockholders where required;
(iii) do not and will not (A) contravene or violate any
Loan Party's or any of its Subsidiaries' respective
Constituent Documents, (B) violate any other Requirement of
Law applicable to any Loan Party, or any order or decree of
any Governmental Authority or arbitrator, (C) conflict with or
result in the breach of, or constitute a default under, or
result in or permit the termination or acceleration of, any
Contractual Obligation of any Loan Party or any of its
Subsidiaries, except for those that in the aggregate would not
have a Material Adverse Effect or (D) result in the creation
or imposition of any Lien upon any of the property of any Loan
Party or any of its Subsidiaries; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those
which will have been obtained at the Closing Date, each of
which will be in full force and effect on the Closing Date and
none of which will on the Closing Date impose materially
adverse conditions upon the exercise of control by the
Borrower over any of its Subsidiaries or those which in the
aggregate, if not obtained, would not have a Material Adverse
Effect.
(b) Each of the Related Documents has been or at the Closing Date will
have been duly executed and delivered by each Loan Party party thereto and at
the Closing Date will be the legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance with its
terms.
(c) None of the Related Documents has been amended or modified in any
respect and no provision therein has been waived, except in each case to the
extent permitted by SECTION 8.11, and each of the representations and warranties
therein are true and correct in all material respects and no default or event
which with the giving of notice or lapse of time or both would be a default has
occurred thereunder.
(d) The Obligations constitute "Senior Indebtedness" as defined in the
Senior Subordinated Note Indenture.
SECTION 4.21. YEAR 2000 COMPLIANCE. The business and operations of
the Borrower and its Subsidiaries have not been adversely affected by the risk
that computer applications used by the Borrower and its Subsidiaries may not be
Year 2000 Compliant.
ARTICLE V
FINANCIAL COVENANTS
As long as there are any Revolving Credit Outstandings or the
Revolving Credit Commitments remain outstanding, unless the Requisite Lenders
otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
63
SECTION 5.1. MAXIMUM LEVERAGE RATIO. The Borrower will maintain
a Leverage Ratio, as determined as of the last day of each Fiscal Quarter set
forth below, for the four Fiscal Quarters ending on such day (which compliance
shall be maintained from the beginning of the first day of such four
fiscal-quarter period through the end of the last day of such period), of not
more than the maximum ratio set forth opposite such Fiscal Quarter:
FISCAL QUARTER ENDING MAXIMUM LEVERAGE RATIO
--------------------------------------- ---------------------------
April 1, 2001 4.75 to 1
July 1, 2001 4.75 to 1
September 30, 2001 4.75 to 1
December 30, 2001 4.50 to 1
March 31, 2002 4.50 to 1
June 30, 2002 4.50 to 1
September 29, 2002 4.50 to 1
December 29, 2002 4.00 to 1
SECTION 5.2. MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower will
maintain a Fixed Charge Coverage Ratio, as determined as of the last day of each
Fiscal Quarter set forth below, for the four Fiscal Quarters ending on such day,
of at least the minimum ratio set forth opposite such Fiscal Quarter:
FISCAL QUARTER ENDING MINIMUM FIXED
CHARGE COVERAGE
RATIO
--------------------------------------- ---------------------------
April 1, 2001 1.00 to 1
July 1, 2001 1.00 to 1
September 30, 2001 1.00 to 1
December 30, 2001 1.00 to 1
March 31, 2002 1.00 to 1
June 30, 2002 1.00 to 1
September 29, 2002 1.00 to 1
December 29, 2002 1.00 to 1
SECTION 5.3. MINIMUM EBITDA. The Borrower will have, as of the
last day of each Fiscal Quarter set forth below, EBITDA for the four Fiscal
Quarters ending on such day (or with respect to the Fiscal Quarters ending on or
before December 31,2000, the period commencing on the Closing Date and ending on
the last day of such Fiscal Quarter) of not less than the following:
FISCAL QUARTER ENDING MINIMUM EBITDA
------------------------------------- -----------------------------
March 26, 2000 $3,000,000
June 25, 2000 $13,000,000
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September 24, 2000 $23,000,000
December 31, 2000 $34,000,000
SECTION 5.4. MAINTENANCE OF TANGIBLE NET WORTH. The Borrower will maintain
during each Fiscal Quarter set forth below a Tangible Net Worth of not less than
the minimum amount set forth opposite such Fiscal Quarter:
FISCAL QUARTER ENDING MINIMUM TANGIBLE
NET WORTH
--------------------------------------- --------------------------
March 26, 2000 $95,000,000
June 25, 2000 $95,000,000
September 24, 2000 $95,000,000
December 31, 2000 $97,500,000
April 1, 2001 $100,000,000
July 1, 2001 $102,500,000
September 30, 2001 $106,250,000
December 30, 2001 $110,000,000
March 31, 2002 $111,250,000
June 30, 2002 $118,000,000
September 29, 2002 $123,000,000
December 29, 2002 $129,000,000
SECTION 5.5. CAPITAL EXPENDITURES. The Borrower will not permit Capital
Expenditures to be made or incurred during each of the Fiscal Years set forth
below to be in excess of the maximum amount set forth below for such Fiscal
Year:
FISCAL YEAR MAXIMUM CAPITAL
EXPENDITURES
--------------------------------------- --------------------------
2000 $30,000,000
2001 $30,000,000
2002 $34,000,000
PROVIDED, HOWEVER, that to the extent that actual Capital Expenditures for any
such Fiscal Year shall be less than the maximum amount set forth above for such
Fiscal Year (without giving effect to the carryover permitted by this proviso),
the difference between said stated maximum amount and such actual Capital
Expenditures shall, in addition, be available for Capital Expenditures in the
next succeeding Fiscal Year.
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ARTICLE VI
REPORTING COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, the Borrower agrees with the Lenders and the Administrative Agent
that:
SECTION 6.1. FINANCIAL STATEMENTS. The Borrower shall furnish to
the Administrative Agent (with sufficient copies for each of the Lenders) the
following Financial Statements:
(a) MONTHLY REPORTS. Within 30 days after the end of each Fiscal
Month in each Fiscal Year, financial information regarding the Borrower and its
Subsidiaries consisting of consolidated unaudited balance sheets as of the close
of such month and the related statements of income and cash flow for such month
and that portion of the current Fiscal Year ending as of the close of such
month, setting forth in comparative form the figures for the corresponding
period in the prior year and, for the first year following the Closing Date, the
figures contained in the monthly Projections, and thereafter, the figures
contained in the annual business plan (as described in CLAUSE (E) of this
SECTION 6.1), for the current Fiscal Year, in each case certified by a
Responsible Officer of the Borrower as fairly presenting the consolidated
financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in accordance with GAAP (subject to the absence of footnote disclosure
and normal year-end audit adjustments).
(b) QUARTERLY REPORTS. Within 45 days after the end of each Fiscal
Quarter of each Fiscal Year, financial information regarding the Borrower and
its Subsidiaries consisting of consolidated and consolidating unaudited balance
sheets as of the close of such quarter and the related statements of income and
cash flow for such quarter and that portion of the Fiscal Year ending as of the
close of such quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for the current Fiscal Year, in each case certified by a Responsible
Officer of the Borrower as fairly presenting the consolidated and consolidating
financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in accordance with GAAP (subject to the absence of footnote disclosure
and normal year-end audit adjustments).
(c) ANNUAL REPORTS. Within 90 days after the end of each Fiscal Year,
financial information regarding the Borrower and its Subsidiaries consisting of
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such consolidated
financial statements, without qualification as to the scope of the audit by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public accountants of recognized
national standing acceptable to the Administrative Agent, together with the
report of such accounting firm stating that (i) such financial statements fairly
present the consolidated financial position of the Borrower and its Subsidiaries
as at the dates indicated and the results of their operations and cash flow for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which such independent certified public
accountants shall concur and which
66
shall have been disclosed in the notes to the financial statements), and (ii)
the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards, and accompanied by a certificate stating that in the course
of the regular audit of the business of the Borrower and its Subsidiaries such
accounting firm has obtained no knowledge that a Default or Event of Default in
respect of the financial covenants contained in ARTICLE V has occurred and is
continuing, or, if in the opinion of such accounting firm, a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof.
(d) COMPLIANCE CERTIFICATE. Together with each delivery of any
financial statement pursuant to CLAUSES (B) and (C) of this SECTION 6.1, a
certificate of a Responsible Officer of the Borrower (each, a "COMPLIANCE
CERTIFICATE") (i) showing in reasonable detail the calculations used in
determining the Leverage Ratio (for purposes of determining the Applicable
Margin) and demonstrating compliance with each of the financial covenants
contained in ARTICLE V which is tested on a quarterly basis and (ii) stating
that no Default or Event of Default has occurred and is continuing or, if a
Default or an Event of Default has occurred and is continuing, stating the
nature thereof and the action which the Borrower proposes to take with respect
thereto.
(e) BUSINESS PLAN. Not later than 30 days prior to the end of each
Fiscal Year, and containing substantially the types of financial information
contained in the Projections, (i) the annual business plan of the Borrower for
the next succeeding Fiscal Year approved by the Board of Directors of the
Borrower, (ii) forecasts prepared by management of the Borrower for each fiscal
month in the next succeeding Fiscal Year, and (iii) forecasts prepared by
management of the Borrower for each of the succeeding Fiscal Years through the
Fiscal Year in which the Revolving Credit Termination Date is scheduled to
occur, including, in each instance described in CLAUSE (II) and CLAUSE (III)
above, (A) a projected year-end consolidated balance sheet and income statement
and statement of cash flows and (B) a statement of all of the material
assumptions on which such forecasts are based.
(f) MANAGEMENT LETTERS, ETC. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from its independent
certified public accountants.
(g) INTERCOMPANY LOAN BALANCES. Together with each delivery of any
financial statement pursuant to CLAUSE (A) of this SECTION 6.1, a summary of the
outstanding balance of all intercompany Indebtedness as of the last day of the
fiscal month covered by such financial statement, certified by a Responsible
Officer.
(h) BORROWING BASE CERTIFICATES. No later than the tenth Business Day
of each Fiscal Month, a Borrowing Base Certificate as of the first day of such
month executed by a Responsible Officer of the Borrower; PROVIDED, HOWEVER, that
if at any time the aggregate Revolving Credit Outstandings exceed 50% of the
lesser of (i) $95,000,000 and (ii) the Available Credit, the Borrower shall
deliver a Borrowing Base Certificate on the last Business Day of the first week
ending after such time and on the last Business Day of each two-week period
ending thereafter until such time as such bi-weekly certificate is no longer
required hereunder.
(i) ADDITIONAL INFORMATION. Promptly, from time to time, such other
information regarding the operations, including information regarding specific
product categories and lines of business of the Borrower and its Subsidiaries,
business affairs and financial condition of the
67
Borrower or any of its Subsidiaries, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 6.2. DEFAULT NOTICES. As soon as practicable, and in any
event within five Business Days after a Responsible Officer of any Loan Party
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect or which has any reasonable
likelihood of causing or resulting in a Material Adverse Change, the Borrower
shall give the Administrative Agent notice specifying the nature of such Default
or Event of Default or other event, including the anticipated effect thereof,
which notice, if given by telephone, shall be promptly confirmed in writing on
the next Business Day.
SECTION 6.3. LITIGATION. Promptly after the commencement thereof,
the Borrower shall give the Administrative Agent written notice of the
commencement of all actions, suits and proceedings before any domestic or
foreign Governmental Authority or arbitrator, affecting the Borrower or any of
its Subsidiaries, which in the reasonable judgment of the Borrower or such
Subsidiary, expose the Borrower or such Subsidiary to liability in an amount
aggregating $100,000 or more or which, if adversely determined, would have a
Material Adverse Effect.
SECTION 6.4. NOTICES UNDER RELATED DOCUMENTS. Promptly after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of all material notices, certificates or reports delivered pursuant to
any Related Document.
SECTION 6.5. SEC FILINGS; PRESS RELEASES. Promptly after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of (a) all reports which the Borrower sends to its Security holders
generally, (b) all reports and registration statements which the Borrower or any
of its Subsidiaries files with the Securities and Exchange Commission or any
national or foreign securities exchange or the National Association of
Securities Dealers, Inc., (c) all press releases and (d) all other statements
concerning material changes or developments in the business of such Loan Party
made available by any Loan Party to the public.
SECTION 6.6. LABOR RELATIONS. Promptly after becoming aware of
the same, the Borrower shall give the Administrative Agent written notice of (a)
any material labor dispute to which the Borrower of any of its Subsidiaries is
or may become a party, including any strikes, lockouts or other material
disputes relating to any of such Person's plants and other facilities, and (b)
any Worker Adjustment and Retraining Notification Act or related material
liability incurred with respect to the closing of any plant or other facility of
any of such Person.
SECTION 6.7. TAX RETURNS. Upon the request of any Lender,
through the Administrative Agent, the Borrower will provide copies of all
federal, state, local and foreign tax returns and reports filed by the Borrower
or any of its Subsidiaries in respect of taxes measured by income (excluding
sales, use and like taxes).
SECTION 6.8. INSURANCE. As soon as is practicable and in any
event within 90 days after the end of each Fiscal Year, the Borrower will
furnish the Administrative Agent (in sufficient copies for each of the Lenders)
with (a) a report in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders outlining all material insurance coverage
maintained as of the date of such report by the Borrower and its Subsidiaries
and the duration of
68
such coverage and (b) an insurance broker's statement that all premiums then due
and payable with respect to such coverage have been paid.
SECTION 6.9. ERISA MATTERS. The Borrower shall furnish the
Administrative Agent (with sufficient copies for each of the Lenders):
(a) promptly and in any event within 30 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred;
(b) promptly and in any event within 10 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
a request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of a Responsible Officer of the Borrower describing such ERISA Event
or waiver request and the action, if any, which the Borrower, its Subsidiaries
and ERISA Affiliates propose to take with respect thereto and a copy of any
notice filed with the PBGC or the IRS pertaining thereto;
(c) simultaneously with the date that the Borrower, any of its
Subsidiaries or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.
SECTION 6.10. ENVIRONMENTAL MATTERS. The Borrower shall provide
the Administrative Agent promptly and in any event within 10 Business Days of
the Borrower or any Subsidiary learning of any of the following, written notice
of any of the following:
(a) that any Loan Party is or may be liable to any Person as a result
of a Release or threatened Release which could reasonably be expected to subject
such Loan Party to Environmental Liabilities and Costs of $1,000,000 or more;
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition which could reasonably be expected to result in a violation of or
liability under any Environmental Law, except for violations and liabilities the
consequence of which in the aggregate would have no reasonable likelihood of
subjecting the Loan Parties collectively to Environmental Liabilities and Costs
of $1,000,000 or more;
(d) the commencement of any judicial or administrative proceeding
or investigation alleging a violation of or liability under any Environmental
Law, which in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $1,000,000 or more;
(e) any proposed acquisition of stock, assets or real estate, or any
proposed leasing of property, or any other action by any Loan Party or any of
its Subsidiaries other than those the consequences of which in the aggregate
have reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs of $1,000,000 or more;
69
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws which in the aggregate have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that in the aggregate would cost
$1,000,000 or more or subject the Loan Parties to additional Environmental
Liabilities and Costs of $1,000,000 or more; and
(g) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement.
SECTION 6.11. BORROWING BASE DETERMINATION.
(a) The Borrower shall conduct, or shall cause to be conducted, at its
expense, and upon request of the Administrative Agent, and present to the
Administrative Agent for approval, such appraisals, investigations and reviews
as the Administrative Agent shall request for the purpose of determining the
Borrowing Base, all upon notice and at such times during normal business hours
and as often as may be reasonably requested; PROVIDED, HOWEVER, that for the
purposes of determining the Fixed Asset Amount, such appraisals shall be
obtained in accordance with SECTION 6.11(D). The Borrower shall furnish to the
Administrative Agent any information which the Administrative Agent may
reasonably request regarding the determination and calculation of the Borrowing
Base including correct and complete copies of any invoices, underlying
agreements, instruments or other documents and the identity of all Account
Debtors in respect of Accounts referred to therein.
(b) The Borrower shall promptly notify the Administrative Agent in
writing in the event that at any time the Borrower receives or otherwise gains
knowledge that (i) the Borrowing Base is less than 90% of the Borrowing Base
reflected in the most recent Borrowing Base Certificate delivered pursuant to
SECTION 6.1(H) or that (ii) the outstanding Revolving Credit Outstandings exceed
the Borrowing Base as a result of a decrease therein, and the amount of such
excess.
(c) The Administrative Agent may, at the Borrower's sole cost and
expense, make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that the Administrative Agent
considers advisable, and the Borrower shall furnish all such assistance and
information as the Administrative Agent may require in connection therewith.
(d) For the purposes of determining the Fixed Asset Amount in
effect on the Closing Date, (i) the orderly liquidation value of the Borrower's
Eligible Equipment shall be determined using the valuations set forth in the
appraisal dated July 16, 1999 by MB Valuations and (ii) the Fair Market Value of
the Borrower's Eligible Real Property shall be determined using the valuations
set forth in the appraisal dated July 28, 1999 by ▇▇▇▇▇▇▇ & Wakefield, as
reflected in the Borrowing Base Certificate delivered to the Administrative
Agent prior to the Closing Date. The Fixed Asset Amount shall be adjusted by the
Administrative Agent (A) on the first anniversary of the Closing Date, based
upon revised "desktop" valuations of the Borrower's Eligible Equipment and
Eligible Real Property undertaken by Citicorp's internal auditors and notified
to the Borrower not less than 30 days prior to the first anniversary of the
Closing Date, (B) on the second anniversary of the Closing Date, based upon
third party appraisals from MB Valuations and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (or any other
appraiser reasonably satisfactory to the
70
Administrative Agent) obtained by Citicorp at the Borrower's expense not more
than 90 nor less than 30 days prior to the second anniversary of the Closing
Date, (C) upon any sale of Equipment or Real Property (other than the Excluded
Property), by reducing the Fixed Asset Amount by 75% of the orderly liquidation
value of the Equipment or 50% of the Fair Market Value of the Real Property
which is the subject of any such sale, and (D) by the amount of any reserves
then in effect with respect to such Eligible Equipment and Eligible Real
Property.
SECTION 6.12. OTHER INFORMATION. The Borrower will provide the
Administrative Agent or any Lender with such other information respecting the
business, properties, condition, financial or otherwise, or operations of the
Borrower or any of its Subsidiaries as any Lender through the Administrative
Agent may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
the Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 7.1. PRESERVATION OF CORPORATE EXISTENCE, ETC. The
Borrower shall, and shall cause each of its Subsidiaries to, preserve and
maintain its corporate existence, rights (charter and statutory) and franchises,
except (i) as permitted by SECTIONS 8.3 and 8.4 and (ii) where the failure to do
so could not reasonably be expected to cause a Material Adverse Effect.
SECTION 7.2. COMPLIANCE WITH LAWS, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable Requirements
of Law, Contractual Obligations and Permits, except where the failure so to
comply would not in the aggregate have a Material Adverse Effect.
SECTION 7.3. CONDUCT OF BUSINESS. The Borrower shall, and
shall cause each of its Subsidiaries to, (a) conduct its business consistent
with past practice and (b) use its reasonable efforts, in the ordinary course
and consistent with past practice, to preserve its business and the goodwill and
business of the customers, advertisers, suppliers and others having business
relations with the Borrower or any of its Subsidiaries, except in each case
where the failure to comply with the covenants in each of clauses (a) and (b)
above would not in the aggregate have a Material Adverse Effect.
SECTION 7.4. PAYMENT OF TAXES, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, pay and discharge before the same shall
become delinquent, all lawful governmental claims, taxes, assessments, charges
and levies, except where contested in good faith, by proper proceedings and
adequate reserves therefor have been established on the books of the Borrower or
the appropriate Subsidiary in conformity with GAAP.
SECTION 7.5. MAINTENANCE OF INSURANCE. The Borrower shall (i)
maintain, and cause to be maintained for each of its Subsidiaries insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried
71
by companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates, and such
other insurance as may be reasonably requested by the Requisite Lenders, and, in
any event, all insurance required by any Collateral Documents and (ii) cause all
such insurance to name the Administrative Agent on behalf of the Secured Parties
as additional insured or loss payee, as appropriate, and to provide that no
cancellation, material addition in amount or material change in coverage shall
be effective until after 30 days' written notice thereof to the Administrative
Agent.
SECTION 7.6. ACCESS. The Borrower shall from time to time
permit the Administrative Agent and the Lenders, or any agents or
representatives thereof, within two Business Days after written notification of
the same (except that during the continuance of an Event of Default, no such
notice shall be required) to (a) examine and make copies of and abstracts from
the records and books of account of the Borrower and each of its Subsidiaries,
(b) visit the properties of the Borrower and each of its Subsidiaries, (c)
discuss the affairs, finances and accounts of the Borrower and each of its
Subsidiaries with any of their respective officers or directors, and (d)
communicate directly with the Borrower's independent certified public
accountants. The Borrower shall authorize its independent certified public
accountants to disclose to the Administrative Agent or any Lender any and all
financial statements and other information of any kind, as the Administrative
Agent or any Lender reasonably requests from the Borrower and which such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of the Borrower or any of its Subsidiaries.
SECTION 7.7. KEEPING OF BOOKS. The Borrower shall, and shall
cause each of its Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made in conformity with GAAP of all
financial transactions and the assets and business of the Borrower and each such
Subsidiary.
SECTION 7.8. MAINTENANCE OF PROPERTIES, ETC. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain and preserve, (a) all of
its properties which are necessary in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, (b) all rights,
permits, licenses, approvals and privileges (including all Permits) which are
used or useful or necessary in the conduct of its business, and (c) all
registered patents, trademarks, trade names, copyrights and service marks with
respect to its business; except in each case where the failure to so maintain
and preserve would not in the aggregate have a Material Adverse Effect.
SECTION 7.9. APPLICATION OF PROCEEDS. The Borrower shall use the
entire amount of the proceeds of the Loans as provided in SECTION 4.13.
SECTION 7.10. ENVIRONMENTAL. The Borrower shall, and shall cause any
Subsidiary to comply in all material respects with Environmental Laws and,
without limiting the foregoing, the Borrower shall, at its sole cost and
expense, upon receipt of any notification or otherwise obtaining knowledge of
any Release or other event that has any reasonable likelihood of the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000, (a) conduct or pay for consultants to conduct, tests or assessments
of environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (b) take such Remedial
Action, investigational or other action as required by Environmental Laws or as
any Governmental Authority requires or as is appropriate and consistent with
good business practice to address the Release or event.
72
SECTION 7.11. ADDITIONAL COLLATERAL AND GUARANTIES. To the extent
not delivered to the Administrative Agent on or before the Closing Date, the
Borrower agrees promptly to (i) execute and deliver to the Administrative Agent
such amendments to the Collateral Documents as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Stock and Stock Equivalents and other debt Securities of any Material
Subsidiary which are owned by the Borrower or any of its Subsidiaries and
requested to be pledged by the Administrative Agent; PROVIDED, HOWEVER, that in
no event shall the Borrower or any of its Subsidiaries be required to pledge in
excess of 65% of the outstanding Stock of any Material Subsidiary that is not a
Domestic Subsidiary, (ii) deliver to the Administrative Agent the certificates
(if any) representing such Stock and Stock Equivalents and other debt
Securities, together with (A) in the case of such certificated Stock and Stock
Equivalents, undated stock powers endorsed in blank, and (B) in the case of such
certificated debt Securities, endorsed in blank, in each case executed and
delivered by a Responsible Officer of the Borrower or such Subsidiary, as the
case may be, (iii) in the case of any such Material Subsidiary that is a
Domestic Subsidiary cause such new Material Subsidiary (A) to become a party to
the Guaranty and the applicable Collateral Documents and (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Secured Parties a perfected security interest in the Collateral
described in the Collateral Documents with respect to such new Material
Subsidiary, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Collateral Documents or by law
or as may be reasonably requested by the Administrative Agent and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Agent.
SECTION 7.12. CONCENTRATION ACCOUNT AND CASH MANAGEMENT SYSTEM.
(a) The Borrower has established the following cash concentration
account with Citibank in New York, New York:
ACCOUNT NO. ACCOUNT TITLE
▇▇▇▇▇▇▇▇ Paragon Trade Brands Concentration
Account (the "CONCENTRATION ACCOUNT")
(b) The Administrative Agent shall possess sole dominion and control
over the Concentration Account. As long as there are any Revolving Credit
Outstandings or all of the Revolving Credit Commitments have not been
terminated, neither the Borrower nor any Person or entity claiming by, through
or under the Borrower shall have any control over the use of the Concentration
Account.
(c) The Borrower shall instruct its Account Debtors to mail their
remittances to a Blocked Account and the Borrower agrees to take all steps
necessary or desirable, in the Administrative Agent's sole discretion exercised
reasonably, to cause its Account Debtors to mail their remittances to such
Blocked Account. The Borrower shall mail to the Blocked Account any remittances
received directly by it as soon as possible (but in any event no later than the
Business Day immediately following receipt).
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(d) Each Blocked Account Letter shall provide (i) for all funds
received by the Borrower to be deposited in a Blocked Account covered by a
Blocked Account Letter and (ii) daily deposit of remittances received in any
lockboxes to the Blocked Account.
(e) On any day on which the aggregate Revolving Credit Outstandings
exceed 50% of the lesser of (i) $95,000,000 and (ii) the Available Credit (such
event being a "CASH SWEEP EVENT"), the Administrative Agent shall immediately
notify each Blocked Account Bank by sending a notice in the form attached as
ANNEX A to the Blocked Account Letter. Upon receipt of such notice and on a
daily basis thereafter until otherwise notified by the Administrative Agent, all
available funds in the Concentration Account shall be applied in the manner set
forth in Section 2.9(D). Notwithstanding anything to the contrary contained
herein, all cash and Cash Equivalents of the Borrower in excess of $2,000,000
shall be deposited in the Cash Collateral Account.
SECTION 7.13. REAL PROPERTY.
(a) The Borrower shall, within 30 days after the Closing Date (or
such later date as shall be acceptable to the Administrative Agent in its sole
discretion) deliver such Landlord Lien Waivers and Bailee's Waivers as the
Administrative Agent shall request in its sole discretion exercised reasonably.
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
(i) comply in all respects with all of their respective obligations under all of
their respective Leases now or hereafter held respectively by them with respect
to Real Property, including the Leases set forth in SCHEDULE 4.19, except where
the failure to do so would not in the aggregate result in a Material Adverse
Effect; (ii) not modify, amend, cancel, extend or otherwise change in any
materially adverse manner any of the terms, covenants or conditions of any such
Leases, except where such action would not result in a Material Adverse Effect;
(iii) not assign or sublet any other Lease if such assignment or sublet would
have a Material Adverse Effect; (iv) provide the Administrative Agent with a
copy of each notice of default under any Lease received by the Borrower or any
Subsidiary of the Borrower immediately upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary of the Borrower under any Lease simultaneously with its delivery
of such notice under such Lease; and (v) notify the Administrative Agent at
least 14 days prior to the date the Borrower or any Subsidiary takes possession
of, or becomes liable under, any new leased premises or Lease, whichever is
earlier.
(c) If, at any time, the Borrower or any of its Subsidiaries acquires
a fee interest in any Real Property not covered by a mortgage, the Borrower or
such Subsidiary promptly shall execute, deliver and record a first priority
Mortgage in favor of the Administrative Agent on behalf and for the ratable
benefit of the Secured Parties covering such Real Property (subordinate only to
such Liens as are permitted hereunder), in form and substance satisfactory to
the Administrative Agent, and provide the Administrative Agent with a
Mortgagee's Title Insurance Policy covering such Real Property in an amount
equal to the purchase price of such Real Property, a current ALTA survey thereof
and a surveyor's certificate in form and substance satisfactory to the
Administrative Agent and such other information reasonably requested by the
Administrative Agent.
(d) At least fifteen (15) Business Days prior to entering into any
Lease (other than a renewal of an existing Lease) for the principal place of
business and chief executive office of the Borrower or any other Subsidiary
Guarantor or any other Lease (including any renewal) in
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which the annual rental payments are anticipated to equal or exceed $1,500,000,
at the request of the Administrative Agent the Borrower shall, and shall cause
such Subsidiary Guarantor to, execute and deliver to the Administrative Agent,
for the benefit of the Secured Parties, immediately upon the acquisition of any
such Lease, a mortgage, deed of trust, assignment or other appropriate
instrument evidencing a Lien upon any such Lease, together with such title
policies, certified surveys, and local counsel opinions with respect thereto and
such other agreements, documents and instruments which the Administrative Agent
deems necessary or desirable, the same to be in form and substance satisfactory
to the Administrative Agent and to be subject only to (i) Liens permitted under
SECTION 8.2 and (ii) such other Liens as the Administrative Agent may reasonably
approve.
ARTICLE VIII
NEGATIVE COVENANTS
As long as there are any Revolving Credit Outstandings or the
Revolving Credit Commitments remain outstanding, without the written consent of
the Requisite Lenders, the Borrower agrees with the Lenders and the
Administrative Agent that:
SECTION 8.1. INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date of this Agreement and disclosed
on SCHEDULE 8.1;
(c) Guaranty Obligations incurred by the Borrower or any Subsidiary
Guarantor in respect of Indebtedness of the Borrower or any Subsidiary Guarantor
otherwise permitted by this SECTION 8.1;
(d) Capital Lease Obligations and purchase money Indebtedness incurred
by the Borrower or a Subsidiary of the Borrower to finance the acquisition of
fixed assets in an aggregate outstanding principal amount not to exceed
$20,000,000 at any time; PROVIDED, HOWEVER, that the Capital Expenditure related
thereto is otherwise permitted by SECTION 5.5;
(e) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by CLAUSES (B), (D) OR (J) of this SECTION 8.1; PROVIDED, HOWEVER,
that any such renewal extension, refinancing or refunding is in an aggregate
principal amount not greater than the principal amount of, and is on material
terms no less favorable to the Borrower or such Subsidiary, including as to
weighted average maturity, than the Indebtedness being renewed, extended,
refinanced or refunded;
(f) Indebtedness arising from intercompany loans (i) from the Borrower
to any Subsidiary Guarantor or from any Subsidiary Guarantor to the Borrower or
any other Subsidiary Guarantor or from any Subsidiary to the Borrower or any
Subsidiary Guarantor and (ii) from the Borrower or any Subsidiary Guarantor to
any Subsidiary of the Borrower that is not a Subsidiary Guarantor; PROVIDED,
HOWEVER, that the Investment in the intercompany loan to such Subsidiary is
permitted under SECTION 8.3;
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(g) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
(h) Indebtedness in respect of the Senior Subordinated Notes in a
aggregate principal amount not in excess of $146,000,000 plus the aggregate
principal amount of any Secondary Securities issued by the Borrower under the
Senior Subordinated Note Indenture pursuant to the provisions of SECTION 2.11
thereof.
(i) Obligations under Interest Rate Contracts required by SECTION
7.12; and
(j) unsecured Indebtedness not otherwise permitted under this SECTION
8.1 in an aggregate outstanding principal amount not to exceed $15,000,000 at
any time.
SECTION 8.2. LIENS, ETC. The Borrower will not, and will not
permit any of its Subsidiaries to, create or suffer to exist, any Lien upon or
with respect to any of its properties or assets, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on
SCHEDULE 8.2;
(c) Customary Permitted Liens of the Borrower and its Subsidiaries;
(d) purchase money Liens granted by the Borrower or any Subsidiary
of the Borrower (including the interest of a lessor under a Capital Lease and
Liens to which any property is subject at the time of the Borrower's or such
Subsidiary's acquisition thereof) securing Indebtedness permitted under SECTION
8.1(d) and limited in each case to the property purchased with the proceeds of
such purchase money Indebtedness or subject to such Capital Lease;
(e) any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by CLAUSES (B), (D), (E) or
(G) of this SECTION 8.2 without any change in the assets subject to such Lien;
(f) Liens in favor of lessors securing operating leases; and
(g) Liens not otherwise permitted by the foregoing clauses of this
SECTION 8.2 securing obligations or other liabilities (other than Indebtedness)
of any Loan Party; PROVIDED, however, that the aggregate outstanding amount of
such obligations and liabilities secured by such Liens shall not exceed
$2,000,000 at any time.
SECTION 8.3. INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly make or maintain any
Investment except:
(a) Investments existing on the date of this Agreement and disclosed
on SCHEDULE 8.3;
(b) Investments in cash and Cash Equivalents held (i) in the Cash
Collateral Account or in any other accounts maintained by the Borrower and the
Subsidiary Guarantors in
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an aggregate principal amount (for all accounts other than the Cash Collateral
Account) not to exceed $2,000,000 or (ii) a securities account with respect to
which the Administrative Agent for the benefit of the Secured Parties has a
first priority perfected Lien;
(c) Investments in accounts, contract rights and chattel paper (each
as defined in the Uniform Commercial Code), notes receivable and similar items
arising or acquired in the ordinary course of business consistent with the past
practice of the Borrower and its Subsidiaries;
(d) Investments received in settlement of amounts due to the Borrower
or any Subsidiary of the Borrower effected in the ordinary course of business;
(e) Investments by (i) the Borrower in any Subsidiary Guarantor,
or by any Subsidiary Guarantor in the Borrower or any other Subsidiary
Guarantor, and (ii) a Subsidiary that is not a Subsidiary Guarantor in the
Borrower or any other Subsidiary, PROVIDED, HOWEVER, that no Investments shall
be made by the Borrower or any other Subsidiary in PTB Holdings, Inc.;
(f) loans or advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business, which loans and advances shall
not exceed the aggregate outstanding principal amount of $2,000,000 at any time;
(g) Investments made after the Closing Date pursuant to the exercise
of the Mabesa Option; PROVIDED, HOWEVER, that immediately prior to and after
giving effect thereto (i) no Default or Event of Default shall have occurred and
be continuing, (ii) the Borrower shall be in pro forma compliance with the
financial covenants specified in ARTICLE V of this Agreement (and the
Administrative Agent shall have received a certificate of the Chief Financial
Officer of the Borrower at least 10 Business Days prior to making any such
Investment demonstrating such pro forma compliance), (iii) the Available Credit
shall equal or exceed $25,000,000 and (iv) the Borrower's accounts and trade
payables shall be current in accordance with its usual business practices; and
(h) Investments not otherwise permitted hereby in an aggregate
outstanding amount not to exceed $25,000,000 at any time; PROVIDED, HOWEVER,
that immediately prior to and after making any such investment in excess of
$5,000,000 (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Borrower shall be in pro forma compliance with the
financial covenants specified in ARTICLE V of this Agreement (and the
Administrative Agent shall have received a certificate of the Chief Financial
Officer of the Borrower at least five days prior to making any such Investment
demonstrating such pro forma compliance).
SECTION 8.4. SALE OF ASSETS. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, convey, transfer, lease or otherwise
dispose of, any of its assets or any interest therein (including the sale or
factoring at maturity or collection of any accounts) to any Person, or permit or
suffer any other Person to acquire any interest in any of its assets or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary's Stock or
Stock Equivalent (any such disposition being an "ASSET SALE"), except:
(a) the sale or disposition of inventory in the ordinary course of
business;
(b) the sale or disposition of equipment which has become obsolete
or are replaced in the ordinary course of business; PROVIDED, HOWEVER, that (i)
the aggregate Fair Market
77
Value of all such equipment disposed of in any Fiscal Year shall not exceed
$1,500,000 and (ii) following any such disposition, the Fixed Asset Amount shall
be adjusted to the extent required by SECTION 6.11(D);
(c) the lease or sublease of real property not constituting a sale and
leaseback, to the extent not otherwise prohibited by this Agreement;
(d) assignments and licenses of intellectual property of the Borrower
and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or any Subsidiary Guarantor (other
than to PTB Holdings Inc.);
(f) the sale of (i) the Borrower's manufacturing facility located in
Brampton, Ontario and (ii) the Borrower's tampon manufacturing equipment line
(the "Excluded Property");
(g) as long as no Default or Event of Default is continuing or would
result therefrom, any other Asset Sale for its Fair Market Value thereof,
payable in cash upon such sale; PROVIDED, HOWEVER, that with respect to any such
sale pursuant to this CLAUSE (G), (i) the aggregate consideration received for
the sale of all assets sold during any Fiscal Year shall not exceed $5,000,000
and (ii)following any such disposition, the Fixed Asset Amount shall be adjusted
to the extent required by SECTION 6.11(D); and
(h) the sale of all or a portion of the Borrower's equity in Mabesa
or all or a portion of the Mabesa Option, in each case concurrently with the
exercise of the Mabesa Option.
SECTION 8.5. RESTRICTED PAYMENTS. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, declare, order,
pay, make or set apart any sum for any Restricted Payment, except (i) Restricted
Payments by any Subsidiary of the Borrower to the Borrower or any Subsidiary
Guarantor and by the Borrower to any Subsidiary Guarantor and (ii) the
repurchase, redemption or other acquisition or retirement for value of any Stock
or Stock Equivalents held by any member of the Borrower's management or Board of
Directors pursuant to any management or directors' equity subscription agreement
or stock option agreement.
SECTION 8.6. RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower will
not, and will not permit any of its Subsidiaries to (a) merge with any Person,
(b) consolidate with any Person, (c) except in connection with an investment
permitted by Section 8.3, acquire all or substantially all of the Stock or Stock
Equivalents of any Person, (d) except in connection with an investment permitted
by Section 8.3, acquire all or substantially all of the assets of any Person or
all or substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person, (e) except in connection with any
Investment permitted by SECTION 8.3, enter into any joint venture or partnership
with any Person or (f) acquire or create any Subsidiary unless, after giving
effect thereto, the Borrower is in compliance with SECTION 7.11; PROVIDED,
HOWEVER, that the provisions of this Section 8.6 shall not apply to (i) any
transfer of the assets of a Subsidiary to the Borrower or another Subsidiary
Guarantor (other than to PTB Holdings Inc.), or (ii) any merger of a Subsidiary
Guarantor into the Borrower, or (iii) any merger of any Subsidiary into the
Borrower or any Subsidiary Guarantor.
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SECTION 8.7. CHANGE IN NATURE OF BUSINESS. The Borrower will not,
and will not permit any of its Subsidiaries to, make any material change in the
nature or conduct of its business as carried on at the date hereof.
SECTION 8.8. TRANSACTIONS WITH AFFILIATES. The Borrower will not,
and will not permit any of its Subsidiaries to, except as otherwise expressly
permitted herein, do any of the following: (a) make any Investment in an
Affiliate of the Borrower which is not a Subsidiary of the Borrower except as
permitted by SECTION 8.3; (b) transfer, sell, lease, assign or otherwise dispose
of any asset to any Affiliate of the Borrower which is not a Subsidiary of the
Borrower; (c) merge into or consolidate with or purchase or acquire assets from
any Affiliate of the Borrower which is not a Subsidiary of the Borrower; (d)
repay any Indebtedness to any Affiliate of the Borrower which is not a
Subsidiary of the Borrower; or (e) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate of the Borrower which is not
a Subsidiary Guarantor (including guaranties and assumptions of obligations of
any such Affiliate), except for (i) transactions in the ordinary course of
business on a basis no less favorable to the Borrower or such Subsidiary
Guarantor than those that could be obtained at the time of such transaction in
arm's length dealings with a Person who is not such an Affiliate, (ii) salaries
and other employee compensation to officers or directors of the Borrower or any
of its Subsidiaries commensurate with current compensation levels, (iii)
transactions contemplated by Existing Foreign Joint Venture Agreements, the
Option Agreement and the Warrant Agreement (as such agreements are in effect on
the Closing Date) to the extent such payments are otherwise permitted under the
Loan Documents and (iv) between the Borrower or any Subsidiary, on the one hand,
and each of The Procter & ▇▇▇▇▇▇ Company and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation, on the
other, relating to technology licenses.
SECTION 8.9. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS; NO NEW
NEGATIVE PLEDGE. Other than pursuant to the Loan Documents and the Senior
Subordinated Note Indenture and any agreements governing any purchase money
Indebtedness or Capital Lease Obligations permitted by clause (B), (D), (E) or
(J) of SECTION 8.1 (in which latter case, any prohibition or limitation shall
only be effective against the assets financed thereby), the Borrower will not,
and will not permit any of its Subsidiaries to, (a) agree to enter into or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of such Subsidiary to pay dividends or make any other
distribution or transfer of funds or assets or make loans or advances to or
other Investments in, or pay any Indebtedness owed to, the Borrower or any other
Subsidiary of the Borrower or (b) enter into or suffer to exist or become
effective any agreement which prohibits or limits the ability of the Borrower or
any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, to
secure the Obligations, including any agreement which requires other
Indebtedness or Contractual Obligation to be equally and ratably secured with
the Obligations.
SECTION 8.10. MODIFICATION OF CONSTITUENT DOCUMENTS. The Borrower
will not, and will not permit any of its Subsidiaries to, change its capital
structure (including in the terms of its outstanding Stock) or otherwise amend
its Constituent Documents, except for changes and amendments which do not
materially and adversely affect the rights and privileges of the Borrower or any
of its Subsidiaries, or the interests of the Administrative Agent, the Lenders
and the Issuers under the Loan Documents or in the Collateral.
SECTION 8.11. MODIFICATION OF RELATED DOCUMENTS. The Borrower
will not, and will not permit any of its Subsidiaries to, (a) alter, rescind,
terminate, amend, supplement,
79
waive or otherwise modify any provision of any Related Document (other than the
Senior Subordinated Notes, the Senior Subordinated Note Indenture or any
agreement entered into in connection therewith) or (b) permit any breach or
default to exist under any Related Document or take or fail to take any action
thereunder, if (in each case) to do so would have a Material Adverse Effect.
SECTION 8.12. MODIFICATION OF SENIOR SUBORDINATED NOTES; The
Borrower will not, and will not permit any of its Subsidiaries to, change or
amend the terms of the Senior Subordinated Notes, the Senior Subordinated Note
Indenture or any agreement entered into in connection therewith) if the effect
of such amendment is to: (a) increase the interest rate on such Senior
Subordinated Notes; (b) change the dates upon which payments of principal or
interest are due on such Senior Subordinated Notes other than to extend such
dates; (c) amend any provisions thereof describing default or event of default
other than to delete or make less restrictive any default provision therein, or
add any covenant with respect to such Senior Subordinated Notes; (d) change the
redemption or prepayment provisions of such Senior Subordinated Notes other than
to extend the dates therefor or to reduce the premiums payable in connection
therewith; or (e) change or amend any other term if such change or amendment
could reasonably be expected to have a Material Adverse Effect.
SECTION 8.13. ACCOUNTING CHANGES; FISCAL YEAR. The Borrower will
not, and will not permit any of its Subsidiaries to, change its (a) accounting
treatment and reporting practices or tax reporting treatment, except as required
by GAAP or any Requirement of Law and disclosed to the Lenders and the
Administrative Agent or (b) Fiscal Year.
SECTION 8.14. MARGIN REGULATIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, use all or any portion of the
proceeds of any credit extended hereunder to purchase or carry Margin Stock.
SECTION 8.15. OPERATING LEASES; SALE/LEASEBACKS.
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, become or remain liable as lessee or guarantor or other surety with respect
to any operating lease, unless that aggregate amount of all rents paid or
accrued under all such operating leases shall not exceed $3,000,000 in any
Fiscal Year.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any sale and leaseback transaction covering any property with an
aggregate Fair Market Value in excess of $2,000,000.
SECTION 8.16. CANCELLATION OF INDEBTEDNESS OWED TO IT. The
Borrower will not, and will not permit any of its Subsidiaries to, cancel any
claim or Indebtedness owed to it except in the ordinary course of business
consistent with past practice (other than any such cancellation of Indebtedness
or claims among the Borrower and the Subsidiary Guarantors or among the
Subsidiary Guarantors).
SECTION 8.17. NO SPECULATIVE TRANSACTIONS. The Borrower will
not, and will not permit any of its Subsidiaries to, engage in any speculative
transaction or in any transaction involving Hedging Contracts except for the
sole purpose of hedging in the normal course of business and consistent with
industry practices.
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SECTION 8.18. COMPLIANCE WITH ERISA. The Borrower will not, and
will not permit any of its Subsidiaries to, or cause or permit any ERISA
Affiliate to, cause or permit to occur (a) an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (b) an ERISA Event that would have a Material Adverse Effect.
SECTION 8.19. ENVIRONMENTAL. The Borrower will not, and will not
permit any of its Subsidiaries to, allow a Release of any Contaminant in
violation of any Environmental Law; PROVIDED, HOWEVER, that the Borrower shall
not be deemed in violation of this SECTION 8.19 if, as the consequence of all
such Releases, such Loan Party would not incur Environmental Liabilities and
Costs in excess of $1,000,000 in the aggregate.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. EVENTS OF DEFAULT. Each of the following events shall
be an Event of Default:
(a) The Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation when the same becomes due and payable; or
(b) The Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of three
Business Days after the due date therefor;
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in ARTICLE V, SECTION 6.1, 6.2, 7.1, 7.6, 7.11,
7.12, or 7.13 or ARTICLE VIII, or (ii) any other term, covenant or agreement
contained in this Agreement or in any other Loan Document if such failure under
this clause (ii) shall remain unremedied for 30 days after the earlier of the
date on which (A) a Responsible Officer of the Borrower becomes aware of such
failure or (B) written notice thereof shall have been given to the Borrower by
the Administrative Agent or any Lender; or
e) (i) the Borrower or any of its ubsidiaries shall fail to make any
payment on any Indebtedness (other than the Obligations) of the Borrower or any
such Subsidiary (or any Guaranty Obligation in respect of Indebtedness of any
other Person) having a principal amount of $1,000,000 or more, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or (iii) any such
Indebtedness shall become or be declared to be due and payable, or required to
be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
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(f) the Borrower or any of the Subsidiary Guarantors shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against the
Borrower or any of the Subsidiary Guarantor seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceedings instituted against the
Borrower or any of the Subsidiary Guarantors (but not instituted by it), either
such proceedings shall remain undismissed or unstayed for a period of 30 days or
any of the actions sought in such proceedings shall occur; or the Borrower or
any of the Subsidiary Guarantors shall take any corporate action to authorize
any of the actions set forth above in this SUBSECTION (F); or
(g) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$1,000,000 in the case of a money judgment, to the extent not covered by
insurance, shall be rendered against one or more of the Borrower and its
Subsidiaries; or
(h) an ERISA Event shall occur and the amount of all liabilities
and deficiencies resulting therefrom, whether or not assessed, exceeds
$1,000,000 in the aggregate; (i) any provision of any Collateral Document or any
Guaranty after delivery thereof pursuant to this Agreement or any other Loan
Document shall for any reason cease to be valid and binding, or enforceable
against, on any Loan Party party thereto, or any Loan Party shall so state in
writing; or
(j) any Collateral Document shall for any reason cease to create
a valid Lien on any of the Collateral purported to be covered thereby or except
as permitted by the Loan Documents, such Lien shall cease to be a perfected and
first priority Lien or any Loan Party shall so state in writing; or
(k) there shall occur any Change of Control; or
(l) there shall occur a Material Adverse Change; or
(m) one or more of the Borrower and its Subsidiaries shall have
entered into one or more consent or settlement decrees or agreements or similar
arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against one or more of the
Borrower and its Subsidiaries based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and its Subsidiaries are likely to incur
Environmental Liabilities and Costs in excess of $1,000,000 in the aggregate
that were not reflected in the Projections or the Financial Statements delivered
pursuant to SECTION 4.4; or
(n) the Plan of Reorganization shall have been amended or modified
in any material respect after the Closing Date without the prior written consent
of the Requisite Lenders; or
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(o) the Borrower shall fail to satisfy the conditions set forth in
Section 3.3 within 60 days following the Closing Date.
SECTION 9.2. REMEDIES. During the continuance of any Event of
Default, the Administrative Agent (a) may, and shall at the request of the
Requisite Lenders, by notice to the Borrower declare that all or any portion of
the Revolving Credit Commitments be terminated, whereupon the obligation of each
Lender to make any Loan and each Issuer to issue any Letter of Credit shall
immediately terminate, and/or (b) may and shall at the request of the Requisite
Lenders, by notice to the Borrower, declare the Loans, all interest thereon and
all other amounts and Obligations payable under this Agreement to be forthwith
due and payable, whereupon the Loans, all such interest and all such amounts and
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; PROVIDED, HOWEVER, that upon the occurrence of the Event
of Default specified in subparagraph (d) above, (i) the Revolving Credit
Commitments of each Lender to make Loans and of each Lender and Issuer to issue
or participate in Letters of Credit shall automatically be terminated and (ii)
the Loans, all such interest and all such amounts and Obligations shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. In addition to the remedies set forth above, the Administrative
Agent may exercise any remedies provided for by the Collateral Documents in
accordance with the terms thereof or any other remedies provided by applicable
law.
SECTION 9.3. ACTIONS IN RESPECT OF LETTERS OF CREDIT. Upon the
Revolving Credit Termination Date, the Borrower shall pay to the Administrative
Agent in immediately available funds at the Administrative Agent's office
referred to in SECTION 12.3, for deposit in the Cash Collateral Account, an
amount equal to 105% of the sum of all outstanding Letter of Credit Obligations.
The Administrative Agent may, from time to time after funds are deposited in the
Cash Collateral Account, apply funds then held in the Cash Collateral Account to
the payment of any amounts, in accordance with SECTION 2.13(F), as shall have
become or shall become due and payable by the Borrower to the Issuers or Lenders
in respect of the Letter of Credit Obligations. The Administrative Agent shall
promptly give written notice of any such application; PROVIDED, HOWEVER, that
the failure to give such written notice shall not invalidate any such
application. Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations.
SECTION 9.4. RESCISSION. If at any time after termination of
the Revolving Credit Commitments and/or acceleration of the maturity of the
Loans, the Borrower shall pay all arrears of interest and all payments on
account of principal of the Loans and Reimbursement Obligations which shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified herein)
and all Events of Default and Defaults (other than non-payment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to SECTION 11.1, then upon
the written consent of the Requisite Lenders and written notice to the Borrower,
the termination of the Revolving Credit Commitments and/or the acceleration and
their consequences may be rescinded and annulled; but such action shall not
affect any subsequent Event of Default or Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended merely
to bind the Lenders and
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the Issuers to a decision which may be made at the election of the Requisite
Lenders; they are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1. AUTHORIZATION AND ACTION.
(a) Each Lender and each Issuer hereby appoints Citicorp as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents.
(b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; PROVIDED, HOWEVER, that the Administrative Agent shall not be
required to take any action which (i) the Administrative Agent in good faith
believes exposes it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or (ii) is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Lender and each Issuer
prompt notice of each notice given to it by any Loan Party pursuant to the terms
of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under
the Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers and its duties are entirely administrative in nature.
The Administrative Agent does not assume and shall not be deemed to have assumed
any obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or for
any Lender, Issuer or holder of any other Obligation. The Administrative Agent
may perform any of its duties under any of the Loan Documents by or through its
agents or employees.
SECTION 10.2. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any such
Affiliate shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement or the other Loan
Documents, except for its, his, her or their own gross negligence or willful
misconduct. Without limiting the foregoing, the Administrative Agent (a) may
treat the payee of any Revolving Credit Note as its holder until such Revolving
Credit Note has been assigned in accordance with SECTION 11.2; (b) may rely on
the Register to the extent set forth in SECTION
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11.2(C); (c) may consult with legal counsel (including counsel to the Borrower
or any other Loan Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (d) makes no warranty or representation to any Lender or
Issuer and shall not be responsible to any Lender or Issuer for any statements,
warranties or representations made by or on behalf of the Borrower or any of its
Subsidiaries in or in connection with this Agreement or any of the other Loan
Documents; (e) shall not have any duty to ascertain or to inquire either as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or any of the other Loan Documents or the financial condition of
any Loan Party, or the existence or possible existence of any Default or Event
of Default; (f) shall not be responsible to any Lender or Issuer for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (g) shall incur no liability
under or in respect of this Agreement or any of the other Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy) or any telephone message believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 10.3. THE ADMINISTRATIVE AGENT INDIVIDUALLY With respect to
its Ratable Portion, Citicorp shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms "LENDERS" or
"REQUISITE LENDERS" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual capacity
as a Lender or as one of the Requisite Lenders. Citicorp and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Loan Party as if it were not acting as
the Administrative Agent.
SECTION 10.4. LENDER CREDIT DECISION. Each Lender and each Issuer
acknowledges that it shall, independently and without reliance upon the
Administrative Agent or any other Lender conduct its own independent
investigation of the financial condition and affairs of the Borrower and each
other Loan Party in connection with the making and continuance of the Loans and
with the issuance of the Letters of Credit. Each Lender and each Issuer also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
SECTION 10.5. INDEMNIFICATION. Each Lender agrees to indemnify
the Administrative Agent and each of its Affiliates, and each of their
respective directors, officers, employees, agents and advisors (to the extent
not reimbursed by the Borrower), from and against such Lender's aggregate
Ratable Portion of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements
(including fees and disbursements of legal counsel) of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against, the
Administrative Agent or any of its Affiliates, directors, officers, employees,
agents and advisors in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Administrative
Agent under this Agreement or the other Loan Documents; PROVIDED, HOWEVER, that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's or such Affiliate's
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gross negligence or willful misconduct. Without limiting the foregoing, each
Lender agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including fees and disbursements of
legal counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of its rights or responsibilities under, this
Agreement or the other Loan Documents, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrower or another Loan Party.
SECTION 10.6. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Requisite Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, selected from among the Lenders. In either case, such
appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. Prior to any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the retiring Administrative Agent shall take such action
as may be reasonably necessary to assign to the Successor Administrative Agent
its rights as Administrative Agent under the Loan Documents. After such
resignation, the retiring Administrative Agent shall continue to have the
benefit of this ARTICLE X as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
SECTION 10.7. CONCERNING THE COLLATERAL AND THE COLLATERAL DOCUMENTS.
(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders, Issuers and other Secured
Parties. Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection herewith and with the
Collateral Documents; (ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the Borrower or any of its
Subsidiaries; (iii) act as collateral agent for the Lenders, the Issuers and the
other Secured Parties for purposes of the perfection of all security interests
and Liens created by such agreements and all other purposes stated therein;
PROVIDED, HOWEVER, that the Administrative Agent hereby appoints, authorizes and
directs each Lender and Issuer to act as collateral sub-agent for the
Administrative Agent, the Lenders and the Issuers for purposes of the perfection
of all security interests and Liens with respect to the
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Borrower's and its Subsidiaries' respective deposit accounts maintained with,
and cash and Cash Equivalents held by, such Lender or such Issuer; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and Liens created or purported to be created by the Collateral
Documents; and (vi) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to the
Administrative Agent, the Lenders, the Issuers and the other Secured Parties
with respect to the Collateral under the Loan Documents relating thereto,
applicable law or otherwise.
(b) Each of the Lenders and the Issuers hereby directs, in accordance
with the terms hereof, the Administrative Agent to release (or, in the case of
clause (ii) below, release or subordinate) any Lien held by the Administrative
Agent for the benefit of the Lenders and the Issuers:
(i) against all of the Collateral, upon termination
of the Revolving Credit Commitments and payment and
satisfaction in full of all Loans, Reimbursement Obligations
and all other Obligations which have matured and which the
Administrative Agent has been notified in writing are then due
and payable (and, in respect of contingent Letter of Credit
Obligations, with respect to which cash collateral has been
deposited or a back-up letter of credit has been issued, in
either case on terms satisfactory to the Administrative Agent
and the applicable Issuers);
(ii) against any assets that are subject to a Lien
permitted by SECTION 8.2(D) or (E); and
(iii) against any part of the Collateral sold or
disposed of by a Loan Party if such sale or disposition is
permitted by this Agreement (or permitted pursuant to a waiver
or consent of a transaction otherwise prohibited by this
Agreement) or, if not pursuant to such sale or disposition,
against Collateral with a book value of up to $5,000,000, if
such release is consented to by the Requisite Lenders, or any
part of the Collateral in excess of such amount, if such
release is consented to by all the Lenders.
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this SECTION 10.7 promptly upon the effectiveness of any such release.
SECTION 10.8. COLLATERAL MATTERS RELATING TO RELATED OBLIGATIONS.
The benefit of the Loan Documents and of the provisions of this Agreement
relating to the Collateral shall extend to and be available in respect of any
Secured Obligation which arises under any Hedging Contract or which is otherwise
owed to Persons other than the Administrative Agent, the Lenders and the Issuers
(collectively, "RELATED OBLIGATIONS") solely on the condition and understanding,
as among the Administrative Agent and all Secured Parties, that (i) the Related
Obligations shall be entitled to the benefit of the Loan Documents and the
Collateral to the extent expressly set forth in this Agreement and the other
Loan Documents and to such extent the Administrative Agent shall hold, and have
the right and power to act with respect to, the Guaranty and the Collateral on
behalf of and as agent for the holders of the Related Obligations, but the
Administrative Agent is otherwise acting solely as agent for the Lenders and the
Issuers and shall
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have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure or
other obligation whatsoever to any holder of Related Obligations; (ii) all
matters, acts and omissions relating in any manner to the Guaranty, the
Collateral, or the omission, creation, perfection, priority, abandonment or
release of any Lien, shall be governed solely by the provisions of this
Agreement and the other Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Secured Party under any separate
instrument or agreement or in respect of any Related Obligation; and (iii) each
Secured Party shall be bound by all actions taken or omitted, in accordance with
the provisions of this Agreement and the other Loan Documents, by the
Administrative Agent and the Requisite Lenders, each of whom shall be entitled
to act at its sole discretion and exclusively in its own interest given its own
Revolving Credit Commitments and its own interest in the Loans, Letter of Credit
Obligations and other Obligations to it arising under this Agreement or the
other Loan Documents, without any duty or liability to any other Secured Party
or as to any Related Obligation and without regard to whether any Related
Obligation remains outstanding or is deprived of the benefit of the Collateral
or becomes unsecured or is otherwise affected or put in jeopardy thereby; and
(iv) no holder of Related Obligations and no other Secured Party (except the
Administrative Agent, the Lenders and the Issuers, to the extent set forth in
this Agreement) shall have any right to be notified of, or to direct, require or
be heard with respect to, any action taken or omitted in respect of the
Collateral or under this Agreement or the Loan Documents; and (v) no holder of
any Related Obligation shall exercise any right of setoff, banker's lien or
similar right except as expressly provided in SECTION 11.6.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. AMENDMENTS, WAIVERS, ETC.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless in writing
and signed by each Lender, in addition to the Requisite Lenders, do any of the
following:
(i) waive any of the conditions specified in Section
3.1 or 3.2 except with respect to a condition based upon
another provision hereof, the waiver of which requires only
the concurrence of the Requisite Lenders;
(ii) increase the Revolving Credit Commitments of the
Lenders or subject the Lenders to any additional obligations;
(iii) extend the scheduled final maturity of any Loan,
or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal (it being understood that a
Section 2.9 does not provide for scheduled dates fixed for
payment) or of the Revolving Credit Commitments;
(iv) reduce the principal amount of any Loan or
Reimbursement Obligation (other than by the payment or
prepayment thereof);
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(v) reduce the rate of interest on any Loan or
Reimbursement Obligations or any fee payable hereunder;
(vi) postpone any scheduled date fixed for payment
of such interest or fees;
(vii) change the aggregate Ratable Portions of the
Lenders which shall be required for the Lenders or any of them
to take any action hereunder;
(viii) increase the Advance Rates above the rates set forth
in the definition thereof;
(ix) release any of the Collateral except as provided
in Section 10.7(b) or release any Subsidiary Guarantor from
its obligations under the Guaranty except in connection with
sale or other disposition permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction
otherwise prohibited by this Agreement); or
(x) amend Section 10.7(b) or this Section 11.1 or the
definition of the terms "REQUISITE LENDERS", "RATABLE
PORTION", "FIXED ASSET AMOUNT", "ELIGIBLE INVENTORY",
"ELIGIBLE EQUIPMENT", "ELIGIBLE REAL PROPERTY", "ELIGIBLE
RECEIVABLE", "ELIGIBLE FINISHED GOODS", "ELIGIBLE RAW
MATERIALS", ELIGIBLE WORK-IN-PROCESS", "ELIGIBLE SUPPLIES" and
"ELIGIBLE PARTS".
and PROVIDED, FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
SECTION 11.2. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Credit Loans, the Swing Loans and the Letters of Credit); PROVIDED, HOWEVER,
that (i) such assignment shall cover the same percentage of such Lender's
Revolving Credit Outstandings and Revolving Credit Commitment, (ii) the
aggregate amount being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event (if less than the Assignor's entire interest) be less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, except, in
either case, (A) with the consent of the Borrower and the Administrative Agent
or (B) if such assignment is being made to a Lender or an Affiliate or Approved
Fund of such Lender, and (iii) if such Eligible Assignee is not, prior to the
date of such assignment, a Lender or an Affiliate or Approved Fund of a Lender,
such assignment shall be subject to the prior consent
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of the Administrative Agent and the Borrower (which consent shall not be
unreasonably withheld or delayed); PROVIDED, HOWEVER, that notwithstanding any
other provision of this SECTION 11.2, the consent of the Borrower shall not be
required for any assignment which occurs when any Event of Default shall have
occurred and be continuing.
(b) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with any Revolving Credit Note (if the assigning Lender's
Loans are evidenced by a Revolving Credit Note) subject to such assignment. Upon
such execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
$3,500 from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall become a party hereto and, to the
extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender, and if such Lender were an Issuer, of such Issuer
hereunder and thereunder, and (ii) the assignor thereunder shall, to the extent
that rights and obligations under this Agreement have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (except those
which survive the payment in full of the Obligations) and be released from its
obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under the Loan Documents, such Lender shall
cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to
in SECTION 11.3 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recording of the names and addresses of
the Lenders and the Revolving Credit Commitments of and principal amount of the
Loans and Letter of Credit Obligations owing to each Lender from time to time
(the "REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Loan Parties, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower, the Administrative
Agent or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall, if
requested by such assignee, execute and deliver to the Administrative Agent, new
Revolving Credit Notes to the order of such assignee in an amount equal to the
Revolving Credit Commitments assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has surrendered any Revolving Credit
Note for exchange in connection with the assignment and has retained Revolving
Credit Commitments hereunder, new Revolving Credit Notes to the order of the
assigning Lender in an amount equal to the Revolving Credit Commitments retained
by it hereunder. Such new Revolving Credit Notes shall be dated the same date as
the surrendered Revolving Credit Notes and be in substantially the form of
EXHIBIT B.
(e) In addition to the other assignment rights provided in this
SECTION 11.2, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (i) any Federal Reserve Bank pursuant
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to Regulation A of the Federal Reserve Board without notice to or consent of the
Borrower or the Administrative Agent and (ii) any trustee for the benefit of the
holders of such Lender's Securities; PROVIDED, HOWEVER, that no such assignment
shall release the assigning Lender from any of its obligations hereunder.
(f) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to Revolving Credit Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including the right to enforce the obligations of the
Loan Parties), except if any such amendment, waiver or other modification or
consent would (i) reduce the amount, or postpone any date fixed for, any amount
(whether of principal, interest or fees) payable to such participant under the
Loan Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with SECTION 10.7(B). In the event of the
sale of any participation by any Lender, (A) such Lender's obligations under the
Loan Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties for the performance of such obligations, (C)
such Lender shall remain the holder of such Obligations for all purposes of this
Agreement, and (D) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Each participant
shall be entitled to the benefits of SECTIONS 2.14(D), 2.15 and 2.16 as if it
were a Lender; PROVIDED, HOWEVER, that anything herein to the contrary
notwithstanding, the Borrower shall not, at any time, be obligated to pay to any
participant of any interest of any Lender, under SECTION 2.13, 2.14(D), 2.13 or
2.15, any sum in excess of the sum which the Borrower would have been obligated
to pay to such Lender in respect of such interest had such participation not
been sold.
(g) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Lender. If any Issuer ceases to be a Lender hereunder by virtue of any
assignment made pursuant to this SECTION 11.2, then, as of the effective date of
such cessation, such Issuer's obligations to issue Letters of Credit pursuant to
SECTION 2.04 shall terminate and such Issuer shall be an Issuer hereunder only
with respect to outstanding Letters of Credit issued prior to such date.
SECTION 11.3. COSTS AND EXPENSES.
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of the
Administrative Agent's counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, local legal counsel,
auditors, accountants, appraisers, printers, insurance and environmental
advisers, and other consultants and agents) incurred by the Administrative Agent
in connection with (i) the Administrative Agent's audit and investigation of the
Borrower and its Subsidiaries in connection with the preparation, negotiation
and execution of the Loan Documents and the Administrative Agent's periodic
audits of the
91
Borrower and its Subsidiaries, as the case may be; (ii) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in ARTICLE III), the Loan Documents and any proposal letter or
commitment letter issued in connection therewith and the making of the Loans
hereunder; (iii) the creation, perfection or protection of the Liens under the
Loan Documents (including, without limitation, any reasonable fees and expenses
for local counsel in various jurisdictions); (iv) the ongoing administration of
this Agreement and the Loans, including consultation with attorneys in
connection therewith and with respect to the Administrative Agent's rights and
responsibilities hereunder and under the other Loan Documents; (v) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations, any
Loan Party, any of the Borrower's Subsidiaries, the Reorganization, the Related
Documents, this Agreement or any of the other Loan Documents; (vii) the response
to, and preparation for, any subpoena or request for document production with
which the Administrative Agent is served or deposition or other proceeding in
which the Administrative Agent is called to testify, in each case, relating in
any way to the Obligations, any Loan Party, any of the Borrowers' Subsidiaries,
the Reorganization, the Related Documents, this Agreement or any of the other
Loan Documents; and (viii) any amendments, consents, waivers, assignments,
restatements, or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same.
(b) The Borrower further agrees to pay or reimburse the Administrative
Agent and each of the Lenders and Issuers upon demand for all out-of-pocket
costs and expenses, including, without limitation, reasonable attorneys' fees
(including allocated costs of internal counsel and costs of settlement),
incurred by the Administrative Agent, such Lenders or Issuers (i) in enforcing
any Loan Document or Obligation or any security therefor or exercising or
enforcing any other right or remedy available by reason of an Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, any Loan
Party, any of the Borrowers' Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any of the other Loan Documents or
Related Documents; and (iv) in taking any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) described in CLAUSES (I) through
(III) above.
SECTION 11.4. INDEMNITIES.
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and each Issuer and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in ARTICLE III) (each
such Person being an "INDEMNITEE") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including fees and
disbursements of counsel to any such Indemnitee) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any investigation, litigation or proceeding, whether or not any
such Indemnitee is a party thereto, whether direct, indirect, or consequential
and whether based on any federal, state or local law or
92
other statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, any other Loan Document, any
Obligation, any Letter of Credit, the Disclosure Statement, any Related
Document, the Plan of Reorganization or any act, event or transaction related or
attendant to any thereof, or the use or intended use of the proceeds of the
Loans or Letters of Credit or in connection with any investigation of any
potential matter covered hereby (collectively, the "INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, that the Borrower shall not have any obligation under this
SECTION 11.4 to an Indemnitee with respect to any Indemnified Matter caused by
or resulting from the gross negligence or willful misconduct of that Indemnitee,
as determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, Indemnified Matters include
(i) all Environmental Liabilities and Costs arising from or connected with the
past, present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate; (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries;
(iii) any costs or liabilities incurred in connection with any Environmental
Lien; (iv) any costs or liabilities incurred in connection with any other matter
under any Environmental Law, including CERCLA and applicable state property
transfer laws, whether, with respect to any of such matters, such Indemnitee is
a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the
successor in interest to the Borrower or any of its Subsidiaries, or the owner,
lessee or operator of any property of the Borrower or any of its Subsidiaries by
virtue of foreclosure, except, with respect to those matters referred to in
CLAUSES (I), (II), (III) and (IV) above, to the extent incurred following (A)
foreclosure by the Administrative Agent, any Lender or any Issuer, or the
Administrative Agent, any Lender or any Issuer having become the successor in
interest to the Borrower or any of its Subsidiaries, and (B) attributable solely
to acts of the Administrative Agent, such Lender or such Issuer or any agent on
behalf of the Administrative Agent or such Lender.
(b) The Borrower shall indemnify the Administrative Agent, the Lenders
and each Issuer for, and hold the Administrative Agent, the Lenders and each
Issuer harmless from and against, any and all claims for brokerage commissions,
fees and other compensation made against the Administrative Agent, the Lenders
and the Issuers for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement.
(c) The Administrative Agent, each Lender and each Issuer agree that
in the event that any such investigation, litigation or proceeding set forth in
subparagraph (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action, is requested of it
or any of its officers, directors, Administrative Agents and employees, for
which any Indemnitee may desire indemnity or defense hereunder, such Indemnitee
shall promptly notify the Borrower in writing.
(d) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action and the Borrower, in any event, may participate in the
defense thereof with legal counsel of the Borrower's choice. In the event that
such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
93
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate or in any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.
(e) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this SECTION 11.4) or any other Loan Document shall (i) survive payment in full
of the Obligations and (ii) inure to the benefit of any Person who was at any
time an Indemnitee under this Agreement or any other Loan Document.
SECTION 11.5. LIMITATION OF LIABILITY. The Borrower agrees that
no Indemnitee shall have any liability (whether direct or indirect, in contract,
tort or otherwise) to any Loan Party or any of their respective Subsidiaries or
any of their equity holders or creditors for or in connection with the
transactions contemplated hereby and in the other Loan Documents and Related
Documents, except to the extent such liability is found in a final judgment by a
court of competent jurisdiction to have resulted from such Indemnitee's gross
negligence or willful misconduct. In no event, however, shall any Indemnified
Party be liable on any theory of liability for any special, indirect,
consequential or punitive damages and the Borrower hereby waives, releases and
agrees (for itself and on behalf of its Subsidiaries) not to ▇▇▇ upon any such
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
SECTION 11.6. RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default each Lender and each Affiliate of a
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or its Affiliates to or for the
credit or the account of the Borrower against any and all of the Obligations now
or hereafter existing whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such Obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender or its Affiliates; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this SECTION 11.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.
SECTION 11.7. SHARING OF PAYMENTS, ETC.
(a) If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) on
account of the Revolving Loans made by it (other than pursuant to SECTIONS 2.14,
2.15 or 2.16) in excess of its Ratable Portion of payments obtained by all the
Lenders on account of such Obligations, such Lender (a "PURCHASING LENDER")
shall forthwith purchase from the other Lenders (each, a "SELLING LENDER") such
participations in their Loans or other Obligations as shall be necessary to
cause such Purchasing Lender to share the excess payment ratably with each of
them.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall
94
be rescinded and such Selling Lender shall repay to the Purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Selling Lender's ratable share (according to the proportion of (i) the
amount of such Selling Lender's required repayment to (ii) the total amount so
recovered from the Purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this SECTION 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 11.8. NOTICES, ETC. All notices, demands, requests and
other communications provided for in this Agreement shall be given in writing,
or by any telecommunication device capable of creating a written record, and
addressed to the party to be notified as follows:
(a) if to the Borrower:
Paragon Trade Brands, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopy no:
(b) if to any Lender, at its Domestic Lending Office specified
opposite its name on SCHEDULE II or on the signature page of any applicable
Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name
on SCHEDULE II; and
(d) if to the Administrative Agent:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopy no:
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as shall be notified in writing (i) in the case of the
Borrower and the Administrative Agent, to the other parties and (ii) in the case
of all other parties, to the Borrower and the Administrative Agent. All such
notices and communications shall be effective upon personal delivery (if
delivered by hand, including any overnight courier service), when deposited
95
in the mails (if sent by mail), or when properly transmitted (if sent by a
telecommunications device); PROVIDED, HOWEVER, that notices and communications
to the Administrative Agent pursuant to Article II or X shall not be effective
until received by the Administrative Agent.
SECTION 11.9. NO WAIVER; REMEDIES. No failure on the part of any
Lender, Issuer or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 11.10. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
SECTION 11.11. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
SECTION 11.12. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including any objection to the laying of venue or based on the
grounds of FORUM NON CONVENIENS, which any of them may now or hereafter have to
the bringing of any such action or proceeding in such respective jurisdictions.
(b) The Borrower hereby irrevocably designates, appoints and
empowers Corporation Service Company (telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇) (the "PROCESS
AGENT"), in the case of any suit, action or proceeding brought in the United
States of America as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents that may be served in
any action or proceeding arising out of or in connection with this Agreement or
any Loan Document. Such service may be made by mailing (by registered or
certified mail, postage prepaid) or delivering a copy of such process to the
Borrower in care of the Process Agent at the Process Agent's above address, and
the Borrower hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. As an alternative method of service, the
Borrower irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing (by registered or certified mail, postage
prepaid) of copies of such process to the Process Agent or the Borrower at its
address specified in SECTION 11.8. The Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The Borrower hereby irrevocably consents to the service of any and all legal
process,
96
summons, notices and documents in any suit, action or proceeding brought in the
United States of America arising out of or in connection with this Agreement or
any of the other Loan Documents by the mailing (by registered or certified mail,
postage prepaid) or delivering of a copy of such process to the Borrower at its
address specified in SECTION 11.8. The Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Nothing contained in this SECTION 11.12 shall affect the right
of the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower or any other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 11.13. WAIVER OF JURY TRIAL. EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE ISSUERS AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
SECTION 11.14. MARSHALING; PAYMENTS SET ASIDE. None of the
Administrative Agent, any Lender or any Issuer shall be under any obligation to
marshal any assets in favor of the Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that the Borrower makes
a payment or payments to the Administrative Agent, the Lenders or the Issuers or
any of such Persons receives payment from the proceeds of the Collateral or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
SECTION 11.15. SECTION TITLES. The Section titles contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
SECTION 11.16. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document.
97
SECTION 11.17. ENTIRE AGREEMENT. This Agreement, together with
all of the other Loan Documents and all certificates and documents delivered
hereunder or thereunder, embodies the entire agreement of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
SECTION 11.18. CONFIDENTIALITY. Each Lender and the Administrative
Agent agree to keep information obtained by it pursuant hereto and the other
Loan Documents confidential in accordance with its customary practices and
agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Lender's or the Administrative Agent's, as
the case may be, employees, representatives and agents who are or are expected
to be involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender or the Administrative
Agent, as the case may be, on a non-confidential basis from a source other than
the Borrower, (c) to the extent disclosure is required by law, regulation or
judicial order or requested or required by bank regulators or auditors, or (d)
to assignees or participants or potential assignees or participants who agree to
be bound by the provisions of this SECTION 11.18.
98
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
PARAGON TRADE BRANDS, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
CITICORP U.S.A., INC.
as Administrative Agent
By: /S/ SHAPLEIGH ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director -
Global Structural Products
LENDERS
CITIBANK, N.A.
By: /S/ SHAPLEIGH ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director -
Global Structural Products
▇▇▇▇▇▇ FINANCIAL, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: A.V.P.
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. V.P.
FLEET CAPITAL CORPORATION
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: S.V.P.
SUMMIT COMMERCIAL/GIBRALTAR CORP.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Vice President