EXHIBIT 4.11
DEBTOR IN POSSESSION REVOLVING CREDIT AGREEMENT
dated as of December 18, 2001
among
NATIONSRENT, INC.
AND ITS SUBSIDIARIES PARTY HERETO,
as debtors and debtors in possession and as joint and several Borrowers,
and
The Lending Institutions Referred to Herein
as Banks
and
FLEET NATIONAL BANK
as Administrative Agent, Syndication Agent,
Swing Lender, and Issuing Bank
with
FLEET SECURITIES, INC., as Lead Arranger and Book Manager
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.........................................................2
1.1. Definitions..........................................................................2
1.2. Rules of Interpretation.............................................................21
2. THE REVOLVING CREDIT FACILITY..................................................................22
2.1. Commitment to Lend..................................................................22
2.2. Commitment Fee......................................................................22
2.3. Reduction of Total Commitment.......................................................23
2.4. The Notes...........................................................................23
2.5. Interest on Loans...................................................................23
2.6. Requests for Loans..................................................................24
2.7. Funds for Loans.....................................................................24
2.7.1. Funding Procedures.......................................................24
2.7.2. Advances by Agent........................................................24
2.8. Swing Line..........................................................................25
2.9. Settlements.........................................................................25
2.9.1. General..................................................................25
2.9.2. Failure to Make Funds Available..........................................26
2.9.3. No Effect on Other Banks.................................................26
2.10. Repayments of Loans Prior to Termination Declaration Date...........................27
2.10.1. Credit for Funds Received in Concentration Account......................27
2.10.2. Application of Payments Prior to Termination Declaration Date...........27
2.11. Repayments of Loans After Termination Declaration Date..............................29
3. REPAYMENT OF THE LOANS.........................................................................29
3.1. Maturity............................................................................29
3.2. Mandatory Repayments of Loans and Prepetition Lender Debt...........................29
3.3. Optional Repayments of Loans........................................................31
4. LETTERS OF CREDIT..............................................................................31
4.1. Letter of Credit Commitments........................................................31
4.1.1. Commitment to Issue Letters of Credit....................................31
4.1.2. Letter of Credit Applications............................................32
4.1.3. Terms of Letters of Credit...............................................32
4.1.4. Reimbursement Obligations of Banks.......................................32
4.1.5. Participations of Banks..................................................32
4.2. Reimbursement Obligation of the Borrowers...........................................32
4.3. Letter of Credit Payments...........................................................33
4.4. Obligations Absolute................................................................34
4.5. Reliance by Issuing Bank............................................................34
4.6. Letter of Credit Fees...............................................................35
4.7. Cash Collateral for Letter of Credit Obligations....................................35
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5. WAIVER OF SURETYSHIP DEFENSES..................................................................35
6. CLOSING DATE FEES..............................................................................36
6.1. Agents' Fee.........................................................................36
6.2. Nature of Fees......................................................................36
7. CERTAIN GENERAL PROVISIONS.....................................................................36
7.1. Funds for Payments..................................................................36
7.1.1. Payments to Agent........................................................36
7.1.2. No Offset, etc...........................................................37
7.1.3. Receipt of Funds by Agent................................................37
7.2. Computations........................................................................37
7.3. Capital Adequacy....................................................................37
7.4. Certificate.........................................................................38
7.5. Interest After Default..............................................................38
7.6. Interest Limitation.................................................................38
8. Priority and Collateral Security...............................................................39
8.1. Superpriority Claims and Collateral Security........................................39
8.2. Collateral Security Perfection......................................................40
8.3. No Discharge; Survival of Claims....................................................40
9. REPRESENTATIONS AND WARRANTIES.................................................................41
9.1. Corporate Authority.................................................................41
9.1.1. Organization; Good Standing..............................................41
9.1.2. Authorization............................................................41
9.1.3. Enforceability...........................................................41
9.2. Governmental Approvals..............................................................41
9.3. Title to Properties; Leases.........................................................42
9.4. Fiscal Year; Financial Statements; Projections......................................42
9.4.1. Fiscal Year, Fiscal Quarters.............................................42
9.4.2. Financial Statements.....................................................42
9.4.3. Cash Budget..............................................................42
9.5. No Material Changes.................................................................42
9.6. Franchises, Patents, Copyrights, etc................................................43
9.7. Litigation..........................................................................43
9.8. No Materially ADVERSE Contracts, etc................................................43
9.9. Compliance with Other Instruments, Laws, etc........................................44
9.10. Tax Status..........................................................................44
9.11. No Event of Default.................................................................44
9.12. Holding Company and Investment Company Acts.........................................44
9.13. Absence of Financing Statements, etc................................................44
9.14. Certain Transactions................................................................44
9.15. Employee Benefit Plans..............................................................45
9.15.1. In General..............................................................45
9.15.2. Terminability of Welfare Plans..........................................45
9.15.3. Guaranteed Pension Plans................................................45
9.15.4. Multiemployer Plans.....................................................46
9.16. Use of Proceeds.....................................................................46
9.16.1. General.................................................................46
9.16.2. Regulations U and X.....................................................46
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9.17. Environmental Compliance............................................................46
9.18. Subsidiaries; Capitalization, Etc...................................................48
9.19. Disclosure..........................................................................48
9.20. Perfection of Security Interest.....................................................48
9.21. Bank Accounts.......................................................................49
9.22. Filed Entities......................................................................49
9.23. Eligible Receivables................................................................49
10. AFFIRMATIVE COVENANTS OF THE BORROWERS........................................................49
10.1. Punctual Payment....................................................................49
10.2. Maintenance of Office...............................................................49
10.3. Records and Accounts................................................................49
10.4. Financial Statements, Certificates and Information..................................50
10.5. Notices.............................................................................51
10.5.1. Defaults................................................................51
10.5.2. Environmental Events....................................................51
10.5.3. Notice of Litigation and Judgments......................................51
10.5.4. Notification of Claim Against Collateral................................52
10.5.5. Notice Regarding Executory Contracts....................................52
10.6. Corporate Existence; Maintenance of Properties; Etc.................................52
10.7. Insurance...........................................................................52
10.8. Taxes...............................................................................53
10.9. Inspection of Properties and Books; Information.....................................53
10.10. Compliance With Laws, Contracts, Licenses, and Permits..............................53
10.11. Employee Benefit Plans..............................................................54
10.12. Use of Proceeds.....................................................................54
10.13. Cash Management Arrangements; Depository Arrangements...............................54
10.14. Retention of Financial Advisor and Commercial Finance Audits and Appraisals.........55
10.15. Collateral Preservation.............................................................55
10.16. Real Estate Matters.................................................................55
10.17. Landlords and Warehousemen..........................................................56
10.18. Management Search...................................................................56
10.19. Leases..............................................................................56
10.20. Further Assurances..................................................................57
11. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS...................................................57
11.1. Restrictions on Indebtedness........................................................57
11.2. Restrictions on Liens...............................................................57
11.3. Restrictions on Investments.........................................................59
11.4. Distributions.......................................................................59
11.5. Merger, Consolidation and Disposition of Assets.....................................60
11.5.1. Mergers and Acquisitions................................................60
11.5.2. Disposition of Assets...................................................60
11.6. Sale and Leaseback..................................................................60
11.7. Compliance with Environmental Laws..................................................60
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11.8. Subordinated Debt...................................................................60
11.9. Employee Benefit Plans..............................................................61
11.10. Business Activities.................................................................61
11.11. Fiscal Year; Fiscal Quarters........................................................61
11.12. Transactions with Affiliates........................................................61
11.13. Bank Accounts.......................................................................62
11.14. Bankruptcy Cases....................................................................62
11.15. Prepetition Indebtedness............................................................62
12. FINANCIAL COVENANTS OF THE BORROWERS..........................................................63
13. CLOSING CONDITIONS............................................................................66
13.1. Interim Order; Final Order..........................................................66
13.2. Loan Documents......................................................................66
13.3. Certified Copies of Charter Documents...............................................66
13.4. Corporate Action....................................................................66
13.5. Incumbency Certificate..............................................................66
13.6. Certificates of Insurance...........................................................67
13.7. Opinions of Counsel.................................................................67
13.8. Payment of Fees.....................................................................67
13.9. Perfection Certificates and Search Results..........................................67
13.10. Validity of Liens...................................................................67
13.11. First Day Orders....................................................................67
13.12. Amendment to Prepetition Credit Agreement...........................................68
14. CONDITIONS TO ALL BORROWINGS..................................................................68
14.1. Interim Order or Final Order........................................................68
14.2. Representations True; No Event of Default...........................................69
14.3. No Legal Impediment.................................................................69
14.4. Governmental Regulation.............................................................69
14.5. Proceedings and Documents...........................................................69
14.6. Payment of Fees.....................................................................69
15. EVENTS OF DEFAULT; ACCELERATION; ETC..........................................................69
15.1. Events of Default and Acceleration..................................................70
15.2. Termination of Commitments..........................................................74
15.3. Remedies............................................................................74
15.4. Distribution of Collateral Proceeds.................................................75
16. SHARING OF SET-OFFS, ETC......................................................................76
17. THE AGENTS....................................................................................77
17.1. Authorization.......................................................................77
17.2. Employees and Agent.................................................................78
17.3. No Liability........................................................................78
17.4. No Representations..................................................................78
17.4.1. General.................................................................78
17.4.2. Closing Documentation, etc..............................................79
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17.5. Payments............................................................................79
17.5.1. Payments to Agent.......................................................79
17.5.2. Distribution by Agent...................................................79
17.5.3. Delinquent Banks........................................................79
17.6. Holders of Notes....................................................................80
17.7. Indemnity...........................................................................80
17.8. Agent as Banks......................................................................80
17.9. Resignation.........................................................................81
17.10. Notification of Defaults and Events of Default......................................81
17.11. Duties in the Case of Enforcement...................................................81
18. EXPENSES AND INDEMNIFICATION..................................................................82
18.1. Expenses............................................................................82
18.2. Indemnification.....................................................................82
18.3. Survival............................................................................83
19. SURVIVAL OF COVENANTS, ETC....................................................................84
20. ASSIGNMENT AND PARTICIPATION..................................................................84
20.1. Conditions to Assignment by Banks...................................................84
20.2. Certain Representations and Warranties; Limitations; Covenants......................85
20.3. Register............................................................................86
20.4. New Notes...........................................................................86
20.5. Participations......................................................................86
20.6. Disclosure..........................................................................87
20.7. Assignee or Participant Affiliated with the Borrowers...............................87
20.8. Miscellaneous Assignment Provisions.................................................87
20.9. Assignment by Borrowers.............................................................88
20.10. Assignment of Agency Roles..........................................................88
21. NOTICES, ETC..................................................................................88
22. GOVERNING LAW.................................................................................89
23. HEADINGS......................................................................................89
24. COUNTERPARTS..................................................................................89
25. ENTIRE AGREEMENT, ETC.........................................................................90
26. WAIVER OF JURY TRIAL..........................................................................90
27. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................90
28. SEVERABILITY..................................................................................91
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Note
Exhibit B Form of Loan Request
Exhibit C Initial Cash Budget
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Borrowing Base Certificate
Schedule 1.1 Lenders; Commitment Percentages
Schedule 9.3 Title to Properties
Schedule 9.4.1 Fiscal Quarters
Schedule 9.6 Intellectual Properties
Schedule 9.7 Litigation
Schedule 9.8 Materially Adverse Contracts
Schedule 9.9 Compliance with Laws
Schedule 9.14 Certain Transactions
Schedule 9.15.1 Employee Benefit Plans
Schedule 9.17 Environmental Compliance
Schedule 9.18 Subsidiaries
Schedule 9.19 Disclosure
Schedule 9.21 Bank Accounts
Schedule 9.22 Certain Subsidiaries
Schedule 11.1 Indebtedness
Schedule 11.2 Liens
Schedule 11.3 Investments
Schedule 11.12 Affiliate Transactions
DEBTOR IN POSSESSION
REVOLVING
CREDIT AGREEMENT
This DEBTOR IN POSSESSION
REVOLVING CREDIT AGREEMENT is made as of
December 18, 2001, by and among NATIONSRENT, INC., a Delaware corporation and a
debtor and a debtor in possession (the "PARENT"), and its Subsidiaries party
hereto, each a debtor and a debtor in possession (together with the Parent, the
"BORROWERS"), the lending institutions listed on SCHEDULE 1.1 hereto, FLEET
NATIONAL BANK, as the Issuing Bank and the Swing Bank (the "ISSUING BANK" and
the "SWING BANK"), FLEET NATIONAL BANK, as the administrative agent for the
Banks (the "ADMINISTRATIVE AGENT") and as the syndication agent for the Banks
(the "SYNDICATION AGENT" and together with the Administrative Agent, the
"AGENTS"), and FLEET SECURITIES, INC., as lead arranger and book manager (the
"ARRANGER").
WHEREAS, on December 17, 2001 (the "FILING DATE"), the Borrowers filed
separate petitions under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware;
WHEREAS, each of the Borrowers intends to continue to operate its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, before the Filing Date, the Parent and its Subsidiaries party
thereto (the "PREPETITION BORROWERS"), the Lenders party thereto (the
"PREPETITION LENDERS"), Fleet National Bank, as the administrative agent (the
"PREPETITION ADMINISTRATIVE AGENT"), Bankers Trust Company, as the syndication
agent, and The Bank of Nova Scotia, as the documentation agent (collectively,
the "PREPETITION AGENTS"), entered into that certain Fifth Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of August 2, 2000, as amended
by that certain First Amendment to Fifth Amended and Restated Revolving Credit
and Term Loan Agreement, dated as of March 14, 2001, that certain Second
Amendment to Fifth Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of August 10, 2001 and that certain Third Amendment to Fifth
Amended and Restated Revolving Credit and Term Loan Agreement, dated as of
December 14, 2001 (as so amended, the "PREPETITION CREDIT AGREEMENT"), pursuant
to which the Prepetition Lenders extended credit to the Prepetition Borrowers on
the terms set forth therein;
WHEREAS, as of the date hereof, the Prepetition Lenders under the
Prepetition Credit Agreement are owed approximately:
(a) $363,943,488.34 IN REVOLVING LOAN PRINCIPAL OBLIGATIONS
INCURRED DIRECTLY BY THE PREPETITION BORROWERS, PLUS INTEREST, FEES,
COSTS AND EXPENSES, INCLUDING $8,040,666.67 IN LETTER OF CREDIT
REIMBURSEMENT OBLIGATIONS (THE "PREPETITION REVOLVER"), THE OBLIGATIONS
OF THE PREPETITION BORROWERS IN RESPECT OF THE PREPETITION REVOLVER
BEING JOINT AND SEVERAL, AND
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(b) $395,364,440.56 IN TERM LOAN PRINCIPAL OBLIGATIONS
INCURRED DIRECTLY BY THE PREPETITION BORROWERS, PLUS INTEREST, FEES,
COSTS AND EXPENSES (THE "TERM LOAN"), THE OBLIGATIONS OF THE
PREPETITION BORROWERS IN RESPECT OF THE TERM LOAN BEING JOINT AND
SEVERAL;
WHEREAS, THE LOAN OBLIGATIONS OF THE BORROWERS UNDER THE PREPETITION
CREDIT AGREEMENT ARE SECURED BY LIENS ON SUBSTANTIALLY ALL OF THE EXISTING AND
AFTER-ACQUIRED ASSETS OF THE BORROWERS, AND SUCH LIENS ARE PERFECTED AND, EXCEPT
AS OTHERWISE PERMITTED IN THE PREPETITION CREDIT AGREEMENT, HAVE PRIORITY OVER
OTHER LIENS;
WHEREAS, the Borrowers have requested that the Banks provide financing
to the Borrowers consisting of advances and letter of credit reimbursement
obligations in an amount up to $55,000,000 pursuant to Sections 364(c)(1), (2)
and (3) and 364(d) of the Bankruptcy Code in order to provide working capital
for the Borrowers, to refinance the Borrowers' obligations in respect of the
letters of credit issued under the Prepetition Revolver and for the Borrowers to
use for other corporate purposes;
WHEREAS, the Banks have indicated their willingness to agree to extend
such credit to the Borrowers, all on the terms and conditions set forth herein
and in the other Loan Documents and in accordance with Sections 364(c)(1), (2)
and (3) and 364(d) of the Bankruptcy Code, so long as:
(a) such postpetition credit obligations are (i) secured by
Liens on all of the property and interests, real and personal, tangible
and intangible, of the Borrowers, whether now owned or hereafter
acquired, subject in priority only to certain Liens and the Carve Out
as hereinafter provided, and (ii) given superpriority status subject
only to the Carve Out, and
(b) the Prepetition Lenders receive certain adequate
protection for the Borrowers' use, sale or lease of collateral,
including the Borrowers' use of cash collateral, and the priming of the
prepetition Liens securing the obligations of the Borrowers in respect
of the Prepetition Credit Agreement; and
WHEREAS, the Borrowers have agreed to provide such collateral security,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court;
NOW, THEREFORE, in consideration of these premises and of the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ACCOUNT DEBTOR. A Person who is obligated on a Receivable.
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ADJUSTED CONSOLIDATED EBITDA. For any period, (i) consolidated net
income or loss of the Borrowers for such period, determined in accordance with
generally accepted accounting principles, after deduction of all expenses,
taxes, and other proper charges, MINUS (ii) to the extent included in the
calculation of consolidated net income for such period and without duplication,
(A) non-cash gains or other non-cash income for such period, and (B) any gains
from the sale or other disposition of assets (other than Specified Resale
Inventory) during such period, and PLUS (iii) to the extent deducted in the
calculation of consolidated net income for such period and without duplication,
(A) the interest expense of the Borrowers for such period, as determined in
accordance with generally accepted accounting principles, (B) income tax
expense, (C) cash restructuring charges incurred in connection with the Cases,
(D) depreciation, amortization and, if non-recurring, other non-cash charges to
income for such period, and (E) any losses from the sale or other disposition of
assets (other than Specified Resale Inventory) during such period.
ADMINISTRATIVE AGENT. As defined in the preamble hereto.
ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent's office
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or at such other
location as the Administrative Agent may designate from time to time.
AFFILIATE. Any Person that would be considered to be an affiliate of
any of the Borrowers under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if the
Borrowers were issuing securities.
AGENCY ACCOUNT AGREEMENTS. Agreements, in form and substance reasonably
satisfactory to the Administrative Agent, entered into or to be entered into
between the Administrative Agent and the depository institutions at which any of
the Borrowers maintain depository accounts, including lockbox and collection
arrangements relating thereto.
AGENTS. As defined in the preamble hereto.
AGENTS' SPECIAL COUNSEL. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may
be approved by the Agents. For purposes of ss.18.2(c), the term includes any
predecessor counsel that served as the Agents' Special Counsel.
ARRANGER. As defined in the preamble hereto.
ASSET DISPOSITION REPAYMENT. See ss.3.2(c).
ASSIGNMENT AND ACCEPTANCE. See ss.20.1.
AVOIDANCE ACTIONS. Avoidance actions of the Borrowers under Chapter 5
or Section 724(a) of the Bankruptcy Code and proceeds thereof.
BALANCE SHEET DATE. December 31, 2000.
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BANKS. The lending institutions listed on SCHEDULE 1.1 hereto and any
other Person who becomes an assignee of any rights and obligations of a Bank
pursuant to ss.20. The term "Banks" as used herein also includes the Issuing
Bank.
BANKRUPTCY CODE. ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code.
BANKRUPTCY COURT. The United States Bankruptcy Court for the District
of Delaware or such other court having jurisdiction over the Cases.
BASE CAPITAL EXPENDITURES. For any period, Capital Expenditures during
such period, MINUS Capital Expenditures during such period in connection with
the purchase, lease, improvement, maintenance or repair of, or the acquisition
of Capital Assets to be used in, stores of ▇▇▇▇'▇ Companies, Inc. and its
Affiliates.
BASE RATE. The higher of (i) the annual rate of interest announced from
time to time by the Administrative Agent at the Administrative Agent's Office as
its "prime rate" and (ii) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean for any day, the rate per annum equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three funds brokers of
recognized standing selected by the Administrative Agent.
BORROWING BASE At the time of reference, the amount equal to the sum of
(i) 80% of the Eligible Receivables at such time, MINUS (ii) the amount of the
Reserves specified by the Agents in their reasonable discretion. The Borrowing
Base may be determined by reference to the Borrowing Base Certificate most
recently delivered to the Agents in accordance with the terms of this Credit
Agreement.
BORROWING BASE CERTIFICATE. See ss.10.4(g).
BORROWERS. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in New York, New
York and Boston, Massachusetts are open for the transaction of banking business.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will). The term does not include any item
customarily charged directly to expense or depreciated over a useful life of
twelve (12) months or less in accordance with generally accepted accounting
principles.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by any of
the Borrowers in connection with the purchase, lease, improvement, maintenance,
or repair by such Borrower of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.
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CAPITALIZED LEASE. With respect to any of the Borrowers, any lease of
any property (whether real, personal or mixed) by one or more of such Persons as
lessee that, in accordance with generally accepted accounting principles, either
would be required to be classified and accounted for as a capital lease on a
balance sheet of such Persons or otherwise be disclosed as such in a note to
such balance sheet, other than any such lease under which any of the Borrowers
is the lessor.
CARVE OUT. At the time of reference thereto, the sum of (i) allowed
administrative expenses payable pursuant to 28 U.S.C.ss.1930(a)(6) and (ii)
Priority Professional Expenses incurred on and after the Filing Date.
CASES. Collectively, the Borrowers' reorganization cases under Chapter
11 of the Bankruptcy Code pending in the Bankruptcy Court.
CLOSING DATE. The first date on which the conditions set forth in ss.13
have been satisfied and any Loan is to be made or any Letter of Credit is to be
issued hereunder. The date shall be determined after taking into account the
deferral and waiver, in the discretion of the Administrative Agent, of the
satisfaction of any condition precedent pursuant to the last paragraph of ss.13.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the Borrowers
that are or are intended to be subject to the Liens created by the Security
Documents or the Orders.
COMMITMENT. With respect to each Bank, the product of such Bank's
Commitment Percentage and the Total Commitment then in effect, as the same may
be reduced from time to time; or, if such commitment is terminated pursuant to
the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1.1 hereto as such Bank's percentage of the Total Commitment.
COMMITMENT RESERVE. At the time of reference on or prior to November
30, 2002, the greater of (i) the sum of $5,000,000, MINUS payments on
Prepetition Indebtedness made pursuant to ss.2.10.2(b)(ii) prior to such time
and (ii) zero. The Commitment Reserve shall be zero if the time of reference
thereto is after November 30, 2002.
COMPLIANCE CERTIFICATE. See ss.10.4(c).
CONCENTRATION ACCOUNT. The account no. 9429140760 maintained by the
Borrowers with the Administrative Agent, or such other account or accounts as
shall be so designated in writing by the Administrative Agent.
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CONSOLIDATED. With reference to any term defined herein, shall mean
that term as applied to the accounts of the Borrowers, consolidated in
accordance with generally accepted accounting principles.
CREDIT AGREEMENT. This Debtor In Possession
Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
CREDIT EXPOSURE. With respect to any Bank at the time of reference, (i)
prior to the termination of the Commitments, such Bank's Commitment and (b)
after the termination of the Commitments, the sum of (i) the aggregate principal
amount of the Loans of such Bank PLUS (ii) the aggregate amount of such Bank's
Letter of Credit Participations.
CREDITORS' COMMITTEE. The official unsecured creditors' committee, if
any, appointed in the Cases.
CUMULATIVE CASH FLOW. For any period commencing January 1, 2002, the
Adjusted Consolidated EBITDA for such period, MINUS the Borrowers' cash Capital
Expenditures during such period, PLUS (or MINUS) the Borrowers' positive (or
negative) change in working capital during such period, PLUS any cash or cash
equivalents on hand of the Borrowers on December 31, 2001, to the extent in
excess of the sum of $15,000,000.
DEFAULT. See ss.15.1.
DELINQUENT BANK. See ss.17.5.3.
DERIVATIVE TRANSACTION. Any of (i) a "swap agreement" as defined in
Section 101(53B) of the Bankruptcy Code (other than a spot foreign exchange
transaction), (ii) any equity swap, floor, collar, cap or option transaction,
(iii) any option to enter into any of the foregoing, and (iv) any combination of
the foregoing.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any of the Borrowers,
other than dividends payable solely in shares of common stock of any of the
Borrowers; the purchase, redemption, or other retirement of any shares of any
class of capital stock of any of the Borrowers, directly or indirectly through a
Subsidiary of any of the Borrowers; the return of capital by any of the
Borrowers to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of any of the Borrowers.
DOLLARS OR $. Dollars in lawful currency of the United States of
America.
DRAWDOWN DATE. The date on which any Loan is made or is to be made.
ELIGIBLE ASSIGNEE. Any of (i) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of
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Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with generally accepted accounting principles; (iii) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, PROVIDED that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (iv) the central bank of any country which is a member of
the OECD; (v) with respect to any Bank that is a fund that invests in loans, any
other fund that invests in loans and is managed by the same investment advisor
of such Bank or by an Affiliate of such investment advisor; and (vi) any other
Person approved by the Administrative Agent, such approval not to be
unreasonably withheld.
ELIGIBLE RECEIVABLE. A Receivable of any Borrower that consists of the
unpaid portion of the obligation stated on an invoice issued to, or an
instrument issued by, an Account Debtor with respect to Inventory or equipment
sold and shipped to or services performed for such Account Debtor, or the unpaid
portion of rental obligations due or to become due on chattel paper from such
Account Debtor, all in the ordinary course of business of such Borrower
consistent with past practices, net of any commissions, discounts, credits,
rebates and other allowances of any kind or nature allowable or payable by such
Borrower. No Receivable shall be an Eligible Receivable unless it meets all of
the following requirements:
(i) such Receivable is owned solely by such Borrower, is
subject to a duly perfected, first priority Lien in favor of the
Administrative Agent and is subject to no other Liens other than
Permitted Liens;
(ii) such Receivable has not been outstanding more than 120
days past the originally scheduled due date;
(iii) such Receivable arises out of the bona fide sale or true
lease of goods or rendition of services and is the valid, binding and
legally enforceable obligation of such Account Debtor;
(iv) the goods the sale or lease of which gave rise to such
Receivable were shipped or delivered to such Account Debtor on an
absolute sale or true lease basis and not on a ▇▇▇▇ and hold sale
basis, a consignment sale basis, a guaranteed sale basis, a sale or
return basis, or on the basis of any other similar understanding, and
in the case of the sale of goods, no material part of such goods has
been returned or rejected, and, in the case of the lease of goods, the
lease as to any material part of the leased goods has not been
rejected;
(v) such Receivable is payable in Dollars and from a place of
business or residence of such Account Debtor in the United States;
(vi) such Account Debtor with respect to such Receivable is
not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other pending proceeding or action,
-8-
which action or proceeding might, in the Agents' reasonable judgment,
have a materially adverse effect on such Account Debtor, and is not, in
the reasonable discretion of the Agents, deemed ineligible for credit
for other reasons; EXCLUDING, HOWEVER, from the operation of this
clause (vi) any Account Debtor that is a debtor in possession under
Chapter 11 of the Bankruptcy Code if the Receivable arises from a sale
or lease of Inventory to such Account Debtor after the commencement of
the Account Debtor's Chapter 11 case and the Account Debtor has in
place either (A) a debtor in possession financing facility available to
the Account Debtor, or (B) a cash collateral order under which the
Administrative Agent determines that the Account Debtor has adequate
availability, in either case in an amount and on other terms reasonably
satisfactory to the Administrative Agent;
(vii) such Receivable is not owing by such Account Debtor in
respect of which 30% or more in face value of the Receivables due from
such Account Debtor or any of its Affiliates are not deemed Eligible
Receivables hereunder by reason of being past due;
(viii) such Receivable is not owing by an Account Debtor whose
then-existing Receivables owing to any of the Borrowers exceed in face
amount 10% of total Eligible Receivables of all of the Borrowers;
PROVIDED, that such Receivables shall not cease to be Eligible
Receivables solely by reason of this clause (viii) except to the extent
of the Receivables in excess of such limits;
(ix) the goods giving rise to such Receivable have been
shipped or delivered or the services giving rise to such Receivable
have been performed by such Borrower, and the Receivable otherwise
represents a final sale or bona fide true lease with respect to such
goods or services;
(x) such Receivable is not subject to any present or
contingent (and no facts exist which are the basis for any future)
offset, deduction or counterclaim, dispute or other defense on the part
of such Account Debtor, to the extent of such offset, deduction,
counterclaim, dispute or other defense;
(xi) such Receivable is evidenced by an invoice, lease,
instrument or other documentation in form reasonably acceptable to the
Agents;
(xii) the Receivable is not subject to any enforceable
prohibition (under applicable law, by contract or otherwise) against
its assignment or requiring notice of or consent to any assignment to
the Administrative Agent, unless all such required notices have been
given, all such required consents have been received and all other
procedures have been complied with such that such Receivable shall have
been duly and validly assigned to the Administrative Agent, for the
benefit of the Banks and the Agents;
(xiii) the goods giving rise to such Receivable were not, at
the time of the sale thereof, subject to any Lien, except Permitted
Liens;
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(xiv) the applicable Borrower is not in breach in any material
respect of any express or implied representation or warranty with
respect to the goods the sale or lease of which gave rise to such
Receivable nor in breach of any representation or warranty, covenant or
other agreement contained in the Loan Documents with respect to such
Receivable;
(xv) such Receivable does not arise out of any transaction
with (A) any creditor, tenant, lessor or supplier of or to any of the
Borrowers, except to the extent of that portion of the Receivable which
is in excess of the amounts owed to such creditor, tenant, lessor or
supplier, or (B) any Affiliate of any of the Borrowers;
(xvi) such Account Debtor with respect to such Receivable is
not located in a state or jurisdiction denying creditors access to its
courts in the absence of qualification to transact business in such
state or the filing of a notice of business activities report or other
similar filing, unless the applicable Borrower (A) may qualify as a
foreign corporation authorized to transact business in such state or
jurisdiction and gain access to such courts, without incurring any cost
or penalty viewed by the Administrative Agent to be significant in
amount, and such later qualification cures any access to such courts to
enforce payment of such Receivable, or (B) has filed such notice or
similar filing with the applicable state or jurisdiction agency for the
then current year; and
(xvii) neither such Account Debtor with respect to such
Receivable, nor such Receivable, is determined by the Administrative
Agent in its reasonable discretion to be ineligible for any other
reason.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by any of the Borrowers or any
ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.9.17.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
any of the Borrowers under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
EVENT OF DEFAULT. See ss.15.1.
FEE LETTER. See ss.6.1.
FILING DATE. As defined in the recitals hereto.
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FINAL ORDER. A final order of the Bankruptcy Court in the Cases
authorizing and approving this Credit Agreement and the other Loan Documents
under Sections 364(c) and 364(d) of the Bankruptcy Code and entered at or after
a final hearing, in form and substance satisfactory to the Agents and the
Agents' Special Counsel and the Borrowers and its counsel. The Final Order
shall, among other things, have:
(i) authorized the transactions contemplated by this Credit
Agreement and the extensions of credit under this Credit Agreement in
an amount not greater than the Total Commitment provided for herein
after entry of the Final Order, and any extension of the scheduled
Termination Date as provided in the definition of the term "Termination
Date";
(ii) authorized the payment by the Borrowers of the Borrowers'
reimbursement obligations in respect of Specified Existing Letters of
Credit becoming reimbursement obligations in respect of this Credit
Agreement;
(iii) granted the claim status and Liens described in ss.8.1,
and prohibited the granting of additional Liens on the assets of the
Borrowers other than Permitted Liens;
(iv) provided that such Liens are automatically perfected by
the entry of the Final Order and also granted to the Administrative
Agent for the benefit of the Administrative Agent and the Banks relief
from the automatic stay of Section 362(a) of the Bankruptcy Code to
enable the Administrative Agent, if the Administrative Agent elects to
do so in its discretion, to make all filings and recordings and to take
all other actions considered necessary or advisable by the
Administrative Agent to perfect, protect and insure the priority of its
Liens upon the Collateral as a matter of nonbankruptcy law;
(v) authorized the use of cash collateral in accordance with
the terms of this Credit Agreement;
(vi) as adequate protection for any diminution in value
resulting from the use, sale or lease of the collateral and the priming
of Liens securing the Prepetition Lender Debt, (A) authorized the
payment of (1) monthly interest on the loans and letter of credit
obligations, and letter of credit fees, under the Prepetition Credit
Agreement and (2) the payment of any out-of-pocket expense
reimbursements owing on or after the Filing Date to the Prepetition
Agents under the Prepetition Credit Agreement and (B) granted to the
Prepetition Lenders Superpriority Claim status and security interests
and other Liens junior to those granted to the Banks pursuant to
ss.8.1;
(vii) PROVIDED FOR THE PRESERVATION OF CERTAIN CHALLENGES TO
THE PREPETITION LENDER DEBT AND THE LIENS SECURING THE PREPETITION
LENDER DEBT BUT SUBJECT TO THE REQUIREMENT THAT ANY SUCH CHALLENGES BE
COMMENCED (A) BY THE CREDITORS' COMMITTEE NO LATER THAN THE DATE WHICH
FALLS ON THE 120TH DAY FOLLOWING THE APPOINTMENT OF THE CREDITORS'
COMMITTEE (OR IF SUCH DAY IS NOT A BUSINESS DAY, ON THE NEXT SUCCEEDING
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BUSINESS DAY), AND (B) BY ANY PARTY IN INTEREST OTHER THAN THE
CREDITORS' COMMITTEE NO LATER THAN THE DATE WHICH FALLS ON THE 75TH DAY
FOLLOWING THE FILING DATE (OR IF SUCH DAY IS NOT A BUSINESS DAY, ON THE
NEXT SUCCEEDING BUSINESS DAY); AND
(viii) PROVIDED THAT THE COLLATERAL AND THE COLLATERAL
SECURING THE PREPETITION LENDER DEBT SHALL NOT BE CHARGED UNDER SECTION
506(C) OF THE BANKRUPTCY CODE, AND THAT THE PREPETITION ADMINISTRATIVE
AGENT'S LIEN ON ANY PROCEEDS, PRODUCTS OR PROFITS OF COLLATERAL
SECURING THE PREPETITION LENDER DEBT AT THE TIME OF THE COMMENCEMENT OF
THE CASES SHALL NOT BE SUBJECT TO BEING CUT OFF BASED ON THE "EQUITIES
OF THE CASE" UNDER SECTION 552(B) OF THE BANKRUPTCY CODE.
FRONTING FEE. See ss.4.6.
FTI/P&M. FTI/▇▇▇▇▇▇▇▇ & ▇▇▇▇▇.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (i) When used in ss.12,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
each of the Borrowers reflected in its financial statements for the year ended
on the Balance Sheet Date, and (ii) when used in general, other than as provided
above, means principles that are (A) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time, and (B) consistently applied with past financial
statements of the Borrowers adopting the same principles, PROVIDED that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by any of the Borrowers
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
HAZARDOUS SUBSTANCES. See ss.9.17.
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
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(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized
Lease,
(vi) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(ix) every obligation of such Person under or in respect of a
Derivative Transaction,
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
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acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (A) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser thereof, excluding amounts
representative of yield or interest earned on such investment, (x) any synthetic
lease shall be the stipulated loss value, termination value or other equivalent
amount, (y) any Derivative Transaction shall be the maximum amount of any
termination or loss payment required to be paid by such Person if such
derivative contract were, at the time of determination, to be terminated by
reason of any event of default or early termination event thereunder, whether or
not such event of default or early termination event has in fact occurred and
(z) any equity related purchase obligation shall be the maximum fixed redemption
or purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price.
INELIGIBLE PROFESSIONAL EXPENSES. Fees or expenses incurred by any
Person, including the Creditors' Committee, in (A) preventing, hindering or
delaying the Banks' or the Agents' enforcement or realization upon any of the
Collateral once the Termination Declaration Date has occurred, (B) using cash
collateral or selling any other Collateral without the Agents' consent (except
to the extent permitted by this Credit Agreement), (C) incurring Indebtedness
without the Administrative Agent's consent (except to the extent permitted by
this Credit Agreement) and (D) objecting to or contesting in any manner, or in
raising any defenses to, the validity, extent, perfection, priority or
enforceability of the Prepetition Lender Debt or the Obligations or any
mortgages, liens or security interests with respect thereto or any other rights
or interests of the Agents and the Banks, or in asserting any claims or causes
of action, including, without limitation, Avoidance Actions or equitable
subordination claims against the Agents or the Banks. The term does not include
fees or expenses incurred to investigate such matters or litigation respecting
whether an Event of Default has occurred.
INTEREST PAYMENT DATE. As to each Loan, the first Business Day of each
calendar month following the Drawdown Date of such Loan.
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INTERIM ORDER. An order of the Bankruptcy Court in the Cases
authorizing and approving this Credit Agreement on an interim basis under
Sections 364(c) and 364(d) of the Bankruptcy Code and entered at a preliminary
hearing under Bankruptcy Rule 4001, in form and substance satisfactory to the
Administrative Agent, the Agents' Special Counsel, and the Borrowers and its
counsel. The Interim Order shall, among other things, have
(i) authorized the loan and letter of credit transactions
contemplated by this Credit Agreement and the extensions of credit
under this Credit Agreement in an amount not greater than the Total
Commitment prior to the entry of the Final Order;
(ii) granted the claim status and Liens described in ss.8.1,
and prohibited the granting of additional Liens on the assets of the
Borrowers other than Permitted Liens;
(iii) provided that such Liens are automatically perfected by
the entry of the Interim Order and also granted to the Administrative
Agent for the benefit of the Administrative Agent and the Banks, relief
from the automatic stay of Section 362(a) of the Bankruptcy Code to
enable the Administrative Agent, if the Administrative Agent elects to
do so in its discretion, to make all filings and recordings and to take
all other actions considered necessary or advisable by the
Administrative Agent to perfect, protect and insure the priority of its
Liens upon the Collateral as a matter of nonbankruptcy law;
(iv) permitted the use of cash collateral in accordance with
the terms of this Credit Agreement; and
(v) as adequate protection for any diminution in value
resulting from the use, sale or lease of the Collateral and the priming
of Liens securing the Prepetition Lender Debt, (A) authorized the
payment of (1) monthly interest on the loans and letter of credit
obligations, and letter of credit fees, under the Prepetition Credit
Agreement and (2) the payment of any out-of-pocket expense
reimbursements owing on or after the Filing Date to the Prepetition
Agents under the Prepetition Credit Agreement and (B) granted to the
Prepetition Lenders Superpriority Claim status and security interests
and other Liens junior to those granted to the Banks pursuant to
ss.8.1.
INVENTORY. All "inventory," as such term is defined in Section 9-102(a)
of the UCC, leased by any Borrower or held by any Borrower for sale or lease.
The term includes used goods as well as new goods.
INVENTORY DECLINE REPAYMENT. See ss.3.2(b).
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person.
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In determining the aggregate amount of Investments outstanding at any particular
time: (i) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (iii)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise; and
(iv) there shall not be deducted from the aggregate amount of Investments any
decrease in the value thereof.
ISSUING BANK. As defined in the preamble hereto.
LETTER(S) OF CREDIT. Collectively, the letters of credit issued
pursuant to ss.4 and the letters of credit issued and outstanding under the
Prepetition Credit Agreement.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT FEE. See ss.4.6.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LIENS. Any lien, encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any entity or person.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Fee Letter, the
Letters of Credit, the Letter of Credit Applications, and the Security
Documents.
LOAN REQUEST. See ss.2.6.
LOANS. The Loans made or to be made by the Banks to the Borrowers
pursuant toss.2.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may, at the time of reference thereto, draw under outstanding
Letters of Credit, as such aggregate amount may be reduced from time to time
pursuant to the terms of the Letters of Credit.
MORTGAGES. The several mortgages and/or deeds of trust from time to
time granted by certain of the Borrowers to the Administrative Agent with
respect to the fee or leasehold interests of the Borrowers in any Real Estate at
any time owned or leases (as lessee) by any of the Borrowers. The Mortgages
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning
ofss.3(37) of ERISA maintained or contributed to by any of the Borrowers or any
ERISA Affiliate.
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NET CASH PROCEEDS. With respect to any sale or other disposition of
assets of any of the Borrowers, the cash proceeds received by such Borrower from
such sale or other disposition, net of all reasonable costs of sale or other
disposition and property transfer or sales taxes paid or payable as a result
thereof by such Borrower, and with respect to the incurrence of any
Indebtedness, the cash proceeds received from such incurrence, net of all
reasonable costs thereof and reasonable fees and all expenses payable in
connection therewith by the Borrowers. The term does not include rental payments
received by a Borrower on Inventory leased by the Borrower in the ordinary
course of its business consistent with past practices.
NOTE RECORD. A Record with respect to a Note.
NOTES. See ss.2.4.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrowers to any of the Banks and the Agents, individually or collectively,
existing on the date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents or in respect of any of the Loans made or Reimbursement
Obligations incurred or any of the Notes, Letter of Credit Applications, Letters
of Credit, or other instruments at any time evidencing any thereof or any of the
Orders.
ORDERS. The Final Order and, if any, the Interim Order.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PARENT. As defined in the preamble hereto.
PBGC. The Pension Benefit Guaranty Corporation created byss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.11.2.
PERMITTED PRIOR LIENS. Valid, perfected and otherwise unavoidable Liens
existing as of the Filing Date, senior to the prepetition Liens in respect of
the Prepetition Credit Agreement, and Liens otherwise approved in writing by the
Agents.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PLEDGE AGREEMENTS. The several Pledge Agreements entered or to be
entered into by each of the Borrowers in favor of the Administrative Agent with
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respect to the capital stock or other equity interests of the Borrowers. The
Pledge Agreements shall be in form and substance reasonably satisfactory to the
Administrative Agent.
PREPETITION ADMINISTRATIVE AGENT. As defined in the recitals hereto.
PREPETITION AGENTS. As defined in the recitals hereto.
PREPETITION BORROWERS. As defined in the recitals hereto.
PREPETITION CREDIT AGREEMENT. As defined in the recitals hereto.
PREPETITION LENDER DEBT. All of the "Obligations" under and as defined
in the Prepetition Credit Agreement.
PREPETITION LENDERS. As defined in the recitals hereto.
PREPETITION REVOLVER. As defined in the recitals hereto.
PRIORITY PROFESSIONAL EXPENSES. At the time of reference thereto,
allowed and unpaid fees, costs and reasonable expenses of professionals retained
in the Cases pursuant to Sections 327 and 1103 of the Bankruptcy Code consisting
of attorneys, accountants, financial advisors, and consultants retained by the
Borrowers or the Creditors' Committee; PROVIDED, HOWEVER, that the amount of
Priority Professional Expenses shall not exceed the applicable Professional
Expense Cap if in effect at the time of reference thereto. The term does not
include any Ineligible Professional Expenses or the expenses of any
professionals engaged by individual members of the Creditors' Committee.
PROFESSIONAL EXPENSE CAP. If, at the time of reference thereto, the
Termination Declaration Date has not occurred, there is no Professional Expense
Cap. If, at the time of reference thereto, the Final Order has not been entered
and the Termination Declaration Date has occurred, the Professional Expense Cap
is the aggregate sum of $1,000,000, whether the fees and expenses are allowed
and unpaid at the time of the Termination Declaration Date or are incurred
before or after the Termination Declaration Date. If, at the time of reference
thereto, the Final Order has been entered and the Termination Declaration Date
has occurred, the Professional Expense Cap is the aggregate sum of $3,500,000,
whether the fees and expenses are allowed and unpaid at the time of the
Termination Declaration Date or are incurred before or after the Termination
Declaration Date. The term includes any holdbacks required by the Bankruptcy
Court. All payments of Priority Professional Expenses made on and after the
Termination Declaration Date shall reduce the Professional Expense Cap dollar
for dollar.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrowers.
RECEIVABLES. With respect to any Person, all of the "accounts,"
"chattel paper" and "instruments" of such Person (as such terms are defined in
Section 9-102(a) of the UCC) whether or not such Receivable has been earned by
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performance, whether now existing or hereafter arising. The term includes all
(a) rights to payment created by or arising from such Person's sale or lease of
goods or rendition of services; (b) unpaid seller's or lessor's rights
(including rescission, replevin, reclamation, stoppage in transit or other
analogous rights under applicable law) relating to the foregoing or arising
therefrom; (c) rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (d) reserves and credit balances held
by such Person with respect to any such Receivables or any Account Debtor; (e)
supporting obligations or collateral for any of the foregoing; and (f) insurance
policies or rights relating to any of the foregoing.
RECORD. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REGISTER. See ss.20.3.
REIMBURSEMENT OBLIGATION. The Borrowers' joint and several obligation
to reimburse the Issuing Bank and the other Banks on account of any drawing
under any Letter of Credit as provided in ss.4.2.
REORGANIZATION PLAN. A plan or plans of reorganization in the Cases.
REQUIRED BANKS. As of any date, the Banks whose Credit Exposure
constitutes at least fifty one percent (51%) of the aggregate Credit Exposure of
all the Banks.
RESERVES. As determined by the Agents, such amounts as the Agents may
from time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do, or, in the reasonable and good faith opinion of
the Agents, are reasonably likely to, affect adversely the attachment,
perfection, priority or ability of the Administrative Agent to enforce (whether
by collection or otherwise) the Administrative Agent's Lien on the Receivables
or (b) to reflect the good faith belief of the Agents that any Borrowing Base
Certificate is or may have been incomplete, inaccurate or misleading in any
material respect. Reserves may include, but are not limited to up to the sum of
$3,500,000 in respect of the Carve Out and any taxes and other governmental
charges having priority over the Administrative Agent's Lien on the Receivables.
SECURITY AGREEMENT. The Security Agreement, dated on or about the
Closing Date, entered or to be entered into among the Administrative Agent and
the Borrowers. The Security Agreement shall be in form and substance reasonably
satisfactory to the Administrative Agent.
SECURITY DOCUMENTS. Collectively, the Security Agreement, the Agency
Account Agreements, the Mortgages, the Trademark Assignments, the Pledge
Agreements.
SENIOR EXECUTIVE OFFICER. The chief financial officer or other senior
executive officer of the Parent.
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SETTLEMENT. The making or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Loans (after giving effect to any Loan
Request) to be equal to such Bank's Commitment Percentage of the outstanding
amount of such Loans (after giving effect to any Loan Request), in any case
where, prior to such event or action, the actual share is not so equal.
SETTLEMENT AMOUNT. See ss.2.9.1.
SETTLEMENT DATE. (a) The Drawdown Date relating to any Loan Request,
(b) at the option of the Administrative Agent, Monday of each week, or if a
Monday is not a Business Day, the Business Day immediately following such
Monday, or (c) at the option of the Administrative Agent, any other Business
Day.
SETTLING BANK. See ss.2.9.1.
SPECIFIED EXISTING LETTER OF CREDIT. A letter of credit issued pursuant
to the Prepetition Credit Agreement and which, on the date of the commencement
of the Cases, either (i) has a scheduled expiration date falling on or after
March 15, 2002, or (ii) provides by its terms for the beneficiary to draw under
the letter of credit if the letter of credit is not extended to a date later
than the letter of credit's then scheduled expiration date.
SPECIFIED RESALE INVENTORY. Inventory held by a Borrower for resale in
the ordinary course of such Borrower's business consistent with past practices.
SUBORDINATED DEBT. Unsecured Indebtedness of the Parent or a Subsidiary
of the Parent that is expressly subordinated and made junior to the payment and
performance in full of the Obligations or the Prepetition Lender Debt.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
SUPERPRIORITY CLAIM. A claim against a Borrower or its estate in its
Case which is an administrative expense claim having priority over (i) any and
all allowed administrative expenses and (ii) unsecured claims now existing or
hereafter arising, including, without limitation, administrative expenses of the
kind specified in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code.
SWING BANK. As defined in the preamble hereto.
SWING LINE LOANS. Loans made pursuant toss.2.8.
SYNDICATION AGENT. As defined in the preamble hereto.
TERMINATION DATE. The earlier to occur of (i) December 18, 2002, and
(ii) the effective date of a Reorganization Plan that has been confirmed by an
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order of the Bankruptcy Court. The date referred to in the foregoing clause (i)
may, in the sole discretion of the Agents and the Required Banks, be extended
one or more times to a date no later than June 18, 2003. In connection with any
such extension, the Agents and the Required Banks may require such additional
financial information under ss.10.4 and such amendments to ss.12 of this Credit
Agreement as may in their discretion be necessary or advisable to provide for
such extension. The Agents may also require other amendments to this Credit
Agreement that are coordinate amendments to reflect such extension and which do
not increase the obligations of the Borrowers or decrease the rights of the
Borrowers in any material respect from the obligations and rights of the
Borrowers provided for in this Credit Agreement prior to such extension.
TERMINATION DECLARATION DATE. The earliest to occur of (i) the date on
which the Administrative Agent declares all Obligations to be due and payable on
account of an Event of Default, (ii) the date on which the Administrative Agent
declares a termination of the Commitments on account of an Event of Default, and
(iii) the Termination Date.
TOTAL COMMITMENT. An aggregate outstanding amount not to exceed (i)
prior to the entry of the Final Order, the sum of $20,000,000, and (ii) on and
after (A) the entry of the Final Order, (B) the implementation of the cash
management arrangements set forth in ss.10.13, (C) the hiring on an interim
president and chief restructuring officer as set forth in ss.10.18, (D) the
satisfaction of any condition that has been deferred and waived in the
discretion of the Administrative Agent pursuant to the last paragraph of ss.13,
(E) the assignment by Fleet National Bank pursuant to ss.20 of at least
$27,500,000 of the Total Commitment to an Eligible Assignee acceptable to the
Administrative Agent in its discretion, and (F) the execution and delivery by
the Borrowers of new Notes to the Banks in an aggregate face amount of
$55,000,000, the sum of $55,000,000. If the Commitments are terminated pursuant
to the provisions of this Credit Agreement, the Total Commitment shall be zero.
TRADEMARK ASSIGNMENTS. The several Trademark Assignments made or to be
made by certain of the Borrowers in favor of the Administrative Agent. The
Trademark Agreement shall be in form and substance reasonably satisfactory to
the Administrative Agent.
UNIFORM CUSTOMS. With respect to (i) any documentary or standby Letter
of Credit, the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 or (ii) any
standby Letter of Credit, International Standby Practices (ISP 98) as
promulgated by the Institute of International Banking Law & Practice, Inc., or,
in each case, any successor version thereto adopted by the Issuing Bank in the
ordinary course of its business as a letter of credit issuer and in effect at
the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Issuing Bank and the Banks on the date
specified in, and in accordance with, ss.4.2.
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VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, restated, modified or
supplemented from time to time in accordance with its terms and the
terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
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same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agents and the Borrowers and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agents or any of the Banks merely on account of
such Agent's or any Bank's involvement in the preparation of such
documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrowers as joint and several borrowers, and the Borrowers may on a joint and
several basis borrow, repay, and reborrow, from time to time from the Closing
Date up to but not including the Termination Date upon notice by the Borrowers
to the Administrative Agent given in accordance with ss.2.6, such sums as are
requested by the Borrowers up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment MINUS such Bank's Commitment Percentage of the sum of the Maximum
Drawing Amount of all Letters of Credit and all Unpaid Reimbursement
Obligations, PROVIDED that the sum of the outstanding amount of the Loans (after
giving effect to all amounts requested) PLUS the Maximum Drawing Amount of all
Letters of Credit and all Unpaid Reimbursement Obligations shall not at any time
exceed the least of (i) the Total Commitment in effect at such time MINUS the
Commitment Reserve, (ii) the Borrowing Base and (iii) the amount approved to be
borrowed by way of Loans and Letters of Credit in the Interim Order or the Final
Order, whichever is then in effect. The Loans shall be made PRO RATA in
accordance with each Bank's Commitment Percentage. Each request for a Loan
hereunder shall constitute a representation and warranty by each of the
Borrowers that the conditions set forth in ss.13 and ss.14, in the case of the
initial Loans to be made on the Closing Date, and ss.14, in the case of all
other Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrowers jointly and severally agree to pay
to the Administrative Agent for the accounts of the Banks in accordance with
their respective Commitment Percentages a commitment fee equal to one-half of
one percent (0.50%) per annum on the average daily amount during each calendar
month or portion thereof from the Closing Date to the Termination Date by which
the Total Commitment MINUS the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Loans during such
calendar month. The commitment fee shall be payable monthly in arrears on the
first Business Day of each calendar month for the immediately preceding calendar
month, commencing on the first such date following the Closing Date, with a
final payment on the Termination Date or any earlier date on which the
Commitments shall terminate.
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2.3. REDUCTION OF TOTAL COMMITMENT.
(a) OPTIONAL. The Borrowers shall have the right at any time
and from time to time upon two (2) Business Days prior written notice
to the Administrative Agent to reduce by $500,000 or an integral
multiple thereof, or terminate entirely, the Total Commitment,
whereupon the Commitments of the Banks shall be reduced PRO RATA in
accordance with their respective Commitment Percentages of the amount
specified in such notice or, as the case may be, terminated. Promptly
after receiving any notice of the Borrowers delivered pursuant to this
ss.2.3, the Administrative Agent will notify the Banks of the substance
thereof.
(b) MANDATORY. The Total Commitment shall also be reduced (i)
concurrently with the application of Net Cash Proceeds pursuant to
ss.2.10.2(b)(i) or (iii) by the amount of such Net Cash Proceeds, (ii)
on November 30, 2002, by the sum of $5,000,000 and (iii) as provided in
ss.15.4(a)(v).
(c) GENERAL. Contemporaneously with any such reduction, the
Commitments of the Banks shall be reduced PRO RATA in accordance with
their respective Commitment Percentages of the total amount of such
reduction. Upon the effective date of any such reduction or upon the
termination of the Total Commitment, the Borrowers shall pay to the
Administrative Agent for the respective accounts of the Banks, in
accordance with their Commitment Percentages, the full amount of any
commitment fee then accrued on the amount of the reduction or, as the
case may be, termination. No reduction or termination of the
Commitments may be reinstated, without the consent of the Required
Banks.
2.4. THE NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrowers in substantially the form of EXHIBIT A hereto (each a
"NOTE"), dated as of the Closing Date and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Loans made
by such Bank, plus interest accrued thereon, as set forth below. The Borrowers
irrevocably authorize each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Note, an appropriate notation on such Bank's Note
Record reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Loans set forth on such Bank's Note
Record shall be PRIMA FACIE evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Note Record shall not limit or otherwise affect
the joint and several obligations of the Borrowers hereunder or under any Note
to make payments of principal of or interest on any Note when due.
2.5. INTEREST ON LOANS. Except as otherwise provided in ss.7.5, each
Loan shall bear interest commencing with the Drawdown Date thereof and ending on
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the date such Loan is repaid, at the rate per annum equal to the Base Rate PLUS
2.50%, which shall be payable monthly, in cash, on each Interest Payment Date
and on the Termination Date.
2.6. REQUESTS FOR LOANS. The Borrowers shall give to the Administrative
Agent written notice in the form of EXHIBIT B hereto (or telephonic notice
confirmed in a writing in the form of EXHIBIT B hereto) of each Loan requested
hereunder (a "LOAN REQUEST") not later than 12:00 noon (Boston, Massachusetts
time) on the proposed Drawdown Date of any Loan (which must be a Business Day).
Each such notice shall be signed by a Senior Executive Officer of the Parent and
shall specify (A) the principal amount of the Loan requested and (B) the
proposed Drawdown Date of such Loan. Promptly upon receipt of any such notice,
the Administrative Agent shall notify each of the Banks thereof. Each Loan
Request shall be irrevocable and binding on the Borrowers and shall obligate the
Borrowers to accept the Loan requested from the Banks on the proposed Drawdown
Date. Each Loan Request shall be in a minimum aggregate amount of $500,000 or an
integral multiple thereof.
2.7. FUNDS FOR LOANS.
2.7.1. FUNDING PROCEDURES. Not later than 1:00 p.m. (Boston,
Massachusetts time) on the proposed Drawdown Date of any Loans, each of
the Banks will make available to the Administrative Agent, at the
Administrative Agent's Office, in immediately available funds, the
amount of such Bank's Commitment Percentage of the amount of the
requested Loans. Upon receipt from each Bank of such amount, and upon
receipt of the documents required by ss.ss.13 and 14 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Administrative Agent will make available to the
Borrowers the aggregate amount of such Loans made available to the
Administrative Agent by the Banks. The failure or refusal of any Bank
to make available to the Administrative Agent at the aforesaid time and
place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Administrative Agent the
amount of such other Bank's Commitment Percentage of any requested
Loans.
2.7.2. ADVANCES BY AGENT. The Administrative Agent may, unless
notified to the contrary by any Bank prior to a Drawdown Date, assume
that such Bank has made available to the Administrative Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the
Loans to be made on such Drawdown Date, and the Administrative Agent
may (but it shall not be required to), in reliance upon such
assumption, make available to the Borrowers a corresponding amount. If
any Bank makes available to the Administrative Agent such amount on a
date after such Drawdown Date, such Bank shall pay to the
Administrative Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below,
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of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day
included in such period, TIMES (ii) the amount of such Bank's
Commitment Percentage of such Loans, TIMES (iii) a fraction, the
numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Loans shall become immediately available
to the Administrative Agent, and the denominator of which is 365. A
statement of the Administrative Agent submitted to such Bank with
respect to any amounts owing under this paragraph shall be PRIMA FACIE
evidence of the amount due and owing to the Administrative Agent by
such Bank. If the amount of such Bank's Commitment Percentage of such
Loans is not made available to the Administrative Agent by such Bank
within three (3) Business Days following such Drawdown Date, the
Administrative Agent shall be entitled to recover such amount from the
Borrowers on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
2.8. SWING LINE. Notwithstanding the notice and minimum amount
requirements set forth in ss.2.6 but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Administrative Agent may, in its sole
discretion and without conferring with the Banks, make Loans to the Borrowers
(i) by entry of credits to the Borrowers' Concentration Account with the
Administrative Agent to cover checks or other charges which the Borrowers have
drawn or made against such account or (ii) in an amount as otherwise requested
by the Borrowers. The aggregate principal amount of Loans made pursuant to this
ss.2.8 shall not, at any time, exceed $10,000,000. The Borrowers hereby request
and authorize the Administrative Agent to make from time to time such Loans by
means of appropriate entries of such credits sufficient to cover checks and
other charges then presented for payment from the Concentration Account or as
otherwise so requested by the Borrowers. The Borrowers acknowledge and agree
that the making of such Loans shall, in each case, be subject in all respects to
the provisions of this Credit Agreement as if they were Loans covered by a Loan
Request including, without limitation, the limitations set forth in ss.2.1 and
the requirements that the applicable provisions of ss.14 be satisfied. All
actions taken by the Administrative Agent pursuant to the provisions of this
ss.2.8 shall be conclusive and binding on the Borrowers and the Banks. Interest
on Loans made pursuant to this ss.2.8 shall, prior to a Settlement, be for the
account of the Administrative Agent.
2.9. SETTLEMENTS.
2.9.1. GENERAL. On each Settlement Date, the Administrative
Agent may, not later than 12:00 noon (Boston, Massachusetts time), give
telephonic or facsimile notice (i) to the Banks and the Borrowers of
the respective outstanding amount of Loans made by the Administrative
Agent on behalf of the Banks from the immediately preceding Settlement
Date through the close of business on the prior day and the amount of
any Loans to be made (following the giving of notice pursuant to
ss.2.6) on such date pursuant to a Loan Request and (ii) to the Banks
of the amount (a "SETTLEMENT AMOUNT") that each Bank (a "SETTLING
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BANK") shall pay to effect a Settlement of any Loan. A statement of the
Administrative Agent submitted to the Banks and the Borrowers or to the
Banks with respect to any amounts owing under this ss.2.9 shall be
PRIMA FACIE evidence of the amount due and owing. Notwithstanding the
notice and minimum amount requirements set forth in ss.2.6, each
Settling Bank shall, not later than 3:00 p.m. (Boston, Massachusetts
time) on such Settlement Date, effect a wire transfer of immediately
available funds to the Administrative Agent in the amount of the
Settlement Amount for such Settling Bank. All funds advanced by any
Bank as a Settling Bank pursuant to this ss.2.9 shall for all purposes
be treated as a Loan made by such Settling Bank to the Borrowers and
all funds received by any Bank pursuant to this ss.2.9 shall for all
purposes be treated as repayment of amounts owed with respect to Loans
made by such Bank. In the event that a Settling Bank is prevented from
making any Loan to effect a Settlement as contemplated hereby, such
Settling Bank will make such dispositions and arrangements with the
other Banks with respect to such Loans, either by way of purchase of
participations, distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Bank's share of the
outstanding Loans being equal, as nearly as may be, to such Bank's
Commitment Percentage of the outstanding amount of the Loans.
2.9.2. FAILURE TO MAKE FUNDS AVAILABLE. If any Settling Bank
makes available to the Administrative Agent its Settlement Amount on a
date after such Settlement Date, such Settling Bank shall pay to the
Administrative Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below,
of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day
included in such period, times (ii) the amount of such Settlement
Amount, times (iii) a fraction, the numerator of which is the number of
days that elapse from and including such Settlement Date to the date on
which the amount of such Settlement Amount shall become immediately
available to the Administrative Agent, and the denominator of which is
365. A statement of the Administrative Agent submitted to such Settling
Bank with respect to any amounts owing under this ss.2.9.2 shall be
PRIMA FACIE evidence of the amount due and owing to the Administrative
Agent by such Settling Bank. If such Settling Bank's Settlement Amount
is not made available to the Administrative Agent by such Settling Bank
within three (3) Business Days following such Settlement Date, the
Administrative Agent shall be entitled to recover such amount from the
Borrowers on demand, with interest thereon at the rate per annum
applicable to the Loans as of such Settlement Date.
2.9.3. NO EFFECT ON OTHER BANKS. The failure or refusal of any
Settling Bank to make available to the Administrative Agent at the
aforesaid time and place on any Settlement Date the amount of such
Settling Bank's Settlement Amount shall not (i) relieve any other
Settling Bank from its several obligations hereunder to make available
to the Administrative Agent the amount of such other Settling Bank's
Settlement Amount or (ii) impose
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upon any Bank, other than the Settling Bank so failing or refusing, any
liability with respect to such failure or refusal or otherwise increase
the Commitment of such other Bank.
2.10. REPAYMENTS OF LOANS PRIOR TO TERMINATION DECLARATION DATE.
2.10.1. CREDIT FOR FUNDS RECEIVED IN CONCENTRATION ACCOUNT.
Prior to the occurrence of the Termination Declaration Date, (i) all
funds and cash proceeds in the form of money, checks and like items
received in the Concentration Account shall be credited, on the same
Business Day on which the Administrative Agent determines that
immediately available funds have been received and applied as
contemplated by ss.2.10.2, (ii) all funds and cash proceeds in the form
of a wire transfer received in the Concentration Account shall be
credited on the same Business Day as the Administrative Agent's receipt
of such amounts (or up to such later date as the Administrative Agent
determines that collected funds have been received and are immediately
available), and applied as contemplated by ss.2.10.2, and (iii) all
funds and cash proceeds in the form of an automated clearing house
transfer received in the Concentration Account shall be credited, on
the next Business Day following the Administrative Agent's receipt of
such amounts (or up to such later date as the Administrative Agent
determines that collected funds have been received and are immediately
available), and applied as contemplated by ss.2.10.2. For purposes of
the foregoing provisions of this ss.2.10.1, the Administrative Agent
shall not be deemed to have received any such funds or cash proceeds on
any day unless received by the Administrative Agent before 2:30 p.m.
(Boston, Massachusetts time) on such day. The Borrowers further
acknowledge and agree that any provisional credits or credits in
respect of wire or automatic clearing house funds transfers that may be
granted shall be subject to reversal if final collection in good funds
of the related item is not received by, or final settlement of the
funds transfer is not made in favor of, the Administrative Agent in
accordance with the Administrative Agent's customary procedures and
practices for collecting provisional items or receiving settlement of
funds transfers.
2.10.2. APPLICATION OF PAYMENTS PRIOR TO TERMINATION
DECLARATION DATE.
(a) Prior to the occurrence of the Termination Declaration
Date, and except as otherwise provided in ss.2.10.2(b), all funds
transferred to the Concentration Account and for which the Borrowers
have received credits, and all Net Cash Proceeds of Specified Resale
Inventory, shall be applied to the Obligations as follows:
(i) first, if on a Settlement Date, to pay interest
then due and payable on, and then principal of, the Swing Line
Loans;
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(ii) SECOND, TO PAY (A) interest on the Loans (other
than the Swing Line Loans) then due and payable and any other
Obligations (other than principal on the Swing Line Loans)
then due and payable, and (B) IF NO DEFAULT OR EVENT OF
DEFAULT HAS OCCURRED AND IS THEN CONTINUING, THE NON-DEFAULT
RATE INTEREST PORTION OF THE PREPETITION REVOLVER AND THE TERM
LOAN, LETTER OF CREDIT FEES AND ANY OUT-OF-POCKET EXPENSES
OWING ON OR AFTER THE FILING DATE TO THE PREPETITION AGENTS
UNDER THE PREPETITION CREDIT AGREEMENT, THEN DUE AND OWING;
(iii) THIRD, TO PRINCIPAL OF THE PREPETITION
INDEBTEDNESS UP TO THE AMOUNT OF ANY INVENTORY DECLINE
REPAYMENT THEN DUE AND OWING;
(iv) FOURTH, TO PRINCIPAL OF THE PREPETITION
INDEBTEDNESS UP TO THE AMOUNT OF ANY ASSET DISPOSITION
REPAYMENT THEN DUE AND OWING;
(v) fifth, to reduce the principal of Loans (other
than the Swing Line Loans);
(vi) sixth, if a Default or Event of Default has
occurred and is then continuing, to cash collateralize
outstanding Letters of Credit in an amount equal to 105% of
the Maximum Drawing Amount thereof; and
(viii) SEVENTH, IF A DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS THEN CONTINUING, ANY NON-DEFAULT RATE INTEREST
PORTION OF THE PREPETITION REVOLVER AND THE TERM LOAN, LETTER
OF CREDIT FEES AND ANY OUT-OF-POCKET EXPENSE REIMBURSEMENTS
OWING ON OR AFTER THE FILING DATE TO THE PREPETITION AGENTS
UNDER THE PREPETITION CREDIT AGREEMENT, THEN DUE AND OWING;
AND
(viii) eighth, to the Concentration Account.
(b) Prior to the occurrence of the Termination Declaration
Date, and except as otherwise provided in ss.2.10.2(c), any funds in
the Concentration Account, or otherwise received by the Administrative
Agent, constituting the Net Cash Proceeds of Collateral other than
Specified Resale Inventory, shall be applied as follows:
(i) FIRST, to reduce the principal of the Loans and
pay any Unpaid Reimbursement Obligations in an amount equal to
the amount by which the aggregate amount of the principal of
the Loans and the Unpaid Reimbursement Obligations exceeds the
Borrowing Base;
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(ii) SECOND, TO REPAY THE PRINCIPAL OF THE
PREPETITION REVOLVER AND THE TERM LOAN;
(iii) THIRD, to reduce the principal of the Loans;
and
(iv) FOURTH, as provided inss.2.10.2(a).
(c) In the event that the Borrowers are not able to determine
whether funds in the Concentration Account or otherwise received by the
Administrative Agent constitute Net Cash Proceeds of Collateral other
than Specified Resale Inventory, the Administrative Agent shall be
entitled to assume that the funds are not Net Cash Proceeds of
Collateral other than Specified Resale Inventory and shall apply such
funds as provided for in ss.2.10.2(a).
(d) All prepayments of the Loans pursuant to this ss.2.10.2,
other than the prepayment of the Swing Line Loans, shall be allocated
among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of Loans outstanding owing to the
Banks, with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion. Prior to any
Settlement Date, however, all prepayments of the Loans shall be applied
in accordance with this ss.2.10.2, first to outstanding Swing Line
Loans advanced by the Administrative Agent.
2.11. REPAYMENTS OF LOANS AFTER TERMINATION DECLARATION DATE. Following
the occurrence of the Termination Declaration Date, all funds transferred to the
Concentration Account and for which the Borrowers have received credits, and all
other collections, Inventory Decline Repayments, Asset Disposition Repayments
and Net Cash Proceeds, shall be applied to the Obligations in accordance with
ss.15.4.
3. REPAYMENT OF THE LOANS.
3.1. MATURITY. The Borrowers jointly and severally promise to pay on
the Termination Date, and there shall become absolutely due and payable on the
Termination Date, all of the Loans outstanding on such date, together with any
and all accrued and unpaid interest thereon.
3.2. MANDATORY REPAYMENTS OF LOANS AND PREPETITION LENDER DEBT.
(a) If at any time the sum of the aggregate outstanding amount
of the Loans, the Maximum Drawing Amount of all Letters of Credit and
all Unpaid Reimbursement Obligations exceeds the least of (i) the Total
Commitment in effect at such time MINUS the Commitment Reserve, (ii)
the Borrowing Base or (iii) the amount approved to be borrowed by way
of Loans and Letters of Credit in the Interim Order or the Final Order,
whichever is then in effect, then the Borrowers shall immediately pay
the amount of such excess to the Administrative Agent for the
respective accounts of the Banks for application; FIRST, to pay
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principal of Loans advanced by the Administrative Agent pursuant to
ss.2.8; SECOND, to any Unpaid Reimbursement Obligations; THIRD, to pay
the principal of Loans (other than Loans advanced by the Administrative
Agent pursuant to ss.2.8); and FOURTH, to provide the Administrative
Agent cash collateral for Reimbursement Obligations as contemplated by
ss.4.2(b) and (c). Each payment of Unpaid Reimbursement Obligations or
prepayment of Loans shall be allocated among the Banks, in proportion,
as nearly as practicable, to each Reimbursement Obligation or (as the
case may be) the respective unpaid principal amount of each Bank's
Note, with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion.
(b) PRIOR TO THE DECLARATION TERMINATION DATE, IN THE EVENT
THAT ANY QUARTERLY CONSOLIDATED BALANCE SHEET OF THE BORROWERS
DELIVERED TO THE BANKS AFTER THE DELIVERY OF THE BORROWERS' AUDITED
CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDING DECEMBER 31, 2001, SHOWS
A DECLINE IN THE VALUE OF SUCH INVENTORY IN EXCESS OF 25% FROM THE
VALUE OF SUCH INVENTORY SHOWN ON SUCH AUDITED CONSOLIDATED BALANCE
SHEET OF THE BORROWERS, THE BORROWERS SHALL THEREUPON MAKE A PAYMENT
(AN "INVENTORY DECLINE REPAYMENT") TO THE ADMINISTRATIVE AGENT TO BE
APPLIED IN ACCORDANCE WITH SS.2.10.2(B) EQUAL TO THE GREATER OF (A) THE
AMOUNT OF SUCH EXCESS, MINUS THE AMOUNT OF ANY EARLIER INVENTORY
DECLINE REPAYMENTS, AND (B) ZERO.
(c) PRIOR TO THE DECLARATION TERMINATION DATE, IN THE EVENT
THAT ANY NET CASH PROCEEDS OF COLLATERAL OTHER THAN SPECIFIED RESALE
INVENTORY HAVE BEEN APPLIED BY THE ADMINISTRATIVE AGENT PURSUANT TO
SS.2.10.2(A) WHEN THEY SHOULD HAVE BEEN APPLIED PURSUANT TO
SS.2.10.2(B), THE BORROWERS SHALL, ON OR BEFORE THE END OF THE
SPECIFIED PERIOD REFERRED TO BELOW, SO NOTIFY THE ADMINISTRATIVE AGENT
AND MAKE A PAYMENT (AN "ASSET DISPOSITION REPAYMENT") TO THE
ADMINISTRATIVE AGENT TO BE APPLIED IN ACCORDANCE WITH SS.2.10.2(B)
EQUAL TO THE AMOUNT OF SUCH NET CASH PROCEEDS. SUCH NOTIFICATION SHALL
CONTAIN SUCH DETAILS AS ARE REASONABLY REQUESTED BY THE ADMINISTRATIVE
AGENT AND SHALL BE CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF THE
PARENT. THE TERM "SPECIFIED PERIOD," AS USED IN THIS SS.3.2(C), MEANS
(I) IN THE CASE OF A DISPOSITION GIVING RISE TO SUCH NET CASH PROCEEDS
OCCURRING ON OR BEFORE THE FIFTEENTH DAY OF A CALENDAR MONTH, THE
FIFTEENTH DAY OF THE NEXT SUCCEEDING CALENDAR MONTH, AND (II) IN THE
CASE OF A DISPOSITION GIVING RISE TO SUCH NET CASH PROCEEDS OCCURRING
AFTER THE FIFTEENTH DAY OF A CALENDAR MONTH, THE LAST DAY OF THE NEXT
SUCCEEDING CALENDAR MONTH.
(d) IN ACCORDANCE WITH THE TERMS OF, AND TO THE EXTENT
PROVIDED FOR IN, SS.2.10.2 AND 2.11, THE BORROWERS SHALL, IMMEDIATELY
UPON THE RECEIPT THEREOF, PREPAY THE OUTSTANDING LOANS OR, AS THE CASE
MAY BE, THE PRINCIPAL OF THE PREPETITION LENDER DEBT IN AN AMOUNT EQUAL
TO THE ASSET DISPOSITION REPAYMENT OR, AS THE CASE MAY BE, THE NET CASH
PROCEEDS RECEIVED FROM THE SALE OR OTHER DISPOSITION OF ASSETS. IN THE
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EVENT OF A PREPAYMENT OF THE LOANS APPLIED AS PROVIDED IN
SS.2.10.2(B)(I) OR (III), SUCH PREPAYMENT SHALL BE ACCOMPANIED BY A
PERMANENT REDUCTION IN THE TOTAL COMMITMENT IN THE AMOUNT OF SUCH
PREPAYMENT.
3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrowers shall have the right,
at their election, to repay the outstanding amount of the Loans, as a whole or
in part, at any time without penalty or premium. The Borrowers shall give the
Administrative Agent notice of any proposed prepayment pursuant to this ss.3.3
not later than 1:00 p.m. Boston, Massachusetts time on the Business Day prior to
the date of such prepayment, specifying the proposed date of prepayment of Loans
and the principal amount to be prepaid. Each such partial prepayment of the
Loans shall be in a minimum amount of $500,000 or an integral multiple thereof
and shall be accompanied by the payment of accrued interest on the principal
prepaid to the date of prepayment. Each partial prepayment shall be allocated
among the Banks in accordance with their respective Commitment Percentages, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Bank's Note, with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. FROM AND AFTER
THE ENTRY OF THE FINAL ORDER, THE REIMBURSEMENT OBLIGATIONS IN RESPECT
OF THE SPECIFIED EXISTING LETTERS OF CREDIT SHALL CONSTITUTE
REIMBURSEMENT OBLIGATIONS HEREUNDER AND THE SPECIFIED EXISTING LETTERS
OF CREDIT SHALL BE TREATED AS LETTERS OF CREDIT ISSUED HEREUNDER AND NO
LONGER AS LETTERS OF CREDIT ISSUED PURSUANT TO THE PREPETITION CREDIT
AGREEMENT. SUBJECT TO THE TERMS AND CONDITIONS HEREOF AND THE EXECUTION
AND DELIVERY BY THE BORROWERS OF A LETTER OF CREDIT APPLICATION ON THE
ISSUING BANK'S CUSTOMARY FORM (A "LETTER OF CREDIT APPLICATION"), THE
ISSUING BANK ON BEHALF OF THE BANKS AND IN RELIANCE UPON THE AGREEMENT
OF THE BANKS SET FORTH IN SS.4.1.4 AND UPON THE REPRESENTATIONS AND
WARRANTIES OF THE BORROWERS CONTAINED HEREIN, AGREES, IN ITS INDIVIDUAL
CAPACITY, ON AND AFTER ENTRY OF THE FINAL ORDER, TO EXTEND OR RENEW FOR
THE JOINT AND SEVERAL ACCOUNT OF THE BORROWERS ONE OR MORE SPECIFIED
EXISTING LETTERS OF CREDIT AND, IN ADDITION TO THE SPECIFIED EXISTING
LETTERS OF CREDIT, TO ISSUE, EXTEND AND RENEW FOR THE JOINT AND SEVERAL
ACCOUNT OF THE BORROWERS ONE OR MORE STANDBY AND (IF AGREED TO BY THE
ADMINISTRATIVE AGENT) DOCUMENTARY LETTERS OF CREDIT, IN SUCH FORM AND
FOR SUCH PURPOSES AS MAY BE REQUESTED FROM TIME TO TIME BY THE
BORROWERS AND AGREED TO BY THE ISSUING BANK; PROVIDED, HOWEVER, THAT,
AFTER GIVING EFFECT TO SUCH REQUEST, (A) THE SUM OF THE AGGREGATE
MAXIMUM DRAWING AMOUNT OF ALL LETTERS OF CREDIT (INCLUDING SPECIFIED
EXISTING LETTERS OF CREDIT) AND ALL UNPAID REIMBURSEMENT OBLIGATIONS
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(INCLUDING UNPAID REIMBURSEMENT OBLIGATIONS IN RESPECT OF THE SPECIFIED
EXISTING LETTERS OF CREDIT) SHALL NOT EXCEED THE LESSER OF (I)
$20,000,000 AND (II) ANY SPECIFIC AMOUNT APPROVED BY THE BANKRUPTCY
COURT SOLELY FOR LETTERS OF CREDIT IN THE FINAL ORDER, AND (B) THE SUM
OF (I) THE MAXIMUM DRAWING AMOUNT OF ALL LETTERS OF CREDIT, (II) ALL
UNPAID REIMBURSEMENT OBLIGATIONS, AND (III) THE AMOUNT OF ALL LOANS
OUTSTANDING, SHALL NOT EXCEED THE LEAST OF (A) THE TOTAL COMMITMENT AT
SUCH TIME MINUS THE COMMITMENT RESERVE, (B) THE BORROWING BASE AND (C)
THE AMOUNT APPROVED TO BE BORROWED BY WAY OF LOANS AND LETTERS OF
CREDIT IN THE FINAL ORDER.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the reasonable satisfaction of the
Issuing Bank. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the
extent of any such inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (ii) have an expiry date no later
than the Termination Date (unless otherwise agreed to by the
Administrative Agent). Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Issuing Bank on demand for the amount of
each draft paid by the Issuing Bank under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrowers pursuant to
ss.4.2 (such agreement for A Bank being called herein the "LETTER OF
CREDIT PARTICIPATION" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrowers' Reimbursement Obligation under ss.4.2 in an
amount equal to such payment. Each Bank shall share in accordance with
its participating interest in any interest which accrues pursuant to
ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to induce the
Issuing Bank to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby jointly and severally agree to
reimburse or pay to the Administrative Agent, for the account of the Issuing
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Bank or (as the case may be) the Banks, with respect to each Letter of Credit
issued, extended or renewed by the Issuing Bank hereunder,
(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any drafT presented under such Letter of Credit
is honored by the Issuing Bank, or the Issuing Bank otherwise makes a
payment with respect thereto, (i) the amount paid by the Issuing Bank
under or with respect to such Letter of Credit, and (ii) the amount of
any taxes, fees, charges or other costs and expenses whatsoever
incurred by the Issuing Bank or any other Bank in connection with any
payment made by the Issuing Bank or any other Bank under, or with
respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount of all
Letters of Credit, an amount equal to 105% of such difference, which
amount shall be held by the Issuing Bank for the benefit of the Banks
and the Issuing Bank as cash collateral for all Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.15, or the occurrence of thE
Termination Declaration Date, an amount equal to 105% of the then
Maximum Drawing Amount of all Letters of Credit, which amount shall be
held by the Issuing Bank for the benefit of the Banks and the Issuing
Bank as cash collateral for all Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Office in immediately available funds and shall be
promptly remitted by the Administrative Agent to the Issuing Bank or such other
Bank entitled thereto. Interest on any and all amounts remaining unpaid by the
Borrowers under this ss.4.2 at any timE from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Administrative Agent, for the accounts of the Issuing Bank and the other Banks,
on demand at the rate specified in ss.7.5 for overdue principaL on the Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Issuing
Bank shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrowers fail to reimburse the Issuing
Bank as provided in ss.4.2 on or before the date thaT such draft is paid or
other payment is made by the Issuing Bank, the Issuing Bank may at any time
thereafter notify the Banks of the amount of any such Unpaid Reimbursement
Obligation. No later than 3:00 p.m. (Boston, Massachusetts time) on the Business
Day next following the receipt of such notice, each Bank shall make available to
the Administrative Agent, at the Administrative Agent's Office, in immediately
available funds, and the Administrative Agent shall promptly forward the same to
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the Issuing Bank, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Issuing Bank for federal funds acquired by the
Issuing Bank during each day included in such period, TIMES (ii) the amount
equal to such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, TIMES (iii) a fraction, the numerator of which is the number of days
that elapse from and including the date the Issuing Bank paid the draft
presented for honor or otherwise made payment to the date on which such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation shall become
immediately available to the Issuing Bank, and the denominator of which is 360.
The responsibility of the Issuing Bank to the Borrowers and the Banks shall be
only to determine that the documents (including each draft) delivered under each
Letter of Credit in connection with such presentment shall be in conformity in
all material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrowers' joint and several obligations
under this ss.4 shall bE absolute and unconditional under any and all
circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which any of the Borrowers may have or have had against the
Administrative Agent, the Issuing Bank, any other Bank or any beneficiary of a
Letter of Credit. The Borrowers further agree with the Administrative Agent, the
Issuing Bank, and the other Banks that the Administrative Agent, the Issuing
Bank, and the other Banks shall not be responsible for, and the Borrowers'
Reimbursement Obligations under ss.4.2 shall not be affected by, among otheR
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among any of the
Borrowers, the beneficiary of any Letter of Credit or any financing institution
or other party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of any of the Borrowers against the beneficiary of any
Letter of Credit or any such transferee. The Administrative Agent, the Issuing
Bank, and the other Banks shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. The
Borrowers agree that any action taken or omitted by the Administrative Agent,
the Issuing Bank, or any other Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrowers and shall not result in any liability on the part of
the Administrative Agent, the Issuing Bank, or any other Bank to the Borrowers.
4.5. RELIANCE BY ISSUING BANK. To the extent not inconsistent with
ss.4.4, the Issuing Bank shall bE entitled to rely, and shall be fully protected
in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Issuing Bank. The Issuing Bank
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shall be fully justified in failing or refusing to take any action under this
Credit Agreement unless it shall first have received such advice or concurrence
of the Required Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Issuing Bank shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Required Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEES. The Borrowers shall, on the first Business
Day of each calendar month and on the Termination Date, pay a fee, in cash (in
each case, a "LETTER OF CREDIT FEE"), to the Administrative Agent, for the PRO
RATA accounts of the Banks in accordance with their Commitment Percentages, in
an amount equal to three and one-quarter percent (3.25%) per annum on the
average daily Maximum Drawing Amount of all Letters of Credit outstanding during
the immediately preceding month. The Borrowers shall also, on the first Business
Day of each calendar month and on the Termination Date, pay to the
Administrative Agent, for the account of the Issuing Bank, a fee (in each case,
a "FRONTING FEE") in an amount equal to one-eighth of one percent (0.125%) per
annum on the average daily Maximum Drawing Amount of all Letters of Credit
outstanding during the immediately preceding month. In respect of each Letter of
Credit, the Borrowers shall also pay to the Issuing Bank, for the Issuing Bank's
own account, at such other time or times as such charges are customarily made by
the Issuing Bank, the Issuing Bank's customary issuance, amendment, negotiation
or document examination and other administrative fees as in effect from time to
time.
4.7. CASH COLLATERAL FOR LETTER OF CREDIT OBLIGATIONS. In the event
that on the Termination Date there are any outstanding Letters of Credit, the
Borrowers shall, on such date, deposit with the Issuing Bank an amount equal to
105% of the aggregate Maximum Drawing Amount of all such Letters of Credit, to
be held by the Issuing Bank as cash collateral for any drawing under any such
Letter of Credit.
5. WAIVER OF SURETYSHIP DEFENSES.
Each of the Borrowers waives promptness, diligence, presentment,
demand, protest, notice of acceptance, notice of any Obligations incurred and
all other notices of any kind, all defenses which may be available by virtue of
any valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of any of the other
Borrowers or any other entity or other Person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Without limiting the generality of the foregoing, each of the Borrowers agrees
to the provisions of any instrument evidencing, securing or otherwise executed
in connection with any Obligation and agrees that the obligations of such
Borrower hereunder shall not be released or discharged, in whole or in part, or
otherwise affected by (i) the failure of the Administrative Agent or any Bank to
assert any claim or demand or to enforce any right or remedy against any of the
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other Borrowers or any other Person primarily or secondarily liable with respect
to any of the Obligations; (ii) the addition, substitution or release of any
entity or other Person primarily or secondarily liable for any Obligation; (iii)
the adequacy of any rights which the Administrative Agent or any Bank may have
against any collateral security or other means of obtaining repayment of any of
the Obligations; (iv) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which the Administrative Agent or any Bank might have in such collateral
security or the substitution, exchange, surrender, release, loss or destruction
of any such collateral security; or (v) any other act or omission which might in
any manner or to any extent vary the risk of such Borrower or otherwise operate
as a release or discharge of such Borrower, all of which may be done without
notice to such Borrower. To the fullest extent permitted by law, each of the
Borrowers hereby expressly waives any and all rights or defenses arising by
reason of (A) any "one action" or "anti-deficiency" law which would otherwise
prevent the Administrative Agent or any Bank from bringing any action, including
any claim for a deficiency, or exercising any other right or remedy (including
any right of set-off), against such Borrower before or after the Administrative
Agent's or such Bank's commencement or completion of any foreclosure action,
whether judicially, by exercise of power of sale or otherwise, or (B) any other
law which in any other way would otherwise require any election of remedies by
the Administrative Agent or any Bank.
6. CLOSING DATE FEES.
6.1. AGENTS' FEE. The Borrowers jointly and severally agree to pay to
the Agents and the Arranger the fees set forth in the fee letter dated December
18, 2001, by and among the Borrowers, the Agents and the Arranger (the "FEE
LETTER"). Such fees shall be due and payable at the times set forth in Fee
Letter.
6.2. NATURE OF FEES. Unless otherwise stated in the Fee Letter, all
fees will be fully-earned for each calendar month or portion thereof for which
the fee is calculated. All fees will be non-refundable when paid.
7. CERTAIN GENERAL PROVISIONS.
7.1. FUNDS FOR PAYMENTS.
7.1.1. PAYMENTS TO AGENT. All payments of principal, interest,
commitment fees, Letter of Credit Fees, Fronting Fees, and any other
amounts due hereunder or under any of the other Loan Documents shall be
made to the Administrative Agent, for the respective accounts of the
Banks and the Administrative Agent, at the Administrative Agent's
Office or at such other location that the Administrative Agent may from
time to time designate, in each case in Dollars and in immediately
available funds. Each of the Borrowers hereby expressly authorizes the
Administrative Agent to charge any account(s) of such Borrower with the
Administrative Agent or to advance Loans hereunder to effect any
payments due hereunder or under the other Loan Documents.
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7.1.2. NO OFFSET, ETC. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrowers are compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrowers with
respect to any amount payable by them hereunder or under any of the
other Loan Documents, the Borrowers will pay to the Administrative
Agent, for the account of the Banks or (as the case may be) the
Administrative Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the
Administrative Agent to receive the same net amount which the Banks or
the Administrative Agent would have received on such due date had no
such obligation been imposed upon the Borrowers. The Borrowers will
deliver promptly to the Administrative Agent certificates or other
valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrowers hereunder or under such
other Loan Document.
7.1.3. RECEIPT OF FUNDS BY AGENT. The Borrowers agree that, on
each day on which a payment is due hereunder with respect to any Loan,
Letter of Credit or fee or under any Note, it will deliver to the
Administrative Agent, not later than 12:00 noon (Boston, Massachusetts
time), the amount so due on such day.
7.2. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees, Fronting Fees, and other fees hereunder
shall be based on a 365/366-day year and paid for the actual number of days
elapsed. The outstanding amount of the Loans as reflected on the Note Records
from time to time shall, with respect to the Borrowers, be considered correct
and binding unless within five (5) Business Days after receipt of any notice
from the Administrative Agent or any of the Banks of such outstanding amount,
the Borrowers shall notify the Administrative Agent or such Bank to the contrary
or the Administrative Agent or such Bank shall notify the Borrowers to the
contrary.
7.3. CAPITAL ADEQUACY. If after the date hereof any Bank or the
Administrative Agent determines that (i) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (ii)
compliance by such Bank or the Administrative Agent or any corporation
controlling such Bank or the Administrative Agent with any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) of any such entity regarding capital adequacy, has the effect of
reducing the return on such Bank's or the Administrative Agent's commitment with
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respect to any Loans to a level below that which such Bank or the Administrative
Agent could have achieved but for such adoption, change or compliance (taking
into consideration such Bank's or the Administrative Agent's then existing
policies with respect to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Bank or (as the case may be) the
Administrative Agent to be material, then such Bank or the Administrative Agent
may notify the Borrowers of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrowers jointly and severally agree to pay such Bank or (as the case may be)
the Administrative Agent for the amount of such reduction in the return on
capital as and when such reduction is determined upon presentation by such Bank
or (as the case may be) the Administrative Agent of a certificate in accordance
with ss.7.4 hereof. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitablE basis.
7.4. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.7.3 and A brief explanation of such amounts which are
due, submitted by any Bank or the Administrative Agent to the Borrowers, shall
be PRIMA FACIE evidence, absent manifest error, that such amounts are due and
owing.
7.5. INTEREST AFTER DEFAULT. During the continuance of an Event of
Default, the principal of the Loans shall, until such Event of Default has been
cured or remedied or such Event of Default has been waived by the Required Banks
pursuant to ss.27, bear interest at a rate per annum equal to two percent (2%)
above the rate oF interest otherwise applicable to such Loans pursuant to
ss.2.5. During the continuance of an Event of Default, thE Letter of Credit Fee
shall be the rate per annum equal to two percent (2%) above the rate otherwise
applicable.
7.6. INTEREST LIMITATION. Notwithstanding any other term of this Credit
Agreement, any Note or any other Loan Document, the maximum amount of interest
which may be charged to or collected from any Person liable hereunder, under any
Note or under any other Loan Document by any Bank, shall be absolutely limited
to, and shall in no event exceed, the maximum amount of interest (the "MAXIMUM
RATE") which could lawfully be charged or collected under applicable law, so
that the maximum of all amounts constituting interest under applicable law,
howsoever computed, shall never exceed, as to any Person liable therefor, the
Maximum Rate, and any term of this Credit Agreement, any Note or any other Loan
Document which could be construed as providing for interest in excess of such
lawful maximum shall be and hereby is made expressly subject to and modified by
the provisions of this Section. If, in respect of any applicable period, the
effective interest rate on any amounts owing pursuant to this Credit Agreement,
the Notes or any of the other Loan Documents, absent the Maximum Rate limitation
contained herein, would have exceeded the Maximum Rate, and if in any applicable
period, such effective interest rate would otherwise be less than the Maximum
Rate, then the effective interest rate for such future applicable period shall
be increased to the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that a court of competent
jurisdiction shall, notwithstanding the provisions of this ss.7.6, determine
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that any Bank has received interest hereunder or under any of the other Loan
Documents in excess of the Maximum Rate, such excess shall, to the extent
permitted by applicable law, be applied first to any interest not in excess of
the Maximum Rate then due and not yet paid, then to the outstanding principal of
the Loans, then to fees and any other unpaid Obligations, and thereafter shall
be refunded to the Borrowers or as a court of competent jurisdiction may
otherwise order. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Credit
Agreement is less than the total amount of interest which would have been paid
or accrued had the interest not been limited hereby to the Maximum Rate, then
the Borrowers shall, to the extent permitted by applicable law, pay to the Banks
hereunder or under the Notes an amount equal to the excess, if any, of (a) the
lesser of (i) the amount of interest which would have been charged if the
Maximum Rate had, at all times, been in effect with respect to the Obligations
hereunder or under the Notes and (ii) the amount of interest which would have
accrued had the applicable effective interest rate not been limited hereunder by
the Maximum Rate over (b) the amount of interest actually paid or accrued under
this Credit Agreement. In determining whether or not the interest paid or
payable under any specific contingency exceeds the Maximum Rate, the Borrowers
and any Bank or the Administrative Agent, as the case may be, shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium, rather than as interest,
(ii) exclude any voluntary prepayments and the effects thereof, and (iii) spread
the total amount of interest throughout the entire contemplated term of the
Obligations so that the interest rate is uniform throughout the entire term of
the Obligations. The term "applicable law" as used in this ss.7.6 means the law
chosen pursuant to ss.22 hereof or, if (despite the parties' intentions
otherwise) ThE forum court does not enforce such contractual choice of law, the
applicable law after the forum court applies the choice of law rules of the
forum, including any federally mandated choice of law. The term includes
applicable federal law, such as the provisions of Section 5197 of the Revised
Statutes of the United States of America, as amended, 12 U.S.C. Section 85, as
amended.
8. PRIORITY AND COLLATERAL SECURITY.
8.1. SUPERPRIORITY CLAIMS AND COLLATERAL SECURITY. Each of the
Borrowers hereby represents, warrants and covenants that, except as otherwise
expressly provided in this paragraph, the Obligations, other than those relating
to Specified Existing Letters of Credit, upon the entry of the Interim Order,
and all of the Obligations upon the entry of the Final Order:
(a) SHALL AT ALL TIMES CONSTITUTE A SUPERPRIORITY CLAIM HAVING
PRIORITY, PURSUANT TO SECTIONS 364(C)(1) OF THE BANKRUPTCY CODE, OVER THE OTHER
SUPERPRIORITY CLAIMS GRANTED AS ADEQUATE PROTECTION IN RESPECT OF THE
PREPETITION LENDERS AND ANY OTHER CLAIMS OF ANY ENTITY, INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS UNDER SECTIONS 503, 506(C), 507, 1113, AND 1114 OF THE
BANKRUPTCY CODE, AND
(b) PURSUANT TO SECTIONS 364(C)(2) AND (3) AND 364(D) OF THE BANKRUPTCY
CODE AND THE SECURITY DOCUMENTS, SHALL AT ALL TIMES BE SECURED BY A FIRST
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PRIORITY PERFECTED LIEN IN ALL OF THE ASSETS, WHETHER NOW OWNED OR HEREAFTER
ACQUIRED OF THE BORROWERS AND THEIR ESTATES, PURSUANT TO THE TERMS OF THE
SECURITY DOCUMENTS.
SUCH SUPERPRIORITY CLAIM SHALL BE SUBJECT TO THE CARVE OUT. SUCH LIEN SHALL BE
ON AVOIDANCE ACTIONS (OTHER THAN AVOIDANCE ACTIONS AGAINST THE PREPETITION
LENDERS AND THE PREPETITION AGENTS) FROM AND AFTER THE ENTRY OF THE FINAL ORDER,
BUT SHALL BE SUBJECT TO THE CARVE OUT. OTHERWISE SUCH LIEN SHALL BE SENIOR IN
PRIORITY TO THE ADEQUATE PROTECTION LIENS SECURING THE PREPETITION LENDER DEBT
AND ALL OTHER LIENS OTHER THAN PERMITTED PRIOR LIENS. THE LIENS SECURING THE
OBLIGATIONS SHALL NOT BE SUBJECT TO SECTION 551 OF THE BANKRUPTCY CODE.
8.2. COLLATERAL SECURITY PERFECTION. Each of the Borrowers agrees to
take all action that the Administrative Agent or any Bank may reasonably request
as a matter of nonbankruptcy law to perfect and protect the Administrative
Agent's and the Banks' Liens upon the Collateral and for such Liens to obtain
the priority therefor contemplated hereby, including, without limitation,
executing and delivering such documents and instruments, financing statements,
providing such notices and assents of third parties, obtaining such governmental
approvals and providing such other instruments and documents in recordable form
as the Administrative Agent or any Bank may reasonably request. Each Borrower
hereby irrevocably authorizes the Administrative Agent at any time and from time
to time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as "all assets of such Borrower" or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the Commonwealth
of Massachusetts or such jurisdiction, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) provide any other information required by
part 5 of Article 9 of the Uniform Commercial Code of any jurisdiction for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether such Borrower is an organization, the type of organization
and any organization identification number issued to such Borrower and, (ii) in
the case of a financing statement filed as a fixture filing, a sufficient
description of real property to which the Collateral relates. Such Borrower
agrees to furnish any such information to the Administrative Agent promptly upon
the Administrative Agent's request.
8.3. NO DISCHARGE; SURVIVAL OF CLAIMS. Each of the Borrowers agrees
that (i) the Obligations shall not be discharged by the entry of an order
confirming a Reorganization Plan (and each of the Borrowers pursuant to Section
1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge), (ii) the
Superpriority Claim granted to the Agents and Banks pursuant to the Orders and
the Liens granted to the Administrative Agent, for the benefit of the Agents and
the Banks pursuant to the Orders and the Security Documents, shall not be
affected in any manner by the entry of an order confirming a Reorganization Plan
and (iii) none of the Borrowers shall propose or support any Reorganization Plan
that is not conditioned upon the payment in full in cash, on or prior to the
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Termination Date, of all of the Obligations, and, with respect to Obligations
arising pursuant to ss.18.1 oR ss.18.2 after such date, thereafter for the
payment in full of such Obligations in cash when due and payable.
9. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers represents and warrants to the Banks and the
Administrative Agent as follows:
9.1. CORPORATE AUTHORITY.
9.1.1. ORGANIZATION; GOOD STANDING. Each of the Borrowers (i)
is a corporation (or similar business entity) duly organized, validly
existing and in good standing under the laws of its state of
incorporation, organization or formation, (ii) has all requisite power
to own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing as a foreign
entity and is duly authorized to do business in each jurisdiction where
such qualification is necessary except where a failure to be so
qualified would not have a materially adverse effect on the business,
assets or financial condition of such Borrower.
9.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which any of
the Borrowers is a party and the transactions contemplated hereby and
thereby (i) are within the requisite authority of such Person, (ii)
have been duly authorized by all necessary corporate proceedings (or
similar proceedings), (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or
regulation to which any of the Borrowers is subject or any judgment,
order, writ, injunction, license or permit applicable to any of the
Borrowers and (iv) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding
upon, any of the Borrowers.
9.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which any of the
Borrowers is a party will, upon entry of the Interim Order or the Final
Order, whichever occurs first, result in valid and legally binding
obligations of such Person enforceable against it in accordance with
the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any proceeding
therefor may be brought.
9.2. GOVERNMENTAL APPROVALS. Except for the entry of the Interim Order
or the Final Order, whichever occurs first, the execution, delivery and
performance by any of the Borrowers of this Credit Agreement and the other Loan
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Documents to which any of the Borrowers is a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained.
9.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 9.3
hereto, each of the Borrowers owns all of the assets reflected in the
consolidated balance sheet of the Borrowers as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date or which have been
disclosed to the Administrative Agent), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
9.4. FISCAL YEAR; FINANCIAL STATEMENTS; PROJECTIONS.
9.4.1. FISCAL YEAR, FISCAL QUARTERS. Each of the Borrowers has
a fiscal year which is the twelve months ending on December 31 of each
calendar year. Each of the Borrowers has fiscal quarters ending on
calendar quarters.
9.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet of the Borrowers as at the
Balance Sheet Date, and a consolidated statement of income of the
Borrowers for the fiscal year then ended, audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
LLP. Such balance sheet and statement of income have been prepared in
accordance with generally accepted accounting principles and fairly
present the financial condition of the Borrowers as at the close of
business on the date thereof and the results of operations for the
fiscal year then ended. There are no contingent liabilities of the
Borrowers as of such date involving material amounts, known to the
officers of the Borrowers, which were not disclosed in such balance
sheet and the notes related thereto, other than cure payments in
connection with executory contracts to be assumed and other claims
arising in the Cases that are reasonably anticipated to be classified
as general unsecured claims.
9.4.3. CASH BUDGET. The Borrowers have delivered to the
Administrative Agent and each of the Banks a projected cash revenue and
expense budget dated December 12, 2001 for the period through December
31, 2002. The budget has been prepared in good faith based upon
assumptions which the Borrowers believe to be reasonable assumptions.
To the knowledge of the Borrower, no facts exist that (individually or
in the aggregate) would result in any material change in the budget
that has not been disclosed to the Agents.
9.5. NO MATERIAL CHANGES. Except as disclosed in the Parent's filings
with the Securities and Exchange Commission prior to the Closing Date, since the
Balance Sheet Date there has occurred no materially adverse change in the
condition (financial or otherwise), operations, performance, properties, or
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prospects of the Borrowers as shown on or reflected in the consolidated balance
sheet of the Borrowers as at the Balance Sheet Date, or the consolidated
statement of income for the fiscal year then ended, other than (i) changes in
the Borrowers' financial performance which are reflected in the budget referred
to in ss.9.4.3 and the financiaL statements delivered to the Banks for the
periods prior to the Filing Date, (ii) the commencement and continuation of the
Cases, and (iii) changes in the ordinary course of business that have not had
any materially adverse effect either individually or in the aggregate on the
business or financial condition of the Borrowers, considered as a whole. Except
as disclosed in the Parent's Form 10-K, for the period ending December 31, 2000,
since the Balance Sheet Date, the Parent has not made any Distribution, and
except for Distributions to other Borrowers, the Borrowers other than the Parent
have not made any Distributions since the Balance Sheet Date.
9.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. SCHEDULE 9.6 attached hereto
contains a true, complete and current listing of all copyrights, copyright
applications, trademarks, trademark rights, trade names, patents, patent rights
or licenses, patent applications and other intellectual property rights of the
Borrowers that are registered with any governmental authority as of the Closing
Date. Each of the Borrowers owns or possesses rights to use all franchises,
licenses, copyrights, copyright applications, patents, patent rights or
licenses, patent applications, trademarks, trademark rights, trade names, trade
name rights, copyrights and rights with respect to the foregoing which are
required to conduct its business. No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights, and no Borrower is liable to any Person for infringement under
applicable law with respect to any such rights as a result of its business
operations.
9.7. LITIGATION. Except for the Cases and as set forth in SCHEDULE 9.7
hereto, there are no actions, suits, proceedings or investigations of any kind
pending or threatened against any of the Borrowers before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrowers, considered as a whole,
or materially impair the right of the Borrowers, considered as a whole, to carry
on business substantially as now conducted by them, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the consolidated balance sheet of the Borrowers, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
9.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as disclosed on
SCHEDULE 9.8, none of the Borrowers is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of the Borrowers, considered as a whole.
Other than as set forth on SCHEDULE 9.8 and other than contracts which the
Borrowers may reject as executory contracts in the Cases and for which they are
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under no material economic compulsion to fail to reject, none of the Borrowers
is a party to any contract or agreement that has or is expected, in the judgment
of such Borrower's officers, to have any materially adverse effect on the
business of such Borrower.
9.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Except as set forth
on SCHEDULE 9.9, none of the Borrowers is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of the Borrowers, considered as a whole.
9.10. TAX STATUS. The Borrowers (i) have made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, (ii) have paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (iii) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrowers know of no
basis for any such claim.
9.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
9.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Borrowers is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is any of the Borrowers an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
9.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage, or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of any of the Borrowers or any rights relating
thereto.
9.14. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 9.14 and
except for arm's length transactions pursuant to which the Borrowers make
payments in the ordinary course of business upon terms no less favorable than
the Borrowers could obtain from third parties, none of the officers, directors,
or employees of the Borrowers is presently a party to any transaction with any
of the Borrowers (other than for services as employees, officers and directors),
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including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from, any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
9.15. EMPLOYEE BENEFIT PLANS.
9.15.1. IN GENERAL. Except as shown on SCHEDULE 9.15.1 hereto,
each Employee Benefit Plan and each Guaranteed Pension Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including
but not limited to the provisions thereunder respecting prohibited
transactions and the bonding of fiduciaries and other Persons handling
plan funds as required by ss.412 of ERISA. The Borrowers have
heretofore delivered to thE Administrative Agent the most recently
completed annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under ss.103(d) of ERISA,
with respect tO each Guaranteed Pension Plan.
9.15.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverAgE subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws or to the extent taken
into account in the latest actuarial valuation of post-employment
benefit obligations (FASB No. 10Bb report). By their respective terms,
and except as limited as a result of the filing of the Cases, the
Borrowers may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in
the discretion of the Borrowers without liability to any Person.
9.15.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of aN accumulated funding deficiency or extension of
amortization periods has been received and remains in effect with
respect to any Guaranteed Pension Plan, and none of the Borrowers or
any ERISA Affiliate is obligated to or has posted security in
connection with an amendment to a Guaranteed Pension Plan pursuant to
ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to the PBGC
(other than requiReD insurance premiums, all of which have been paid)
has been incurred by any of the Borrowers or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to which the
requirement of 30 days notice has been waived or attributable to the
filing of the Cases), or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC.
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9.15.4. MULTIEMPLOYER PLANS. None of the Borrowers or any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale oF assets described in
ss.4204 of ERISA. None of the Borrowers or any ERISA Affiliate has been
notified thaT any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of ss.4241 or ss.4245 of ERISA or is at
risk of entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA.
9.16. USE OF PROCEEDS.
9.16.1. GENERAL. The proceeds of the Loans shall be used and
Letters of Credit shall be issued solely for working capital and
general corporate purposes, including, without limitation, the payments
on the Prepetition Lender Debt to the extent provided in this Credit
Agreement and the Orders.
9.16.2. REGULATIONS U AND X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221
and 224.
9.17. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, have determined that:
(a) except as set forth on SCHEDULE 9.17 attached hereto, none
of the Borrowers or any operator of the Real Estate or any operations
thereon is in violation, or alleged violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the
environment (hereinafter "ENVIRONMENTAL LAWS"), which violation would
have a material adverse effect on the environment or the business,
assets or financial condition of any of the Borrowers;
(b) except as set forth on SCHEDULE 9.17 attached hereto, none
of the Borrowers has received notice from any third party including,
without limitation, any federal, state or local governmental authority,
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(i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substances as
defined by 42 U.S.C. ss.9601(14), any pollutAnT or contaminant as
defined by 42 U.S.C. ss.9601(33) and any toxic substances, oil or
hazardous materials oR other chemicals or substances regulated by any
Environmental Laws ("HAZARDOUS SUBSTANCES") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that any of the Borrowers conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances;
(c) except as set forth on SCHEDULE 9.17 attached hereto, (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is
located on any portion of the Real Estate, except where the presence of
such underground tank or other underground storage receptacle could not
be reasonably expected to have a material adverse effect on the value
of any of the Real Estate or a material adverse effect on the Borrowers
as a whole; (ii) in the course of any activities conducted by any of
the Borrowers or operators of their properties, no Hazardous Substances
have been generated or are being used on the Real Estate except in
accordance with applicable Environmental Laws; (iii) there have been no
releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances
on, upon, into or from the properties of any of the Borrowers, which
releases would have a material adverse effect on the value of any of
the Real Estate or adjacent properties or the environment; (iv) to the
best of the Borrowers' knowledge, there have been no releases on, upon,
from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come
to be located on, and which would have a material adverse effect on the
value of, the Real Estate; and (v) in addition, any Hazardous
Substances that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification number
issued by the EPA, treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and
are, to the best of the Borrowers' knowledge, operating in compliance
with such permits and applicable Environmental Laws; and
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(d) except as set forth on SCHEDULE 9.17 attached hereto, none
of the Borrowers, any Mortgaged Property or any of the other Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a
condition to the recording of any Leasehold Mortgage or to the
effectiveness of any other transactions contemplated hereby.
9.18. SUBSIDIARIES; CAPITALIZATION, ETC. All Subsidiaries, direct and
indirect, of the Borrowers are listed on SCHEDULE 9.18 hereto. None of the
Borrowers or any Subsidiary of the Borrowers is engaged in any joint venture or
partnership with any other Person. The capitalization of each of the Borrowers
consists of the number of shares, authorized, issued and outstanding, of such
classes and series, with or without par value, described on SCHEDULE 9.18. All
such outstanding shares have been duly authorized and validly issued and are
fully paid and nonassessable. The shareholders of each of the Borrowers (other
than the Parent) and the number of shares owned by each as of the Closing Date
are described on SCHEDULE 9.18. There are no outstanding stock purchase
warrants, subscriptions, options, securities, instruments or other rights of any
type or nature whatsoever, which are convertible into, exchangeable for or
otherwise provide for or permit the issuance of Capital Stock of any of the
Borrowers (other than the Parent) as of the Closing Date, except as described on
SCHEDULE 9.18.
9.19. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to any of the Borrowers in the case of any document
or information not furnished by it) necessary in order to make the statements
herein or therein not misleading. Except for the Cases and except as set forth
on SCHEDULE 9.19, there is no fact known to any of the Borrowers which
materially adversely affects, or which is reasonably likely in the future to
materially adversely affect, the business, assets, financial condition or
prospects of any of the Borrowers, considered as a whole, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
9.20. PERFECTION OF SECURITY INTEREST. Upon the entry of the Interim
Order or the Final Order, whichever occurs first, to the extent requested by the
Administrative Agent, all filings, assignments, pledges and deposits of
documents or instruments will have been made and all other actions will have
been taken that are necessary or advisable, under applicable law, to establish
and perfect the Administrative Agent's security interest in the Collateral. The
Collateral and the Administrative Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings, or other defenses. The
Borrowers are the owners of the Collateral, free from any lien, security
interest, encumbrance, or any other claim or demand, except for Permitted Liens.
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9.21. BANK ACCOUNTS. SCHEDULE 9.21 hereto sets forth the account
numbers and location of all bank accounts of the Borrowers, as such Schedule may
be updated from time to time pursuant to ss.11.13.
9.22. FILED ENTITIES. All Subsidiaries, other than those Subsidiaries
listed on SCHEDULE 9.22 hereto, are debtors in the Cases in the Bankruptcy
Court.
9.23. ELIGIBLE RECEIVABLES. Each Receivable reflected on the
computations included in any Borrowing Base Certificate meets the criteria
enumerated in the definition of Eligible Receivables.
10. AFFIRMATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans and the Issuing Bank has any obligation to
issue, extend or renew any Letter of Credit:
10.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the Fronting Fees, the commitment fees,
the fees set forth in the Fee Letter and all other amounts provided for in this
Credit Agreement and the other Loan Documents to which any of the Borrowers is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
10.2. MAINTENANCE OF OFFICE. Each of the Borrowers will maintain its
chief executive office in ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place in the United States of America as such
Borrower shall designate upon written notice to the Administrative Agent, where
notices, presentations and demands to or upon such Borrower in respect of the
Loan Documents to which such Borrower is a party may be given or made. Each of
the Borrowers will give the Administrative Agent thirty days prior written
notice of any change in the location of its chief executive office.
10.3. RECORDS AND ACCOUNTS. Each of the Borrowers will (i) keep true
and accurate records and books of account in which full, true and correct
entries will be made in accordance with generally accepted accounting
principles, (ii) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties, contingencies, and other reserves, and (iii) at all times
engage ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or other independent certified public accountants
reasonably satisfactory to the Administrative Agent as the independent certified
public accountants of such Borrower and will not permit more than thirty (30)
days to elapse between the cessation of such firm's (or any successor firm's)
engagement as the independent certified public accountants of such Borrower and
the appointment in such capacity of a successor firm as shall be reasonably
satisfactory to the Agents.
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10.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers
will deliver to each of the Banks:
(a) within sixty (60) days of the end of the fiscal quarter
ending December 31, 2001, and within forty-five (45) days of the end of
each of the other fiscal quarters of the Borrowers, copies of the
unaudited consolidated balance sheet of the Borrowers and the unaudited
consolidating balance sheet of the Borrowers, each as at the end of
such quarter, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for the portion of the
Borrowers' fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrowers that the information contained in such
financial statements fairly presents the financial position of the
Borrowers on the date thereof (subject to year-end adjustments);
(b) as soon as practicable, but in any event within sixty (60)
days of the end of the month ending December 31, 2001, and within
thirty (30) days after the end of each other month, unaudited monthly
consolidated financial statements of the Borrowers for such month and
unaudited monthly consolidating financial statements of the Parent for
such month, each prepared in accordance with generally accepted
accounting principles;
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Parent in form and substance satisfactory to the Administrative Agent
(the "COMPLIANCE CERTIFICATE") and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in
ss.12 and (if applicable) reconciliations to reflect changes in
generally accepted accountinG principles since the Balance Sheet Date;
(d) promptly, copies of all pleadings, papers, notices, orders
and other papers filed in or issued from the Bankruptcy Court or any
appellate court in the Cases and copies of all reports filed with the
Office of the United States Trustee relating to any of the Cases;
(e) on the first Business Day of each month, a rolling
thirteen (13) week cash flow projection, of the Borrowers in a form and
in such details as is reasonably satisfactory to the Agents, updating
the prior cash flow projection and, for prior periods ending up to one
week prior to the date of the report, showing actual performance and
any variances of actual performance from projected performance;
(f) from time to time upon request of either Agent, a summary
of accounts receivable and accounts payable of the Borrowers;
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(g) not less frequently than semi-monthly, and from time to
time upon either Agent's request, a Borrowing Base Certificate in the
form of EXHIBIT E attached hereto (the "BORROWING BASE CERTIFICATE");
(h) from time to time upon request, a written or oral report,
in detail reasonably satisfactory to the Agents, as to the status of
the Reorganization Plan; and
(i) from time to time such other financial data and
information (including accountants' management letters) as either Agent
may reasonably request.
10.5. NOTICES.
10.5.1. DEFAULTS. The Borrowers will promptly notify the
Agents and each of the Banks in writing of the occurrence of any
Default or Event of Default. If any Person shall give any notice or
take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or any
other note, evidence of Indebtedness, indenture or other obligation to
which or with respect to which any of the Borrowers is a party or
obligor, whether as principal, guarantor, surety or otherwise, the
Borrowers shall forthwith give written notice thereof to each of the
Agents and each of the Banks, describing the notice or action and the
nature of the claimed default.
10.5.2. ENVIRONMENTAL EVENTS. The Borrowers will promptly give
notice to the Administrative Agent (i) of any material violation of any
Environmental Law that any of the Borrowers reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency that has the potential to materially adversely
affect the assets, liabilities, financial conditions or operations of
any of the Borrowers, or the Administrative Agent's security interests
pursuant to the Security Documents and (ii) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to materially adversely affect the
assets, liabilities, financial conditions or operations of any of the
Borrowers, or the Administrative Agent's security interests pursuant to
the Security Documents.
10.5.3. NOTICE OF LITIGATION AND JUDGMENTS. The Borrowers will
give notice to the Administrative Agent in writing within ten (10) days
of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting any of the
Borrowers or to which any of the Borrowers is or becomes a party
involving an uninsured claim against any of the Borrowers, that could
reasonably be expected to have a materially adverse effect on any of
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the Borrowers and stating the nature and status of such litigation or
proceedings. The Borrowers will give notice the to Administrative
Agent, in writing, in form and detail satisfactory to the
Administrative Agent, within five (5) days of any judgment not covered
by insurance, final or otherwise, against any of the Borrowers in an
amount in excess of $250,000.
10.5.4. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The
Borrowers will, immediately upon becoming aware thereof, notify the
Administrative Agent in writing of any setoff, claims, withholdings or
other defenses to which any of the Collateral, or the Administrative
Agent's rights with respect to the Collateral, are subject.
10.5.5. NOTICE REGARDING EXECUTORY CONTRACTS. The Borrowers
shall notify the Administrative Agent prior to any of the Borrowers
rejecting any contract or making any motion to reject any contract,
setting forth in such notice the Borrowers' reasons why such rejection
(i) will be in the best interests of the Borrowers and (ii) will not
have a material adverse effect on the Borrowers, considered as a whole,
and avoid proceeding with such rejection if such rejection will have a
material adverse effect on the Borrowers, considered as a whole.
10.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES; ETC.
(a) Each of the Borrowers will do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, rights and franchises.
(b) Each of the Borrowers (i) will cause all of its properties
used or useful in the conduct of its business to be maintained and kept
in good condition, repair and working order and supplied with all
necessary equipment, (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in
the judgment of such Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times, and (iii) will continue to engage primarily in
the businesses now conducted by it and in related businesses; PROVIDED
that nothing in this ss.10.6 shall prevent any of the BorrowerS from
discontinuing the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of such Borrower, desirable in
the conduct of its business and that do not in the aggregate materially
adversely affect the business of the Borrowers on a consolidated basis.
10.7. INSURANCE. Each of the Borrowers will maintain with financially
sound and reputable insurers insurance with respect to its properties and
business against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent and reasonably
satisfactory to the Administrative Agent.
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10.8. TAXES. Each of the Borrowers will duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its property;
PROVIDED that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if such Borrower shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that each of the
Borrowers will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
10.9. INSPECTION OF PROPERTIES AND BOOKS; INFORMATION.
(a) Each of the Borrowers shall permit the Banks, through
either Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrowers, to examine
the books of account of the Borrowers (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts
of the Borrowers with, and to be advised as to the same by, their
officers, all at such reasonable times and intervals as either Agent or
any Bank may reasonably request.
(b) Each of the Borrowers shall continue to cooperate fully
with the Agents, the Agents' Special Counsel and their representatives,
and use their best efforts to provide such information, documentation
and records as any of them may reasonably request concerning the
operations of the Borrowers, payables related thereto and other
matters, such that all such information will be presented to the Agents
as promptly as practicable after any reasonable request therefor by
either Agent, the Agent's Special Counsel or any of their
representatives.
10.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
the Borrowers will comply with (i) in all material respects, the applicable laws
and regulations wherever its business is conducted, including all Environmental
Laws, (ii) the provisions of its charter documents and by-laws, (iii) except for
temporary delays from the Filing Date as permitted by the Bankruptcy Code and
for executory contracts rejected by such Borrower in compliance with the
requirements of ss.10.5.5, all contracts, agreements and instruments by which it
oR any of its properties may be bound and (iv) all applicable decrees, orders,
and judgments. If any authorization, consent, approval, permit or license from
the Bankruptcy Court or any officer, agency or instrumentality of any government
shall become necessary or required in order that any of the Borrowers may
fulfill any of its obligations hereunder or any of the other Loan Documents to
which any of the Borrowers is a party, each of the Borrowers will immediately
take or cause to be taken all reasonable steps within the power of such Borrower
to obtain such authorization, consent, approval, permit or license and furnish
the Administrative Agent and the Banks with evidence thereof.
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10.11. EMPLOYEE BENEFIT PLANS. Each of the Borrowers will (i) promptly
upon filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Administrative Agent a copy of the most recent actuarial
statement required to be submitted under ss.103(d) of ERISA and Annual Report,
Form 5500, with alL required attachments, in respect of each Guaranteed Pension
Plan and (ii) promptly upon receipt or dispatch, furnish to the Administrative
Agent any notice, report or demand sent or received in respect of a Guaranteed
Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of
ERISA (and any other substantIvE correspondence from or with the PGBC regarding
the Guaranteed Pension Plans), or in respect of a Multiemployer Plan, under
ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
10.12. USE OF PROCEEDS. Each of the Borrowers will use the proceeds of
the Loans and will obtain Letters of Credit solely for the purposes set forth in
ss.9.16.
10.13. CASH MANAGEMENT ARRANGEMENTS; DEPOSITORY ARRANGEMENTS.
(a) Each of the Borrowers shall implement and maintain in
place cash management arrangements as shall be in form and substance
reasonably satisfactory to the Administrative Agent. Without limiting
the generality of the foregoing, the parties agree that:
(i) all cash and cash equivalents held by the
Borrowers and all proceeds of Receivables and other accounts,
chattel paper, general intangibles, instruments and other
payment rights for which any of the Borrowers is an obligee
shall be deposited into either the Concentration Account or
any agency accounts of the Borrowers subject to any of the
Agency Account Agreements; and
(ii) all cash and cash equivalents held by the
Borrowers and all such proceeds of Receivables and other
accounts, chattel paper, general intangibles, instruments and
other payment rights shall, on each Business Day or such other
frequency as may be agreed to by the Administrative Agent be
transferred to the Concentration Account, to the extent not
already transferred to the Concentration Account, for
application to the Obligations pursuant to the provisions
hereof.
(b) In the event that, any of the Borrowers receives any cash,
checks or other cash proceeds of Collateral, the Borrowers shall,
promptly upon receipt thereof, in the identical form received (except
for any endorsements thereon which may be required by the
Administrative Agent), cause such cash, checks and cash proceeds to be
paid directly into the Concentration Account or into any agency account
subject to an Agency Account Agreement.
(c) The Borrowers agree to implement the foregoing cash
management arrangements as soon as practicable following the Closing
Date.
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10.14. RETENTION OF FINANCIAL ADVISOR AND COMMERCIAL FINANCE AUDITS AND
APPRAISALS.
(a) The Borrowers acknowledge that the Agents' Special Counsel
may continue to retain FTI/▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ to, among other things,
make visits to, and discuss financial and operational matters with, the
Borrowers and to advise the Administrative Agent and the Banks as to
the business, operations and financial condition of the Borrowers. Such
consultant shall not be limited in the frequency of visits to the
facilities of the Borrowers. The Borrowers shall cooperate with such
consultant and provide such consultant with all information reasonably
requested by such consultant in connection with its engagement by
Agents' Special Counsel.
(b) Upon the reasonable request of either Agent, the Borrowers
will obtain and deliver to the Agents, or, if either Agent so elects,
will cooperate with the Agents in the Agents' obtaining, a report of an
independent collateral auditor satisfactory to the Agents (which may be
affiliated with either Agent or one of the Banks) with respect to the
components included in the Borrowing Base, which report shall indicate
whether or not the information set forth in the Borrowing Base
Certificate most recently delivered at the time of reference thereto is
accurate and complete in all material respects based upon a review by
such auditors of the Receivables (including verification with respect
to the amount, aging, identity and credit of the respective Account
Debtors and the billing practices of the Borrowers). All such
collateral value reports shall be conducted and made at the expense of
the Borrowers.
(c) Upon the reasonable request of either Agent, the Borrowers
will obtain and deliver to the Agents, or, if either Agent so elects,
will cooperate with the Agents in the Agents' obtaining, a report of an
appraiser or appraisers satisfactory to the Agents (which may be
affiliated with either Agent or one of the Banks) with respect to the
other assets of any of the Borrowers. All such appraisals shall be
conducted and made at the expense of the Borrowers.
10.15. COLLATERAL PRESERVATION. Each of the Borrowers shall take all
such further actions as the Administrative Agent may from time to time
reasonably request to preserve, protect, perfect and ensure the priority of the
Collateral, subject to Permitted Liens entitled to priority under applicable
law.
10.16. REAL ESTATE MATTERS. At the request of the Administrative Agent,
the Borrowers shall execute such instruments, documents and agreements, and take
such other action as shall be necessary to convey to the Administrative Agent, a
first priority mortgage in any or all real property owned by any of the
Borrowers, and in connection therewith, deliver such appraisals, environmental
assessments, surveys, reports and information as the Administrative Agent shall
require. At the request of the Administrative Agent, the Borrowers shall execute
such instruments, documents and agreements, and take such other action as shall
be necessary to convey to the
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Administrative Agent, a first priority mortgage in any or all real property
leased by any of the Borrowers, and in connection therewith, deliver such
appraisals, environmental assessments, surveys, reports and information as the
Administrative Agent shall reasonably require.
10.17. LANDLORDS AND WAREHOUSEMEN. Each of the Borrowers shall endeavor
to obtain and deliver to the Administrative Agent an agreement, in form and
substance satisfactory to the Administrative Agent, regarding each property
leased by the Borrowers on which Inventory is held or maintained and by each
land landlord and each other third party in possession of any of the Collateral
consisting of Inventory. Each such agreement delivered under this section shall
include an acknowledgement of the first priority of the Lien of the
Administrative Agent in such Inventory together with such other agreements as to
access to such Collateral, free of any Lien or right of distraint of such party
in possession, as the Administrative Agent may reasonably request.
10.18. MANAGEMENT SEARCH.
(a) The Borrowers shall commence and diligently maintain a
search for the selection of an interim president and chief
restructuring officer experienced in the businesses of the Borrowers
and in restructuring operations of financially distressed companies;
shall provide periodic updates to the Agents and the Prepetition Agents
of the results of such search, and shall expeditiously conclude the
search and hire for such positions. The Agents and the Prepetition
Agents shall be satisfied as to the scope of the operational authority,
subject to supervision by the Parent's board of directors, granted to
the interim president and chief executive officer.
(b) The Borrowers shall (i) commence and diligently maintain
an expeditious search, using an executive search firm of nationally
recognized standing, for the selection of a permanent president and
chief executive officer experienced in the businesses of the Borrowers
and in restructuring operations of financially distressed companies;
(ii) provide periodic updates to the Agents and the Prepetition Agents
of the results of such search, (iii) consult, and cause such search
firm to consult, with the Agents and the Prepetition Agents as to the
nature and skills of the candidates being considered; and (iv) conclude
the search and hire for such positions a person, reasonably acceptable
to the Agents and the Prepetition Agents, so that the person begins to
perform his or her duties no later than June 30, 2002. The Agents and
the Prepetition Agents shall be satisfied as to the scope of the
operational authority, subject to supervision by the Parent's board of
directors, granted to the permanent president and chief executive
officer.
10.19. LEASES. The Borrowers will conduct a review of operating and
Capitalized Leases of the Borrowers, which review, together with such details
(including an analysis of the operating leases to be rejected by the Borrowers
and the Capitalized Leases in which the leased goods are to be returned or
abandoned to the lessors) as are reasonably requested by the Agents and the
Prepetition Agents, shall be presented to the Agents and the Prepetition Agents
by the Borrowers no later than February 28, 2002.
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10.20. FURTHER ASSURANCES. Each of the Borrowers will cooperate with
the Banks and the Agents and execute such further instruments and documents as
the Banks or either Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.
11. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Issuing Bank has any obligation to
issue, extend or renew any Letter of Credit:
11.1. RESTRICTIONS ON INDEBTEDNESS. None of the Borrowers will create,
incur, assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agents arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) the Prepetition Lender Debt and Indebtedness existing on
the date hereof and listed and described on SCHEDULE 11.1 hereto;
(d) Indebtedness of a Subsidiary of any of the Borrowers owing
to such Borrower;
(e) (i) purchase money Indebtedness incurred by any of the
Borrowers in the ordinary course of business consistent with past
practices in an aggregate amount not to exceed $10,000,000, and (ii)
Indebtedness arising from the consignment of Inventory to any of the
Borrowers in an aggregate amount not to exceed $5,000,000; PROVIDED
that the sum of all amounts outstanding under clauses (i) and (ii)
shall not exceed an aggregate amount of $12,000,000 at any time; and
(f) Indebtedness with respect to the indemnification of
officers and directors of the Borrowers in the ordinary course of
business consistent with past practices.
11.2. RESTRICTIONS ON LIENS. None of the Borrowers will (i) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom; (ii) transfer any
of such property or assets or
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the income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; or (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; PROVIDED that the Borrowers may create or
incur or suffer to be created or incurred or to exist:
(a) liens in favor of the Borrowers on all or part of the
assets of Subsidiaries of the Borrowers securing Indebtedness owing by
Subsidiaries of the Borrowers to the Borrowers;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens to secure claims
for labor, material or supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations or to secure statutory
obligations arising in the ordinary course of the Borrowers' businesses
consistent with past practices and other security deposits arising in
the ordinary course of the Borrowers' business consistent with past
practices;
(d) liens in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long
as execution is not levied thereunder or in respect of which the
Borrowers shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review;
(e) liens or claims of carriers, warehousemen, mechanics, and
materialmen, and other like liens, in existence less than 120 days from
the date of creation thereof in respect of obligations which are either
(i) not overdue or (ii) being contested in good faith by the Borrowers;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which any of the Borrowers
is a party, and other minor liens or encumbrances none of which in the
opinion of the Borrowers interferes materially with the use of the
property affected in the ordinary conduct of the business of the
Borrowers, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrowers individually
or of the Borrowers on a consolidated basis;
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(g) liens existing on the date hereof and listed on SCHEDULE
11.2 hereto and liens in favor of the Prepetition Agents and the
Prepetition Lenders securing the Prepetition Lender Debt;
(h) liens in favor of the Administrative Agent or the
Administrative Agent for the benefit of the Banks and the Agents under
the Loan Documents; and
(j) security interests in respect of Indebtedness permitted
pursuant toss.11.1(e).
Nothing contained in this Section subordinates the Liens in favor of the
Administrative Agent under the Security Documents or the Orders to any Permitted
Lien that is not valid, perfected and entitled to priority over the
Administrative Agent's Liens under applicable law or that is avoidable under the
Bankruptcy Code.
11.3. RESTRICTIONS ON INVESTMENTS. None of the Borrowers will make or
permit to exist or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrowers;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of any Bank or any United States banks
having total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S") and not less than
"A 1" if rated by Standard and Poor's Rating Group ("S&P"); PROVIDED
that such Investment in such commercial paper otherwise permitted
hereunder shall be permitted if such commercial paper is rated either
(i) not less than "P 2" by Moody's and "A 1" by S&P or (ii) not less
than "A 2" by S&P and "P 1" by Moody's;
(d) Investments existing on the date hereof and listed on
SCHEDULE 11.3 hereto; and
(e) Investments with respect to Indebtedness permitted
byss.11.1(d) so long as such entities remain Subsidiaries of the
Borrowers.
11.4. DISTRIBUTIONS.
None of the Borrowers will make any Distributions other than
Distributions to the Parent. No Borrower shall, or shall permit any of its
Subsidiaries to, create or permit to exist any restriction on the ability of any
of its Subsidiaries to pay dividends to the Parent.
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11.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
11.5.1. MERGERS AND ACQUISITIONS. None of the Borrowers will
become a party to any merger or consolidation except the merger or
consolidation of one or more of the Subsidiaries of any Borrower with
and into such Borrower, with such Borrower being the surviving
corporation of such merger or consolidation; PROVIDED that, in each
case, no Default or Event of Default shall have occurred and be
continuing, or would result from such merger or consolidation. None of
the Borrowers will effect any asset acquisition or stock acquisition,
other than the acquisition of assets in the ordinary course of business
consistent with past practices.
11.5.2. DISPOSITION OF ASSETS. None of the Borrowers will
become a party to or agree to or effect any disposition of assets,
other than, so long as no Default or Event of Default has occurred and
is continuing, (a) true leases of Inventory, (b) sales of Specified
Resale Inventory, and (c) up to the total sum of $12,000,000,
dispositions of other assets, in each case in the ordinary course of
business consistent with past practices and for reasonably equivalent
value.
11.6. SALE AND LEASEBACK. None of the Borrowers will enter into any
arrangement, directly or indirectly, whereby such Borrower shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that such Borrower intends to use for
substantially the same purpose as the property being sold or transferred.
11.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. None of the Borrowers will,
(i) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, other than in
compliance with all Environmental Laws and other applicable laws, (ii) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, except as described in
SCHEDULE 9.17, (iii) generate any Hazardous Substances on any of the Real
Estate, other than in compliance with all Environmental Laws and other
applicable laws, (iv) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a material release (i.e. releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) or material threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law in any material respect or bring such Real Estate
in violation in any material respect of any Environmental Law.
11.8. SUBORDINATED DEBT. Except pursuant to a Reorganization Plan that
has been confirmed by an order of the Bankruptcy Court with consent of the
Agents and the Banks, none of the Borrowers will prepay, redeem, repurchase or
defease any of the Subordinated Debt. None of the Borrowers will, without the
prior written consent of the Administrative Agent, amend, supplement or
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otherwise modify any of the terms of the Subordinated Debt or take any action
that would cause or permit the Obligations or the Prepetition Lender Debt to
fail to constitute senior indebtedness to which the payment of the Subordinated
Debt are subordinated.
11.9. EMPLOYEE BENEFIT PLANS. Except in accordance with the
Reorganization Plan that has been confirmed by an order of the Bankruptcy Court
with consent of the Agents and the Banks, none of the Borrowers or any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
ofss.406 of ERISA orss.4975 oF the Code which could result in a
material liability for any of the Borrowers; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of any of the Borrowers pursuant to ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant toss.307 of ERISA
orss.401(a)(29) of the Code; or
(e) take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans increasing by in excess of $250,000 (takinG
into account the cumulative effect of any prior such actions).
11.10. BUSINESS ACTIVITIES. None of the Borrowers will engage directly
or indirectly (whether through Subsidiaries or otherwise) in any type of
business other than the businesses conducted by it on the date hereof.
11.11. FISCAL YEAR; FISCAL QUARTERS. None of the Borrowers will change
the date of the end of its fiscal year or any of its fiscal quarters from that
set forth in ss.9.4.1.
11.12. TRANSACTIONS WITH AFFILIATES. Except as set forth in SCHEDULE
11.12, none of the Borrowers will engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Borrowers, any corporation, partnership, trust or other entity
in which any such Affiliate has a substantial interest or is an officer,
director, trustee or partner, on terms more favorable to such Person than would
have been obtainable on an arm's-length basis in the ordinary course of
business.
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11.13. BANK ACCOUNTS. None of the Borrowers will (i) establish any bank
accounts other than those listed on SCHEDULE 9.21 without the Administrative
Agent's prior written consent, (ii) violate directly or indirectly any Agency
Account Agreement with respect to such account, or (iii) deposit into any of the
payroll accounts listed on SCHEDULE 9.21 any amounts in excess of amounts
necessary to pay current payroll and related tax obligations from such accounts.
Upon the written consent of the Administrative Agent to the establishment of an
additional bank account pursuant to clause (i) of this ss.11.13, SCHEDULE 9.21
hereto will be amended to reflecT the addition of such bank account.
11.14. BANKRUPTCY CASES.
None of the Borrowers will seek, consent or suffer to exist (i) any
modification, stay, vacation or amendment to the Orders, unless the Agents have
consented to such modification, stay, vacation or amendment in writing, (ii) a
priority claim for any administrative expense or unsecured claim against any of
the Borrowers (now existing or hereafter arising of any kind or nature
whatsoever, including without limitation any administrative expense of the kind
specified in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or
superior to the priority claim of the Agents and the Banks in respect of the
Obligations or of the Prepetition Agents and the Prepetition Lenders in respect
of the Prepetition Indebtedness, except for the Carve Out; (iii) any cut off,
based on the "equities of the case" under Section 552(b) of the Bankruptcy Code,
of the Prepetition Administrative Agent's Lien on any proceeds, products or
profits of collateral securing the Prepetition Lender Debt at the time of the
commencement of the Cases; or (iv) any Lien on any Collateral, having a priority
equal or superior to the Lien in favor of the Administrative Agent in respect of
the Obligations or securing the Prepetition Lender Debt, except for Permitted
Prior Liens and for purchase money Liens entitled to priority under applicable
law.
11.15. PREPETITION INDEBTEDNESS. The Borrowers shall not pay or
discharge, or cause to be paid or discharged, any Indebtedness of any Borrower
incurred before the Filing Date other than payments:
(a) on Prepetition Lender Debt,
(b) approved by the Bankruptcy Court on or about the Filing
Date in connection the Borrowers' "first day orders",
(c) payments in respect of coverage for director and officer
liabilities and constituting the deductible amounts under applicable
director and officer insurance policies purchased by the Borrowers, to
the extent approved by the Bankruptcy Court and not exceeding the total
sum of $500,000,
(d) as required in the Reorganization Plan, on or about the
effective date of the Reorganization Plan, or
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(e) of severance and other payments approved by the Bankruptcy
Court.
None of the Borrowers shall file any motion with the Bankruptcy Court in
accordance with Section 546(g) of the Bankruptcy Code seeking to return any
goods shipped to any of the Borrowers prior to the Filing Date, without the
Agents' consent in writing. None of the Borrowers will amend, waive, or
otherwise modify any agreement supported by a letter of credit issued pursuant
to the Prepetition Credit Agreement that is not a Specified Existing Letter of
Credit.
12. FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Issuing Bank has any obligation to
issue, extend or renew any Letter of Credit:
12.1. MINIMUM ADJUSTED CONSOLIDATED EBITDA. The Borrowers will not
cause or permit Adjusted Consolidated EBITDA:
(a) for the month of January 2002 to be less than
($2,828,000);
(b) for the two-month period of January 2002 and February 2002
to be less than ($2,874,000); and
(c) for each consecutive three-month period ending at the end
of the month indicated in the table below to be less than the amount
set forth in the table opposite such period.
--------------------------------------------- -------------------------------------
Three-Month Period Ending Amount
--------------------------------------------- -------------------------------------
March 2002 $1,720,000
--------------------------------------------- -------------------------------------
April 2002 $7,327,000
--------------------------------------------- -------------------------------------
May 2002 $17,318,000
--------------------------------------------- -------------------------------------
June 2002 $23,533,000
--------------------------------------------- -------------------------------------
July 2002 $28,984,000
--------------------------------------------- -------------------------------------
August 2002 $32,458,000
--------------------------------------------- -------------------------------------
September 2002 $33,594,000
--------------------------------------------- -------------------------------------
October 2002 $32,976,000
--------------------------------------------- -------------------------------------
November 2002 $27,135,000
--------------------------------------------- -------------------------------------
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12.2. CUMULATIVE CASH FLOW. The Borrowers will not cause or permit
Cumulative Cash Flow for any period ending at the end of the month indicated in
the table below to be less than the amount set forth in the table opposite such
month.
--------------------------------------------- -------------------------------------
Month Ending Amount
--------------------------------------------- -------------------------------------
January 2002 ($5,834,000)
--------------------------------------------- -------------------------------------
February 2002 ($3,966,000)
--------------------------------------------- -------------------------------------
March 2002 ($7,786,000)
--------------------------------------------- -------------------------------------
April 2002 ($19,796,000)
--------------------------------------------- -------------------------------------
May 2002 ($21,366,000)
--------------------------------------------- -------------------------------------
June 2002 ($8,889,000)
--------------------------------------------- -------------------------------------
July 2002 ($10,906,000)
--------------------------------------------- -------------------------------------
August 2002 $4,736,000
--------------------------------------------- -------------------------------------
September 2002 $20,823,000
--------------------------------------------- -------------------------------------
October 2002 $16,795,000
--------------------------------------------- -------------------------------------
November 2002 $35,957,000
--------------------------------------------- -------------------------------------
12.3. CAPITAL EXPENDITURES. The Borrowers will not cause or permit the
aggregate amount of Capital Expenditures of the Borrowers made for any period
commencing with the Filing Date and ending at the end of any month indicated in
the table below to be greater than the amount set forth in the table opposite
such month.
--------------------------------------------- -------------------------------------
Month Ending Amount
--------------------------------------------- -------------------------------------
January 2002 $4,197,000
--------------------------------------------- -------------------------------------
February 2002 $9,252,000
--------------------------------------------- -------------------------------------
March 2002 $18,325,000
--------------------------------------------- -------------------------------------
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--------------------------------------------- -------------------------------------
April 2002 $26,559,000
--------------------------------------------- -------------------------------------
May 2002 $31,085,000
--------------------------------------------- -------------------------------------
June 2002 $32,243,000
--------------------------------------------- -------------------------------------
July 2002 $33,291,000
--------------------------------------------- -------------------------------------
August 2002 $34,765,000
--------------------------------------------- -------------------------------------
September 2002 $35,814,000
--------------------------------------------- -------------------------------------
October 2002 $36,695,000
--------------------------------------------- -------------------------------------
November 2002 $37,576,000
--------------------------------------------- -------------------------------------
12.4. BASE CAPITAL EXPENDITURES. The Borrowers will not cause or permit
the aggregate amount of Base Capital Expenditures of the Borrowers made for any
period commencing with the Filing Date and ending at the end of any month
indicated in the table below to be greater than the amount set forth in the
table opposite such month.
--------------------------------------------- -------------------------------------
Month Ending Amount
--------------------------------------------- -------------------------------------
January 2002 $2,072,000
--------------------------------------------- -------------------------------------
February 2002 $4,577,000
--------------------------------------------- -------------------------------------
March 2002 $10,675,000
--------------------------------------------- -------------------------------------
April 2002 $16,359,000
--------------------------------------------- -------------------------------------
May 2002 $19,610,000
--------------------------------------------- -------------------------------------
June 2002 $20,768,000
--------------------------------------------- -------------------------------------
July 2002 $22,816,000
--------------------------------------------- -------------------------------------
August 2002 $22,865,000
--------------------------------------------- -------------------------------------
September 2002 $23,914,000
--------------------------------------------- -------------------------------------
October 2002 $24,795,000
--------------------------------------------- -------------------------------------
November 2002 $25,676,000
--------------------------------------------- -------------------------------------
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13. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Loans or to issue,
extend or renew any Letters of Credit on the Closing Date shall be subject to
the satisfaction of the following conditions precedent on or prior to January
11, 2002, unless such date is extended by the Administrative Agent in writing:
13.1. INTERIM ORDER; FINAL ORDER. The Cases shall have commenced on or
prior to January 11, 2002, and the Bankruptcy Court shall have entered the
Interim Order or the Final Order and such Order shall be in full force and
effect and shall not have been amended, modified, stayed, or reversed. If either
the Interim Order or the Final Order is the subject of a pending appeal in any
respect, none of such Orders, the making of the Loans, the issuance, extension
or renewal of any Letters of Credit, or the performance by any of the Borrowers
of any of the Obligations shall be the subject of a presently effective stay
pending appeal. The Borrowers, the Agents, the Banks, the Prepetition Agents and
the Prepetition Lenders shall be entitled to rely in good faith upon each of the
Orders notwithstanding objection thereto or appeal therefrom by any interested
party. The Borrowers, the Agents and the Banks shall be permitted and required
to perform their respective obligations in compliance with this Credit
Agreement, notwithstanding any such objection or appeal unless and for so long
as the relevant Order has been stayed by a court of competent jurisdiction.
13.2. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
13.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from each of the Borrowers a copy, certified by a duly authorized
officer of such Person to be true and complete on the Closing Date, of each of
(i) its charter or other incorporation documents as in effect on such date of
certification, and (ii) its by-laws as in effect on such date.
13.4. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by each of the Borrowers of this Credit
Agreement and the other Loan Documents to which it is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Banks shall have been provided to each of the Banks.
13.5. INCUMBENCY CERTIFICATE. The Administrative Agent shall have
received from each of the Borrowers an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Borrower, and giving
the name and bearing a specimen signature of each individual who shall be
authorized: (i) to sign, in the name and on behalf of each such Borrower, each
of the Loan Documents to which such Borrower is or is to become a party; (ii) to
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make Loan Requests and to apply for Letters of Credit; and (iii) to give notices
and to take other action on its behalf under the Loan Documents.
13.6. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received (i) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions hereof and the Security Documents and
(ii) certified copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the insurer).
13.7. OPINIONS OF COUNSEL. Each of the Banks and the Agents shall have
received a favorable legal opinion addressed to the Banks and the Agents, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agents, from counsel to the Borrowers and, to the extent requested by the
Administrative Agent, from local counsel.
13.8. PAYMENT OF FEES. The Borrowers shall have paid, or be
concurrently tendering, to the Administrative Agent, for the accounts of the
Banks, the Agents and the Arranger, as applicable, the fees to be paid on the
Closing Date. The Borrowers shall also have paid to the Administrative Agent and
the Prepetition Administrative Agent the amount of any fees or expenses for
which the Borrowers are responsible under ss.18.1 oR under any like provision of
the Prepetition Credit Agreement and for which invoices have been provided.
13.9. PERFECTION CERTIFICATES AND SEARCH RESULTS. The Administrative
Agent shall have received from each of the Borrowers a Perfection Certificate
(as defined in the Security Agreement) and, except to the extent agreed in
writing by the Administrative Agent to be completed on a post-closing basis, the
results of Uniform Commercial Code searches with respect to the Collateral and
the other assets of each of the Borrowers, indicating no Liens other than
Permitted Liens and otherwise in form and substance satisfactory to the
Administrative Agent.
13.10. VALIDITY OF LIENS. The Security Documents shall, upon entry of
the Interim Order or the Final Order, whichever occurs first, be effective to
create in favor of the Administrative Agent and the Administrative Agent, as
appropriate, for the benefit of the Banks and the Agents, a legal, valid and
enforceable first priority (except for Permitted Liens entitled to priority
under applicable law) Lien upon the Collateral. All filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
opinion of the Administrative Agent to protect and preserve such Liens shall
have been duly effected. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.
13.11. FIRST DAY ORDERS. All cash management and other "first day
orders" submitted for entry on or about the date of the commencement of the
Cases shall be in form and substance satisfactory to the Administrative Agent
and, as entered, shall not deviate from the form thereof approved by the
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Administrative Agent in any material respect which is adverse to the interests
of the Banks or to the Prepetition Lenders under the Prepetition Credit
Agreement.
13.12. AMENDMENT TO PREPETITION CREDIT AGREEMENT. An amendment to the
Prepetition Credit Agreement, in form and substance satisfactory to the
Borrowers, the Agents, the Prepetition Lenders and the Prepetition Agents, shall
have been duly executed and delivered by the respective parties thereto, and
shall be in full force and effect. The amendment shall provide, among other
things, for (i) consent to the use, sale and lease of collateral securing the
Prepetition Lender Debt, including the use of cash collateral, and for the Carve
Out and the priming Liens securing the Obligations to be senior to the Liens
securing the Prepetition Lender Debt, in exchange for the adequate protection
for the Prepetition Agents and the Prepetition Lenders contemplated hereby, (ii)
the Prepetition Revolver and the Term Loan to bear interest at the Eurodollar
Rate (as defined in the Prepetition Credit Agreement) with interest periods of
not more than three months, and (iii) certain intercreditor arrangements among
the Prepetition Lenders.
The Administrative Agent may in its discretion defer, and thereby waive as a
closing condition under this ss.13, the execution and delivery of one or more of
the Loan Documents (other than this Credit Agreement, the Notes, the Fee Letter
and the Security Agreement) or the execution, delivery or provision any of the
documents or other items to be executed and delivered or provided pursuant to
ss.ss.13.6, 13.7, 13.9, and 13.10 (other than the fiRsT sentence) and the
satisfaction of any condition related thereto. In the event of such a deferral
and waiver as to any Loan Document or other document or item, the Borrowers
agree to execute and deliver such Loan Document or, as the case may be, execute
and deliver or provide such other document or item as soon as practicable
following the Closing Date. Any such Loan Document or other document or item
shall in any event be required to be executed and delivered or, as the case may
be, executed and delivered or provided, and such condition shall be required to
be satisfied, as a condition to the increase in the Total Commitment as
contemplated by clause (ii) in the definition of that term.
14. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan and of the Issuing Bank
to issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
14.1. INTERIM ORDER OR FINAL ORDER. The Bankruptcy Court shall have
entered the Interim Order or the Final Order and such Order shall be in full
force and effect and shall not have been amended, modified, stayed, or reversed.
If either the Interim Order or the Final Order is the subject of a pending
appeal in any respect, none of such Orders, the making of the Loans, the
issuance, extension or renewal of any Letters of Credit, or the performance by
any of the Borrowers of any of the Obligations shall be the subject of a
presently effective stay pending appeal. The Borrowers, the Agents, the Banks,
the Prepetition Agents and the Prepetition Lenders shall be entitled to rely in
good faith upon each of the Orders
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notwithstanding objection thereto or appeal therefrom by any interested party.
The Borrowers, the Agents, the Banks, the Prepetition Agents and the Prepetition
Lenders shall be permitted and required to perform their respective obligations
in compliance with this Credit Agreement, notwithstanding any such objection or
appeal unless the relevant Order has been stayed by a court of competent
jurisdiction.
14.2. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrowers contained in this Credit
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance of such Letter of Credit, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing or would result from the making of
such Loan.
14.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Issuing Bank would make it illegal for the Issuing
Bank to issue, extend or renew such Letter of Credit.
14.4. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
14.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Agents and the Agents' Special
Counsel, and the Banks, the Agents and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as either Agent or such counsel may reasonably request.
14.6. PAYMENT OF FEES.The Borrowers shall have paid all fees, expenses
and other amounts then due and owing on the Drawdown Date of such Loan or the
date of the issuance, extension or renewal of such Letter of Credit.
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15. EVENTS OF DEFAULT; ACCELERATION; ETC.
15.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "DEFAULTS") shall
occur:
(a) any of the Borrowers shall fail to pay any principal of,
or interest on the Loans or any Reimbursement Obligation or any Letter
of Credit Fee, commitment fee, or other fee or expense hereunder when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment;
(b) any of the Borrowers shall fail to comply with any of
their covenants contained in ss.10, 11 or 12;
(c) any of the Borrowers shall fail to perform any term,
covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this ss.15.1) anD
such default shall continue for a period of ten (10) days after the
occurrence thereof;
(d) any representation or warranty of any of the Borrowers in
this Credit Agreement or any of the other Loan Documents or in any
other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
(e) any of the Borrowers shall default in the payment when due
of any principal of or interest on any postpetition Indebtedness, or
any pre-petition Indebtedness if, by order of the Bankruptcy Court
issued with respect to such pre-petition Indebtedness, the default
thereunder entitles the holder thereof to relief from the automatic
stay of ss.362 of the Bankruptcy Code, in excess oF $250,000 in the
aggregate of such postpetition or pre-petition Indebtedness, or any
event specified in any note, agreement, indenture or other document
evidencing or securing any such postpetition Indebtedness shall occur
if the effect of such event is to cause, or (with the giving of notice
or the lapse of time or both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause such Indebtedness to become due, or to be prepaid in
full prior to its stated maturity; or any of the Borrowers shall
default in the payment when due of any amount in excess of $250,000 in
the aggregate under any postpetition Derivative Transaction, or any
event specified in any postpetition Derivative Transaction to which any
of the Borrowers is a party shall occur if the effect of such event is
to cause, or (with the giving of notice or the lapse of time or both)
to permit, termination or liquidation payments in respect of such
postpetition Derivative Transaction in excess of $250,000 to become
due;
(f) any of the Borrowers shall be enjoined from conducting any
part of its business as a debtor in possession, there shall occur any
act of terrorism or other "force majeure" event disrupting any material
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portion of the businesses of the Borrowers, or there shall occur any
loss or change in any license or permit of any of the Borrowers, which
in each such case referred to this clause (f) would reasonably be
expected to have a material adverse effect on the Borrowers, considered
as a whole;
(g) IF ANY OF THE LOAN DOCUMENTS OR ANY OF THE DOCUMENTS
CREATING OR EVIDENCING ANY OF THE PREPETITION LENDER DEBT SHALL BE
CANCELLED, TERMINATED, REVOKED OR RESCINDED; OR THE ADMINISTRATIVE
AGENT'S LIEN ON ANY OF THE COLLATERAL OR ANY OF THE LIENS SECURING THE
PREPETITION LENDER DEBT SHALL CEASE TO BE PERFECTED OR HAVE THE
PRIORITY CONTEMPLATED BY THIS CREDIT AGREEMENT, THE PREPETITION CREDIT
AGREEMENT, OR THE ORDERS, AS THE CASE MAY BE, OR ANY ACTION AT LAW,
SUIT OR IN EQUITY OR OTHER LEGAL PROCEEDING TO CANCEL, REVOKE, RESCIND
OR OTHERWISE CHALLENGE ANY OF THE LOAN DOCUMENTS OR THE PREPETITION
LENDER DEBT OR THE LIENS SECURING THE OBLIGATIONS OR THE PREPETITION
LENDER DEBT SHALL BE COMMENCED BY ANY OF THE BORROWERS; OR ANY COURT OR
ANY OTHER GOVERNMENTAL OR REGULATORY AUTHORITY OR AGENCY OF COMPETENT
JURISDICTION SHALL MAKE A DETERMINATION THAT, OR ISSUE A JUDGMENT,
ORDER, DECREE OR RULING TO THE EFFECT THAT, ANY ONE OR MORE OF THE LOAN
DOCUMENTS OR ANY OF THE DOCUMENTS CREATING OR EVIDENCING ANY OF THE
PREPETITION LENDER DEBT IS ILLEGAL, INVALID OR UNENFORCEABLE IN
ACCORDANCE WITH THE TERMS THEREOF;
(h) (i) any of the Borrowers or any ERISA Affiliate incurs any
liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV
of ERISA in an amount in excess of $250,000; (ii) any of the Borrowers
or any ERISA Affiliate is assessed withdrawal liability pursuant to
Title IV of ERISA by a Multiemployer Plan in an amount in excess of
$250,000; (iii) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA in an amount iN excess of $250,000 shall occur
and the Administrative Agent determines in its reasonable discretion
that such event could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan or for the imposition of a lien in favor
of such Guaranteed Pension Plan; (iv) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (v) the institution by the PBGC of proceedings to
terminate such Guaranteed Pension Plan;
(i) there shall occur any material damage to, or loss, theft
or destruction of any material item of Collateral which is not insured
or which is insured but as to which loss, theft or destruction, the
insurance proceeds relating thereto have not been paid to the
Administrative Agent, for the benefit of the Banks and the Agents, in
accordance with the terms of the Security Documents;
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(j) the Bankruptcy Court shall enter any order (i) amending,
supplementing, altering, staying, vacating, rescinding or otherwise
modifying any Order or any other order with respect to any of the Cases
affecting in any material respect this Credit Agreement or the
Prepetition Credit Agreement, (ii) appointing a chapter 11 trustee or
an examiner with enlarged powers relating to the operation of the
business (powers beyond those set forth in Section 1106(a)(3) and (4)
of the Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code in
any of the Cases, (iii) dismissing any of the Cases or converting any
of the Cases to a chapter 7 case, or (iv) granting relief from the
automatic stay to any creditor holding or asserting a Lien or
reclamation claim on a material portion (i.e., more than $250,000 in
the aggregate) of the assets of any of the Borrowers or where the
deprivation of any of the Borrowers of such assets would reasonably be
expected to have a material adverse effect on the Borrowers, considered
as a whole;
(k) the Bankruptcy Court shall fail to enter the Final Order
by January 31, 2002;
(l) an application shall be filed by any of the Borrowers for
the approval of any other Superpriority Claim (exclusive of the
Superpriority Claim in favor of the Prepetition Lenders) in any of the
Cases which is PARI PASSU with or senior to the claims of the
Administrative Agent and the Banks against any of the Borrowers unless
after giving effect to the transactions contemplated by such
application, all Obligations and the Prepetition Lender Debt (whether
contingent or otherwise) shall be paid in full in cash and the
Commitments shall be terminated), or there shall arise any such
Superpriority Claim;
(m) any of the Borrowers shall be unable to pay its
postpetition debts as they mature, shall fail to comply with any order
of the Bankruptcy Court in any material respect, or shall fail to make,
as and when such payments become due or otherwise, any adequate
protection payments with respect to the Prepetition Debt which are
required or permitted by the Orders or any other order of the
Bankruptcy Court;
(n) there shall remain undischarged for more than thirty (30)
days any final postpetition judgment or execution action against any of
the Borrowers, or relief from the automatic stay of Section 362(a) of
the Bankruptcy Code shall be granted to any creditor or creditors of
any of the Borrowers with respect to assets having an aggregate value
in excess of $250,000 or where the deprivation of any of the Borrowers
of such assets would reasonably be expected to have a material adverse
effect on the Borrowers, considered as a whole;
(o) ANY OF THE BORROWERS SHALL FILE A MOTION IN ANY OF THE
CASES (I) EXCEPT FOR THE PAYMENT OF PAYROLL AND PAYROLL-RELATED
EXPENSES AND AS OTHERWISE PROVIDED IN THE ORDERS, TO USE CASH
COLLATERAL OF THE BANKS OR OF THE PREPETITION LENDERS UNDER SECTION
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363(C) OF THE BANKRUPTCY CODE WITHOUT THE BANKS' AND THE PREPETITION
LENDERS' CONSENT, (II) TO RECOVER FROM ANY PORTIONS OF THE COLLATERAL
ANY COSTS OR EXPENSES OF PRESERVING OR DISPOSING OF SUCH COLLATERAL
UNDER SECTION 506(C) OF THE BANKRUPTCY CODE, TO CUT OFF RIGHTS IN THE
COLLATERAL UNDER SECTION 552(B) OF THE BANKRUPTCY CODE, OR (III) TO
TAKE ANY OTHER ACTION OR ACTIONS ADVERSE TO THE BANKS OR THE
PREPETITION LENDERS OR THEIR RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY
OF THE OTHER LOAN DOCUMENTS OR ANY OF THE DOCUMENTS EVIDENCING OR
CREATING ANY OF THE PREPETITION LENDER DEBT OR THE BANKS' OR THE
PREPETITION LENDERS' INTEREST IN ANY OF THE COLLATERAL;
(p) A SUIT OR ACTION AGAINST ANY OF THE BANKS, THE AGENTS, THE
PREPETITION AGENTS, OR THE PREPETITION LENDERS SHALL BE COMMENCED BY
ANY OF THE BORROWERS OR THE PREPETITION BORROWERS, ANY FEDERAL, STATE
ENVIRONMENTAL PROTECTION OR HEALTH AND SAFETY AGENCY OR ANY OFFICIAL
COMMITTEE IN ANY CASE, WHICH SUIT OR ACTION ASSERTS ANY CLAIM OR LEGAL
OR EQUITABLE REMEDY CONTEMPLATING SUBORDINATION OF ANY CLAIM OR LIEN OF
THE BANKS, THE AGENTS, THE PREPETITION LENDERS, OR THE PREPETITION
AGENTS, AND SHALL REMAIN UNDISMISSED OR UNSTAYED FOR THIRTY (30) DAYS
AFTER ITS COMMENCEMENT WITHOUT ANY PRELIMINARY RELIEF OF THE NATURE
SOUGHT HAVING BEEN GRANTED; AND, WITH RESPECT TO ANY SUIT OR ACTION BY
ANY SUCH FEDERAL OR STATE AGENCY OR OFFICIAL COMMITTEE, A PRELIMINARY
ORDER FOR RELIEF OR JUDGMENT OR DECREE SHALL HAVE BEEN ENTERED IN SUCH
SUIT OR ACTION AGAINST THE BANKS, THE AGENTS, THE PREPETITION AGENTS,
OR THE PREPETITION LENDERS AND, IN THE CASE OF A PRELIMINARY ORDER,
SUCH PRELIMINARY ORDER HAS NOT BEEN STAYED WITHIN TEN (10) DAYS AFTER
ITS ENTRY;
(q) (i) the failure to submit to the Agents, the Banks, the
Prepetition Agents and the Prepetition Lenders by February 28, 2002,
the Borrowers' business plan addressing the restructuring of the
Borrowers' business operations; (ii) the failure to submit to the
Agents, the Banks, the Prepetition Agents and the Prepetition Lenders
by March 31, 2002, the Borrowers' capital restructuring plan; (iii) the
failure to file by June 30, 2002, a Reorganization Plan and a
disclosure statement consistent with the business and capital
restructuring plans; and (iv) unless waived by the Required Lenders and
the Agents in connection with the extension of the Termination Date as
contemplated by the definition of that term, the failure of such
Reorganization Plan to become effective within 12 months following the
Closing Date;
(r) the subordination terms of the Subordinated Debt or any
other prepetition subordination agreements in favor of any of the
Prepetition Lenders or the Banks shall not be enforceable by any of the
Prepetition Lenders, the Prepetition Agents, the Banks, or the Agents;
or
(s) the occurrence of an event of default or contempt under
either of the Orders;
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then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Banks shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by each of the Borrowers.
15.2. TERMINATION OF COMMITMENTS. If any Event of Default shall have
occurred and be continuing, the Administrative Agent may and, upon the request
of the Required Banks, shall, by notice to the Borrowers, terminate the unused
portion of the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and each of the
Banks shall be relieved of all further obligations to make Loans and the Issuing
Bank shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. No termination of the credit hereunder shall relieve any of
the Borrowers of any of the Obligations.
15.3. REMEDIES. Upon the occurrence of an Event of Default, the
Administrative Agent shall provide the Borrowers, the United States Trustee and
the Creditors' Committee with five Business Days prior notice to the exercise of
remedies under this section and under the Security Documents, which such notice
will specify the Event of Default and the basis therefor and will be given by
the Administrative Agent via facsimile to counsel to both the Borrowers, the
United States Trustee and the Creditors' Committee. During such five Business
Day notice period, the Borrowers have the right to seek an emergency hearing
before the Bankruptcy Court for the sole purpose of determining whether an Event
of Default has occurred; PROVIDED that the Borrowers shall have no right to use
or seek to use the Collateral during such five Business Day notice period,
except for the payment of payroll and payroll-related expenses. Unless during
such five Business Day notice period the Bankruptcy Court determines that an
Event of Default has not occurred, upon the expiration of such five Business Day
notice period (a) the Administrative Agent shall have relief from the automatic
stay and may foreclose on all or any portion of the Collateral or otherwise
exercise remedies against the Collateral permitted by the Security Documents and
other nonbankruptcy law, including, without limitation, the exercise of rights
of setoff and the maintenance of cash collateral in an amount equal to 105% of
the Maximum Amount of the Letters of Credit, (b) the Prepetition Administrative
Agent shall likewise thereafter have relief from the automatic stay and may
foreclose on all or any portion of the collateral securing the Prepetition
Indebtedness or otherwise exercise remedies against such collateral permitted by
the "Security Documents" (as defined in the Prepetition Credit Agreement) and
other nonbankruptcy law, including, without limitation, the exercise of rights
of setoff and the maintenance of cash collateral, and (c) any right of any of
the Borrowers to use cash collateral shall cease.
In addition, at the expiration of any five Business Day notice period
referred to above, in case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
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the maturity of the Loans pursuant to ss.15.1, each Bank, if owed any amount
with respect to the Loans, Reimbursement Obligations or other Obligations, may,
and the Administrative Agent may, if requested by the Required Banks and in its
sole discretion, on behalf of the Banks, proceed to protect and enforce its
rights by suit in equity, action at law or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this
Credit Agreement and the other Loan Documents or any instrument pursuant to
which the Obligations to such Bank are evidenced, including as permitted by
applicable law the obtaining of the EX PARTE appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such Bank.
No remedy herein conferred upon any Bank or the Administrative Agent or the
holder of any Note or the purchaser of any Letter of Credit Participation is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
15.4. DISTRIBUTION OF COLLATERAL PROCEEDS.
(a) In the event that, following the Termination Declaration
Date, either Agent or any Bank, as the case may be, receives any monies
in connection with the enforcement of any of the Security Documents, or
otherwise with respect to the realization upon any of the Collateral,
such monies shall be applied to the Obligations and to the Prepetition
Lender Debt as follows:
(i) first, to the payment of, or (as the case may be)
the reimbursement of the Agents for or in respect of all
reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Agents in
connection with the collection of such monies by either Agent,
for the exercise, protection or enforcement by either Agent of
all or any of the rights, remedies, powers and privileges of
either Agent under this Credit Agreement or any of the other
Loan Documents or in respect of the Collateral or in support
of any provision of adequate indemnity to the Agents against
any taxes or liens which by law shall have, or may have,
priority over the rights of the Agents to such monies;
(ii) second, to pay interest on, and then principal
of, Swing Line Loans;
(iii) third, to pay interest on the Loans (other than
Swing Line Loans) then due and payable;
(iv) fourth, to any other Obligations then due and
payable;
(v) fifth, to pay the principal of Loans (it being
understood that such repayment shall be accompanied by a
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permanent reduction in the Total Commitment (if then in
effect) in the amount of such repayment);
(vi) sixth, to cash collateralize Letters of Credit
in an amount equal to 105% of the Maximum Drawing Amount
thereof;
(vii) SEVENTH, TO PAY INTEREST ON THE TERM LOAN, THE
PREPETITION REVOLVER AND ANY OTHER PREPETITION LENDER DEBT
OTHER THAN PRINCIPAL OF THE TERM LOAN AND THE PREPETITION
REVOLVER;
(viii) EIGHTH, TO PAY ANY PRINCIPAL OF THE TERM LOAN
AND THE PREPETITION REVOLVER;
(ix) NINTH, UPON PAYMENT AND SATISFACTION IN FULL OR
OTHER PROVISIONS FOR PAYMENT IN FULL SATISFACTORY TO THE BANKS
AND THE ADMINISTRATIVE AGENT OF ALL OF THE OBLIGATIONS AND TO
THE PREPETITION LENDERS OF ALL OF THE PREPETITION LENDER DEBT,
TO THE PAYMENT OF ANY OBLIGATIONS REQUIRED TO BE PAID PURSUANT
TO SS.9-608(A)(1)(C) OR 9-615(A)(3) OF THE UNIFORM COMMERCIAL
CODE; AND
(x) tenth, the excess, if any, shall be returned to
the Borrowers or to such other Persons as are entitled
thereto.
(b) (i) With respect to each type of Obligation owing to the
Banks or Prepetition Lender Debt owing to the Prepetition Lenders, such
as interest, principal, fees and expenses, all payments shall be made
to the Banks or the Prepetition Lenders, as the case may be, PRO RATA,
and (ii) the Administrative Agent may in its discretion make proper
allowance on a PRO RATA basis among the Banks or the Prepetition
Lenders to take into account any Obligations or Prepetition Lender Debt
not then due and payable.
(c) None of the Agents and the Banks shall be subject to
marshalling. HOWEVER, UPON THE COLLECTION OR DISPOSITION OF COLLATERAL
SECURING BOTH THE OBLIGATIONS AND THE PREPETITION DEBT, THE PROCEEDS
THEREOF OTHERWISE TO BE APPLIED PURSUANT TO THIS SS.15.4 TO THE
OBLIGATIONS MAY, IN THE DISCRETION OF THE AGENTS AND THE MAJORITY
BANKS, BE APPLIED TO THE PREPETITION LENDER DEBT.
16. SHARING OF SET-OFFS, ETC.
Each of the Banks agrees with each other Bank that if such Bank shall
receive from any of the Borrowers, whether by voluntary payment, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by or
constituting Reimbursement Obligations owed to such Bank, by proceedings against
any of the Borrowers at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by or
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Reimbursement Obligations owing to such Bank, any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by and Reimbursement Obligations owing to all of the Banks, such Bank
will make such disposition and arrangements with the other Banks with respect to
such excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by, or Reimbursement Obligations owing to it, its proportionate
payment as contemplated by this Credit Agreement; PROVIDED that if all or any
part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
17. THE AGENTS.
17.1. AUTHORIZATION.
(a) The Agents are authorized to take such action on behalf of
each of the Banks and, in so far as such action relates to them, the
Prepetition Lenders and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents
delegated to the Agents, together with such powers as are reasonably
incident thereto, PROVIDED that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agents.
(b) The relationship between each Agent and each of the Banks
and, in so far as such action relates to them, the Prepetition Lenders
is that of an independent contractor. The use of the term "Agent" is
for convenience only and such term is used to describe, as a form of
convention, the independent contractual relationship between either
Agent and each of the Banks or, in so far as such action relates to
them, the Prepetition Lenders. Nothing contained in this Credit
Agreement or the other Loan Documents shall be construed to create an
agency, trust or other fiduciary relationship between either Agent and
any of the Banks or, in so far as such action relates to them, the
Prepetition Lenders.
(c) As an independent contractor empowered by the Banks and,
in so far as such action relates to them, the Prepetition Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, each Agent is
nevertheless a "representative" of the Banks and, in so far as such
action relates to them, the Prepetition Lenders, as that term is
defined in Article 1 of the Uniform Commercial Code, for purposes of
actions for the benefit of the Banks or, in so far as such action
relates to them, the Prepetition Lenders and the Administrative Agent
with respect to all collateral security and guaranties contemplated by
the Loan Documents. Such actions include the designation of the
Administrative Agent as "secured party", "mortgagee" or the like on all
financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any Liens in collateral security intended to secure
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the payment or performance of any of the Obligations or any of the
Prepetition Lender Debt, all for the benefit of the Banks, the Agents,
the Prepetition Lenders and the Prepetition Agents.
(d) In addition, to the extent deemed necessary or advisable
by the Administrative Agent in order to receive and hold the security
interest contemplated by the Security Documents, but without conflict
with the provisions of ss.17.1(b), each of the Banks hereby appoints
Fleet National Bank, in itS capacity as Administrative Agent, and any
successor Administrative Agent, to act as trustee/mortgagee on its
behalf and the Administrative Agent hereby accepts such appointment.
The provisions of this ss.17 shall apply to such appointment as well.
17.2. EMPLOYEES AND AGENT. Each Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. Each
Agent may utilize the services of such Persons as such Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers, subject to any limitations therefor
provided in ss.18.1.
17.3. NO LIABILITY. Neither Agent or nor any of its shareholders,
directors, officers or employees or any other Person assisting such Agent in its
duties or any agent or employee thereof, shall be liable for any waiver, consent
or approval given or any action taken, or omitted to be taken, in good faith by
it or them hereunder or under any of the other Loan Documents, or in connection
herewith or therewith, or be responsible for the consequences of any oversight
or error of judgment whatsoever, except that such Agent or such other Person, as
the case may be, may be liable for losses due to its willful misconduct or gross
negligence.
17.4. NO REPRESENTATIONS.
17.4.1. GENERAL. Neither Agent shall be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Obligations, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes or
the Letters of Credit, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in
any certificate or instrument hereafter furnished to it by or on behalf
of any of the Borrowers, nor shall either Agent be bound to ascertain
or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any
time constituting, or intended to constitute, collateral security for
the Obligations or the Prepetition Lender Debt or to inspect any of the
properties, books or records of any of the Borrowers. Neither Agent
shall be bound to ascertain whether any notice, consent, waiver or
request delivered to it by any of the Borrowers or any holder of any of
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the Notes shall have been duly authorized or is true, accurate and
complete. Neither Agent has made nor does it now make any
representations or warranties, express or implied, nor does it assume
any liability to the Banks, with respect to the credit worthiness or
financial condition of any of the Borrowers. Each Bank acknowledges
that it has, independently and without reliance upon either Agent or
any other Bank, and based upon such information and documents as it has
deemed appropriate, made its own credit analysis and decision to enter
into this Credit Agreement.
17.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.13, each
Bank that has executed this Credit Agreement shall be deemed to havE
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by either Agent to
such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Bank, unless an officer of the Administrative
Agent active upon the Borrowers' account shall have received notice
from such Bank prior to the Closing Date specifying such Bank's
objection thereto and such objection shall not have been withdrawn by
notice to the Administrative Agent to such effect on or prior to the
Closing Date.
17.5. PAYMENTS.
17.5.1. PAYMENTS TO AGENT. A payment by the Borrowers to the
Administrative Agent hereunder or any of the other Loan Documents for
the account of any Bank shall constitute a payment to such Bank. The
Administrative Agent agrees promptly to distribute to each Bank such
Bank's PRO RATA share of payments received by the Administrative Agent
for the account of the Banks except as otherwise expressly provided
herein or in any of the other Loan Documents.
17.5.2. DISTRIBUTION BY AGENT. If in the opinion of the
Administrative Agent the distribution of any amount received by it in
such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to
such Persons as shall be determined by such court.
17.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (i) to make available to the
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Administrative Agent its PRO RATA share of any Loan or to purchase any
Letter of Credit Participation or (ii) to comply with the provisions of
ss.17 with respect to making dispositions and arrangements with thE
other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its PRO RATA share of such
payments due and payable to all of the Banks, in each case as, when and
to the full extent required by the provisions of this Credit Agreement,
shall be deemed delinquent (a "DELINQUENT BANK") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrowers, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of,
their respective PRO RATA shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Administrative Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations. A Delinquent
Bank shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all
outstanding Loans and Unpaid Reimbursement Obligations of the
nondelinquent Banks, the Banks' respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations have returned to
those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
17.6. HOLDERS OF NOTES. Each Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
17.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless each Agent and its affiliates and the Issuing Bank from and against any
and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which either Agent, the
Issuing Bank or such affiliate has not been reimbursed by the Borrowers as
required by ss.18), and liabilities of every nature anD character arising out of
or related to this Credit Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
either Agent's or the Issuing Bank's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by the such
Agent's or the Issuing Bank's willful misconduct or gross negligence.
17.8. AGENT AS BANKS. In its individual capacity, each of Fleet
National Bank, any successor Administrative Agent and any successor Syndication
Agent shall have the same obligations and the same rights, powers and privileges
in respect to its Commitment and the Loans made by it, and as the holder of any
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of the Notes and the purchaser of any Letter of Credit Participation, as it
would have were it not also an Agent.
17.9. RESIGNATION. Either Agent or the Issuing Bank may resign at any
time by giving sixty (60) days prior written notice thereof to the Banks and the
Borrowers. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Agent or Issuing Bank. Unless a Default or Event of Default
shall have occurred and be continuing, such successor Agent or Issuing Bank
shall be reasonably acceptable to the Borrowers. If no successor Agent or
Issuing Bank shall have been so appointed by the Required Banks and shall have
accepted such appointment within thirty (30) days after the retiring Agent's or
Issuing Bank's giving of notice of resignation, then the retiring Agent or
Issuing Bank may, on behalf of the Banks, appoint a successor Agent or Issuing
Bank, which shall be a financial institution having a rating of not less than A
or its equivalent by Standard & Poor's Corporation. Upon the acceptance of any
appointment as Agent or Issuing Bank hereunder by a successor Agent or Issuing
Bank, such successor Agent or Issuing Bank shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
or Issuing Bank, and the retiring Agent or Issuing Bank shall be discharged from
its duties and obligations hereunder. After any retiring Agent's or Issuing
Bank's resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent or Issuing Bank.
17.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Agents hereby
agree that upon receipt of any notice under this ss.17.10 they shall promptly
notify the otheR Banks of the existence of such Default or Event of Default.
17.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (i)
so requested by the Required Banks and (ii) the Banks have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Required Banks may direct the Administrative Agent in
writing as to the method and the extent of any such sale or other disposition,
the Banks hereby agreeing to indemnify and hold the Administrative Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Administrative
Agent need not comply with any such direction to the extent that the
Administrative Agent reasonably believes the Administrative Agent's compliance
with such direction to be unlawful or commercially unreasonable in any
applicable jurisdiction.
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18. EXPENSES AND INDEMNIFICATION.
18.1. EXPENSES. The Borrowers jointly and severally agree to pay (i)
the reasonable costs of producing and reproducing this Credit Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(ii) any taxes (including any interest and penalties in respect thereto) payable
by either Agent or any of the Banks (other than taxes based upon either Agent's
or any Bank's net income) on or with respect to the transactions contemplated by
this Credit Agreement (the Borrowers hereby agreeing to jointly and severally
indemnify each Agent and each Bank with respect thereto), (iii) the reasonable
fees, expenses and disbursements of the Agents' Special Counsel, additional
special counsel to the Agents and any local counsel to the Agents incurred in
connection with the preparation, execution, delivery, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, any cash management documentation and related matters, each
closing hereunder, any amendments, modifications, approvals, consents or waivers
hereto or hereunder, the cancellation of any Loan Document upon payment in full
in cash of all of the Obligations and the termination of the Commitments or
pursuant to any terms of such Loan Document providing for such cancellation, or
services rendered in connection with representing the Agents and the Banks in
the chapter 11 or 7 cases of the Borrowers, (iv) the fees, expenses and
disbursements of each of the Agents or any of its affiliates incurred by such
Agent or such affiliate in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, including fees, expenses and disbursements associated with
collateral examination and appraisals and environmental surveys, (v) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or
either Agent, and reasonable consulting, accounting, appraisal, investment
banking and similar professional fees and charges) incurred by any Bank or
either Agent in connection with (A) the enforcement of or preservation of rights
under any of the Loan Documents against any of the Borrowers or the
administration thereof after the occurrence of an Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or such Agent's relationship with any of the
Borrowers, (vi) all reasonable fees, expenses and disbursements of any Bank or
either Agent and their counsel incurred in connection with the filing and
recordation of the Administrative Agent's liens and security interests pursuant
to the Security Documents and with UCC searches any fees, costs and expenses and
bank charges, including bank charges for returned checks, incurred by the
Administrative Agent or any Bank in establishing, maintaining or handling agency
accounts, lock box accounts, cash management arrangements and/or any other
accounts, agreements or arrangements for the collection of any of the
Collateral, and (viii) the reasonable fees and expenses of the advisor(s), if
any, retained by either Agent, including those retained in connection with the
chapter 11 or 7 cases of the Borrowers.
18.2. INDEMNIFICATION. (a) THE BORROWERS JOINTLY AND SEVERALLY AGREE TO
INDEMNIFY AND HOLD HARMLESS EACH OF THE AGENTS, ITS AFFILIATES AND THE BANKS AND
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS
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(INCLUDING THE AGENTS AND THEIR AFFILIATES WHEN EXERCISING DISCRETIONARY RIGHTS
GRANTED HEREUNDER) FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS AND SUITS
WHETHER GROUNDLESS OR OTHERWISE, AND FROM AND AGAINST ANY AND ALL LIABILITIES,
LOSSES, DAMAGES AND EXPENSES OF EVERY NATURE AND CHARACTER ARISING OUT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY INCLUDING, WITHOUT LIMITATION, (I) ANY ACTUAL OR PROPOSED
USE BY ANY OF THE BORROWERS OF THE PROCEEDS OF ANY OF THE LOANS OR LETTERS OF
CREDIT, (II) ANY OF THE BORROWERS ENTERING INTO OR PERFORMING THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, (III) WITH RESPECT TO ANY OF THE
BORROWERS AND THEIR RESPECTIVE PROPERTIES AND ASSETS, THE VIOLATION OF ANY
ENVIRONMENTAL LAW, THE PRESENCE, DISPOSAL, ESCAPE, SEEPAGE, LEAKAGE, SPILLAGE,
DISCHARGE, EMISSION, RELEASE OR THREATENED RELEASE OF ANY HAZARDOUS SUBSTANCES
OR ANY ACTION, SUIT, PROCEEDING OR INVESTIGATION BROUGHT OR THREATENED WITH
RESPECT TO ANY HAZARDOUS SUBSTANCES (INCLUDING, BUT NOT LIMITED TO, CLAIMS WITH
RESPECT TO WRONGFUL DEATH, PERSONAL INJURY OR DAMAGE TO PROPERTY), OR (IV)
EXCEPT TO THE EXTENT THAT ANY SUCH LIABILITY, LOSS, DAMAGE OR EXPENSE SHALL HAVE
BEEN FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN CAUSED
BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF EITHER AGENT OR A BANK, THE
ADMINISTRATIVE AGENT OR ANY BANK ENTERING INTO ANY AGENCY AGREEMENTS OR OTHER
ARRANGEMENTS WITH RESPECT TO ANY LOCKBOX ACCOUNTS MAINTAINED BY ANY OF THE
BORROWERS WITH ANY PERSON, INCLUDING ANY LIABILITY OF EITHER AGENT OR ANY BANK
ARISING UNDER ANY INDEMNIFICATION OBLIGATIONS INCURRED PURSUANT TO ANY OF THE
FOREGOING, IN EACH CASE INCLUDING, WITHOUT LIMITATION, THE REASONABLE
OUT-OF-POCKET FEES AND DISBURSEMENTS OF COUNSEL AND ALLOCATED COSTS OF INTERNAL
COUNSEL INCURRED IN CONNECTION WITH ANY SUCH INVESTIGATION, LITIGATION OR OTHER
PROCEEDING. IN LITIGATION, OR THE PREPARATION THEREFOR, THE BANKS AND THE AGENTS
AND THEIR AFFILIATES SHALL BE ENTITLED TO SELECT THEIR OWN COUNSEL AND, IN
ADDITION TO THE FOREGOING INDEMNITY, THE BORROWERS AGREE TO PAY PROMPTLY THE
REASONABLE FEES AND EXPENSES OF SUCH COUNSEL. IF AND TO THE EXTENT THAT THE
OBLIGATIONS OF THE BORROWERS UNDER THIS SS.18.2 ARE UNENFORCEABLE FOR ANY
REASON, THE BORROWERS HEREBY AGREE TO MAKE THE MAXIMUM CONTRIBUTION TO THE
PAYMENT IN SATISFACTION OF SUCH OBLIGATIONS WHICH IS PERMISSIBLE UNDER
APPLICABLE LAW.
(b) THE BORROWERS SHALL FURTHER JOINTLY AND SEVERALLY INDEMNIFY THE
AGENTS (AND THEIR AFFILIATES) AND THE BANKS AND HOLD THE AGENTS (AND THEIR
AFFILIATES) AND THE BANKS HARMLESS FROM AND AGAINST ANY LOSS, COST OR EXPENSE
INCURRED OR SUSTAINED BY SUCH AGENT (OR SUCH AFFILIATE) OR ANY BANKS IN
PROVIDING PAYROLL, CONCENTRATION ACCOUNT, LOCK BOX, COLLECTION, DISBURSEMENT AND
OTHER CASH MANAGEMENT SERVICES TO ANY OF THE BORROWERS OR THEIR SUBSIDIARIES.
18.3. SURVIVAL. The covenants contained in this ss.18 shall survive
payment or satisfaction in full oF all other Obligations and the termination of
the Commitments.
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19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of any of the Borrowers pursuant hereto shall
be deemed to have been relied upon by the Banks and the Agents, notwithstanding
any investigation heretofore or hereafter made by any of them, and shall survive
the making by the Banks of any of the Loans and the issuance, extension or
renewal of any Letters of Credit and shall continue in full force and effect so
long as any amount due under this Credit Agreement or the Notes or any of the
other Loan Documents remains outstanding or any Bank has any obligation to make
any Loans or the Issuing Bank has any obligation to issue, extend or renew any
Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All statements contained in any certificate,
document, instrument or other paper delivered by any of the Borrowers to any
Bank or either Agent pursuant to or in connection with this Credit Agreement or
any of the other Loan Documents shall constitute representations and warranties
by such Borrower hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it and the Notes held by it and its participating
interest in the risk related to any Letters of Credit); PROVIDED that (i) either
(a) such assignment is to another Bank or an affiliate of the assigning Bank or
(b) the Administrative Agent shall have given its prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (iii) each
assignment shall be in a minimum amount of $500,000 (or if less, the entire
Commitment of the assigning Bank), and (iv) the parties to such assignment shall
execute and deliver to the Administrative Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of EXHIBIT D hereto (an "ASSIGNMENT AND ACCEPTANCE"), together with any
Notes subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof (unless an earlier effective date is agreed to by the
Administrative Agent), (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Administrative Agent
of the registration fee referred to in ss.20.3, be released from its obligations
under this Credit Agreement.
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20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, and that it has made arrangements with
the assignee Bank satisfactory to such assignor with respect to its PRO
RATA share of Letter of Credit Fees with respect to outstanding Letters
of Credit, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of
any security interest or mortgage;
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrowers or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by
the Borrowers or any other Person primarily or secondarily liable in
respect of any of the Obligations or any of their obligations under
this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.9.4 and ss.10.4 and such other documeNtS
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, either Agent or any other Bank 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 Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
such Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
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(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
20.3. REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"REGISTER") for the recordation of the names and addresses of the Banks and the
Commitment Percentages, and principal amount of the Loans owing to, and Letter
of Credit Participations purchased by, the Banks from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Credit Agreement. The Register shall be available for inspection by the
Borrowers and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Administrative Agent a registration fee in the sum of $5,000.
20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (i) record the information
contained therein in the Register, and (ii) give prompt notice thereof to the
Borrowers and the Banks (other than the assigning Bank). Within five (5)
Business Days after receipt of such notice, the Borrowers, at its own expense,
shall execute and deliver to the Administrative Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Bank in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes. Within five (5) days of issuance of any new Notes pursuant to this
ss.20.4, the Borrowers shall deliver aN opinion of counsel, addressed to the
Banks and the Administrative Agent, relating to the due authorization, execution
and delivery of such new Notes and the legality, validity and binding effect
thereof, in form and substance satisfactory to the Banks. The surrendered Notes
shall be cancelled and returned to the Borrowers.
20.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (i) any such sale or participation shall not affect the rights and duties
of the selling Bank hereunder to the Borrowers and (ii) the only rights granted
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to the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitments of such Bank as it relates to such participant, reduce the
amount of any commitment fees or Letter of Credit Fees to which such participant
is entitled or extend any regularly scheduled payment date for principal or
interest.
20.6. DISCLOSURE. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; PROVIDED that such assignees or participants or potential assignees
or participants shall agree (i) to treat in confidence such information unless
such information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Bank is an Affiliate of the Borrowers, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Administrative Agent pursuant to ss.15.1
or ss.15.2, and the determination of the Required Banks shall for all purposes
of this CreDiT Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans or Reimbursement Obligations.
If any Bank sells a participating interest in any of the Loans to a participant,
and such participant is one of the Borrowers or an Affiliate of one of the
Borrowers, then such transferor Bank shall promptly notify the Administrative
Agent of the sale of such participation. A transferor Bank shall have no right
to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Administrative Agent pursuant to ss.15.1 or ss.15.2 to
the extEnT that such participation is beneficially owned by one of the Borrowers
or any Affiliate of one of the Borrowers, and the determination of the Required
Banks shall for all purposes of this Credit Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank in the
Loans or Reimbursement Obligations to the extent of such participation.
20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.18 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Administrative Agent certification as to its exemption
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from deduction or withholding of any United States federal income taxes.
Anything contained in this ss.20 to the contrary notwithstanding, any Bank may
at any time pledge all or any portion of its interest and rightS under this
Credit Agreement (including all or any portion of its Notes) to any (a) of the
twelve Federal Reserve Banks organized under ss.4 of the Federal Reserve Act, 12
U.S.C. ss.341 or (b) to a lender to such Bank (or a trusTeE therefor) in
connection with a bona fide financing transaction. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
20.9. ASSIGNMENT BY BORROWERS. None of the Borrowers shall assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20.10. ASSIGNMENT OF AGENCY ROLES. At any time the Administrative Agent
shall be permitted to assign the role of syndication agent to any financial
institution acceptable to the Administrative Agent in its discretion which
becomes a Bank hereunder (the "NEW SYNDICATION AGENT"), PROVIDED that unless a
Default or Event of Default shall have occurred and be continuing, the Borrowers
shall have given their prior written consent to such assignment, which consent
will not be unreasonably withheld. After any such assignment, the New
Syndication Agent shall be treated as the "Syndication Agent" for all purposes
hereunder. The assignor Syndication Agent shall retain its rights to receive
payment pursuant to ss.18 for expenses arising prior to the date of sucH
assignment, and to be indemnified pursuant to ss.ss.17.7 and 18 with respect to
any claims or actions arising prIoR to the date of such assignment.
21. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by facsimile and confirmed by delivery via courier or postal service, addressed
as follows:
(a) if to the Borrowers, at NationsRent, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇,
Executive Vice President, or at such other address for notice as the Borrowers
shall last have furnished in writing to the Person giving the notice;
(b) if to the Administrative Agent, at Fleet National Bank, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, Vice President, or
such other address for notice as the Administrative Agent shall last have
furnished in writing to the Person giving the notice;
(c) if to the Syndication Agent, at Fleet National Bank, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, Vice President, or
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such other address for notice as the Syndication Agent shall last have furnished
in writing to the Person giving the notice; and
(d) if to any Bank, at such Bank's address as set forth the Note
executed by the Borrowers and delivered to such Bank, or such other address for
notice as such Bank shall have last furnished in writing to the Person giving
the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
22. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE BANKRUPTCY COURT AND/OR THE COURTS OF THE STATE OF NEW YORK OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN SS.21. EACH OF THE BORROWERS
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
23. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
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25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.27.
26. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF WHICH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF THE BORROWERS HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE BORROWERS
(I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR EITHER
AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR SUCH AGENT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(II) ACKNOWLEDGES THAT THE AGENTS AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO
THIS CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement, any
consent or approval required or permitted by this Credit Agreement to be given
by the Banks may be given, and any term of this Credit Agreement or of any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers of any terms of this Credit Agreement
or such other instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrowers, the written consent of the Agents and the written consent of the
Required Banks and, if modifying any express representation, warranty, covenant
or condition precedent in favor of the Prepetition Lenders as such, by the
"Majority Lenders" under and as defined in the Prepetition Credit Agreement.
However, the consent of the "Majority Lenders" under and as defined in the
Prepetition Credit Agreement shall not be required for a waiver or modification
by which proceeds of dispositions of assets acquired by any of the Borrowers
after the commencement of the Cases are not
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applied to Prepetition Lender Debt. Notwithstanding the foregoing, the rate of
interest on the Notes (other than interest accruing pursuant to ss.7.5 following
the effective date of any waiver by the Required Banks of the Default or Event
oF Default relating thereto) or the amount of the commitment fee or Letter of
Credit Fees may not be decreased without the written consent of each Bank
affected thereby; the principal amount of the Loans may not be decreased without
the written consent of each Bank affected thereby, the amount of the Commitments
may not be increased without the written consent of the Borrowers and of each
Bank affected thereby (except as otherwise provided in ss.2.3(c)); the
Termination Date (except as provided in the definition of that term) may not be
postponed withouT the written consent of each Bank affected thereby; this ss.27
and the definition of Required Banks may not bE amended, without the written
consent of all of the Banks; and reference to the Fee Letter and ss.17 may not
bE amended without the written consent of each Agent affected thereby. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of either Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon any of
the Borrowers shall entitle any of the Borrowers to other or further notice or
demand in similar or other circumstances.
28. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as of the date first set forth above.
BORROWERS:
NATIONSRENT, INC.
NATIONSRENT USA, INC.
NATIONSRENT TRANSPORTATION
SERVICES, INC.
NR DELAWARE, INC.
NRGP, INC.
NATIONSRENT WEST, INC.
▇▇▇▇▇ EQUIPMENT CORP.
NR DEALER, INC.
NR FRANCHISE COMPANY
BDK EQUIPMENT COMPANY, INC., each
as a debtor and a debtor in
possession
By:
--------------------------------
Name:
Title:
NATIONSRENT OF TEXAS, LP
NATIONSRENT OF INDIANA, LP, each as
a debtor and a debtor in possession
By: NRGP, Inc., general partner
By:
--------------------------------
Name:
Title:
ADMINISTRATIVE AGENT, SYNDICATION
AGENT, SWING BANK, ISSUING BANK,
AND LENDER:
FLEET NATIONAL BANK
By:
--------------------------------
Name:
Title:
LEAD ARRANGER AND BOOK MANAGER:
joining in signing this Credit
Agreement for purposes of ss.6.1
FLEET SECURITIES, INC.
By:
--------------------------------
Name:
Title: