EXHIBIT 10.1
[EXECUTION]
LOAN AND SECURITY AGREEMENT
by and among
OMEGA WIRE, INC.
OWI CORPORATION
CAMDEN WIRE CO., INC.
IWG RESOURCES, LLC
INTERNATIONAL WIRE ROME OPERATIONS, INC.
WIRE TECHNOLOGIES, INC.
as Borrowers
and
INTERNATIONAL WIRE GROUP, INC.
as Guarantor
CONGRESS FINANCIAL CORPORATION (CENTRAL)
as Agent
and
THE LENDERS FROM TIME TO TIME PARTY HERETO
as Lenders
Dated: October 20, 2004
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.....................................................................................1
SECTION 2. CREDIT FACILITIES..............................................................................35
2.1 Loans..........................................................................................35
2.2 Letter of Credit Accommodations................................................................36
2.3 Commitments....................................................................................40
SECTION 3. INTEREST AND FEES..............................................................................40
3.1 Interest.......................................................................................40
3.2 Fees...........................................................................................42
3.3 Changes in Laws and Increased Costs of Loans...................................................42
SECTION 4. CONDITIONS PRECEDENT...........................................................................44
4.1 Conditions Precedent to Initial Loans and Letter of Credit Accommodations......................44
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations..........................48
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST......................................................48
5.1 Grant of Security Interest.....................................................................48
5.2 Perfection of Security Interests...............................................................50
SECTION 6. COLLECTION AND ADMINISTRATION..................................................................54
6.1 Borrowers' Loan Accounts.......................................................................54
6.2 Statements.....................................................................................55
6.3 Collection of Accounts.........................................................................55
6.4 Payments; Mandatory Prepayments; Reductions in Maximum Credit and Commitments..................56
6.5 Authorization to Make Loans....................................................................59
6.6 Use of Proceeds................................................................................60
6.7 Appointment of Administrative Borrower Representative as Agent for Requesting
Loans and Receipts of Loans and Statements.....................................................60
6.8 Pro Rata Treatment.............................................................................61
6.9 Sharing of Payments, Etc.......................................................................61
6.10 Settlement Procedures..........................................................................62
6.11 Taxes..........................................................................................64
6.12 Obligations Several; Independent Nature of Lenders' Rights.....................................67
(i)
SECTION 7. COLLATERAL REPORTING AND COVENANTS.............................................................67
7.1 Collateral Reporting...........................................................................67
7.2 Accounts Covenants.............................................................................68
7.3 Inventory Covenants............................................................................69
7.4 Equipment and Real Property Covenants..........................................................70
7.5 Power of Attorney..............................................................................71
7.6 Right to Cure..................................................................................72
7.7 Access to Premises.............................................................................72
SECTION 8. REPRESENTATIONS AND WARRANTIES.................................................................73
8.1 Corporate Existence, Power and Authority.......................................................73
8.2 Name; State of Organization; Chief Executive Office; Collateral Locations......................73
8.3 Financial Statements; No Material Adverse Effect...............................................74
8.4 Priority of Liens; Title to Properties.........................................................74
8.5 Tax Returns....................................................................................75
8.6 Litigation.....................................................................................75
8.7 Compliance with Other Agreements and Applicable Laws...........................................75
8.8 Environmental Compliance.......................................................................76
8.9 Employee Benefits..............................................................................76
8.10 Bank Accounts..................................................................................77
8.11 Intellectual Property..........................................................................77
8.12 Subsidiaries; Affiliates; Capitalization; Solvency.............................................78
8.13 Labor Disputes.................................................................................78
8.14 Restrictions on Subsidiaries...................................................................79
8.15 Material Contracts.............................................................................79
8.16 Intentionally Omitted..........................................................................79
8.17 Accuracy and Completeness of Information.......................................................79
8.18 Term Loan Documents............................................................................79
8.19 Survival of Warranties; Cumulative.............................................................79
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................80
9.1 Maintenance of Existence.......................................................................80
9.2 New Collateral Locations.......................................................................80
9.3 Compliance with Laws, Regulations, Etc.........................................................81
9.4 Payment of Taxes and Claims....................................................................82
9.5 Insurance......................................................................................82
9.6 Financial Statements and Other Information.....................................................83
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................85
9.8 Encumbrances...................................................................................89
9.9 Indebtedness...................................................................................91
9.10 Loans, Investments, Etc........................................................................94
(ii)
9.11 Dividends and Redemptions......................................................................98
9.12 Transactions with Affiliates...................................................................99
9.13 Compliance with ERISA..........................................................................99
9.14 End of Fiscal Years; Fiscal Quarters..........................................................100
9.15 Change in Business............................................................................100
9.16 Limitation of Restrictions Affecting Subsidiaries.............................................100
9.17 Fixed Charge Coverage Ratio...................................................................101
9.18 Lender Meetings...............................................................................101
9.19 License Agreements............................................................................101
9.20 After Acquired Real Property..................................................................102
9.21 Costs and Expenses............................................................................102
9.22 Further Assurances............................................................................103
SECTION 10. EVENTS OF DEFAULT AND REMEDIES................................................................103
10.1 Events of Default.............................................................................103
10.2 Remedies......................................................................................106
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW.................................109
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.........................109
11.2 Waiver of Notices.............................................................................111
11.3 Amendments and Waivers........................................................................111
11.4 Waiver of Counterclaims.......................................................................113
11.5 Indemnification...............................................................................113
SECTION 12. THE AGENT.....................................................................................113
12.1 Appointment, Powers and Immunities............................................................113
12.2 Reliance by Agent.............................................................................114
12.3 Events of Default.............................................................................114
12.4 Congress in its Individual Capacity...........................................................115
12.5 Indemnification...............................................................................115
12.6 Non-Reliance on Agent and Other Lenders.......................................................115
12.7 Failure to Act................................................................................116
12.8 Additional Loans..............................................................................116
12.9 Concerning the Collateral and the Related Financing Agreements................................117
12.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders.................117
12.11 Collateral Matters............................................................................117
12.12 Agency for Perfection.........................................................................119
12.13 Successor Agent...............................................................................119
(iii)
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS..............................................................120
13.1 Term..........................................................................................120
13.2 Interpretative Provisions.....................................................................122
13.3 Notices.......................................................................................124
13.4 Partial Invalidity............................................................................124
13.5 Confidentiality...............................................................................124
13.6 Successors....................................................................................125
13.7 Assignments; Participations...................................................................126
13.8 Entire Agreement..............................................................................128
13.9 USA Patriot Act...............................................................................128
13.10 Counterparts, Etc.............................................................................128
(iv)
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment and Acceptance
Exhibit B Information Certificate
Exhibit C Form of Compliance Certificate
Exhibit D Form of Deposit Account Control Agreement
Exhibit E Form of Investment Property Control Agreement
Exhibit F Form of Borrowing Base Certificate
Exhibit 6.11(d) Form of Certificate of Withholding Tax Exemption
Schedule 1.38 Facilities to be Closed
Schedule 1.57 Existing Lenders
Schedule 1.58 Existing Letters of Credit
Schedule 1.79 Subsidiaries Operating Insulated Wire Division
Schedule 1.95 Mortgages and Mortgaged Real Property
Schedule 1.119 Permitted Holders
Schedule 1.131 Subsidiaries Operating Reel Sale Division
Schedule 9.17 Fixed Charge Coverage Ratio
-i-
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated October 20, 2004 is entered into
by and among OMEGA WIRE, INC., a Delaware corporation ("Omega"), CAMDEN WIRE
CO., INC., a New York corporation ("Camden"), IWG RESOURCES, LLC, a Nevada
limited liability company ("Resources"), INTERNATIONAL WIRE ROME OPERATIONS,
INC., a Delaware corporation ("Rome"), OWI CORPORATION, a New York corporation
("OWI"), and WIRE TECHNOLOGIES, INC., an Indiana corporation ("Wire
Technologies", and together with Omega, Camden, Resources, Rome and OWI, each
individually a "Borrower" and collectively, "Borrowers"), INTERNATIONAL WIRE
GROUP, INC., a Delaware corporation ("Parent", as hereinafter further defined,
and sometimes hereinafter referred to as "Guarantor"), the parties hereto from
time to time as lenders, whether by execution of this Agreement or an Assignment
and Acceptance (each individually, a "Lender" and collectively, "Lenders") and
Congress Financial Corporation (Central) , an Illinois corporation, in its
capacity as agent for Lenders (in such capacity, "Agent").
W I T N E S S E T H:
WHEREAS, Borrowers and Parent have requested that Agent and Lenders
enter into financing arrangements with Borrowers pursuant to which Lenders may
make loans and provide other financial accommodations to Borrowers; and
WHEREAS, each Lender is willing to agree (severally and not jointly) to
make such loans and provide such financial accommodations to Borrowers on a pro
rata basis according to its Commitment (as defined below) on the terms and
conditions set forth herein and Agent is willing to act as agent for Lenders on
the terms and conditions set forth herein and the other Financing Agreements;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean, as to each Borrower and Guarantor, all
present and future rights of such Borrower and Guarantor to payment of a
monetary obligation, whether or not earned by performance, which is not
evidenced by chattel paper or an instrument, (a) for property that has been or
is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for
services rendered or to be rendered, (c) for a secondary obligation incurred or
to be incurred, or (d) arising out of the use of a credit or charge card or
information contained on or for use with the card.
1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the next one-thousandth (1/1000) of one (1%) percent)
determined by dividing (a) the Eurodollar Rate for such Interest Period by (b)a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes
hereof, "Reserve Percentage" shall mean the reserve percentage, expressed as a
decimal, prescribed by any United States or foreign banking authority for
determining the reserve requirement which is or would be applicable to deposits
of United States dollars in a non-United States or an international banking
office of Reference Bank used to fund a Eurodollar Rate Loan or any Eurodollar
Rate Loan made with the proceeds of such deposit, whether or not the Reference
Bank actually holds or has made any such deposits or loans. The Adjusted
Eurodollar Rate shall be adjusted on and as of the effective day of any change
in the Reserve Percentage.
1.3 "Administrative Borrower Representative" shall mean Parent, in
its capacity as Administrative Borrower Representative on behalf of the
Borrowers pursuant to Section 6.7 hereof and it successors and assigns in such
capacity.
1.4 "Affiliate" shall mean, with respect to a specified Person,
any other Person which directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with
such Person, and without limiting the generality of the foregoing, includes (a)
any Person which beneficially owns or holds ten (10%) percent or more of any
class of Voting Stock of such Person or other equity interests in such Person,
(b) any Person of which such Person beneficially owns or holds ten (10%) percent
or more of any class of Voting Stock and (c) any director or executive officer
of such Person. For the purposes of this definition, the term "control"
(including with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise.
1.5 "Agent" shall mean Congress, in its capacity as agent on
behalf of Lenders pursuant to the terms hereof and any replacement or successor
agent hereunder.
1.6 "Agent Payment Account" shall mean account no. 5000000030266
of Agent at Wachovia Bank, National Association, or such other account of Agent
as Agent may from time to time designate to Administrative Borrower
Representative as the Agent Payment Account for purposes of this Agreement and
the other Financing Agreements.
1.7 "Applicable Margin" shall mean, as to the Interest Rate for
Prime Rate Loans and the Interest Rate for Eurodollar Rate Loans, for the period
from the date hereof through and including the date that is six (6) months after
the Closing Date, no less than, (i) in the case of Prime Rate Loans based on
Current Asset Availability, .50%, (ii) in the case of Eurodollar Rate Loans
based on Current Asset Availability, 2.25%, (iii) in the case of Prime Rate
Loans based on Fixed Asset Availability and/or Supplemental Availability, .75%,
(iv) in the case of Eurodollar Rate Loans based on Fixed Asset Availability
and/or Supplemental Availability, 2.50%; and (v) 1.75% for Letter of Credit
Accommodations; provided, however, that commencing on May 1,
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2005 and on the first day of each month thereafter, the Applicable Margin shall
be the applicable percentage (on a per annum basis) set forth below opposite the
Monthly Average Excess Availability and determined based upon whether the
Monthly Average Excess Availability for the immediately preceding month is at or
within the amounts indicated for such percentage, except that, the Applicable
Margin for Prime Rate Loans and for Eurodollar Rate Loans based on Supplemental
Availability shall be equal to the applicable percentage (on a per annum basis)
set forth opposite Tier II for Loans based on Fixed Asset Availability:
Loans based on
Loans Based on Fixed Asset Letter of
Current Asset Availability Availability Credit Accommodations
-------------- --------------------- ----------------------------- ------------------------- ------------------------
Tier No. When Monthly Average
Excess Availability Prime Eurodollar Prime Eurodollar
Is: Rate Loan Rate Loans Rate Loan Rate Loans
-------------- --------------------- ------------ ------------ ---------- ----------- ----------------------
Tier I Greater than .25% 2.00% .50% 2.25% 1.50%
$25,000,000
Tier II $12,500,000 to .50% 2.25% .75% 2.50% 1.75%
$25,000,000
Tier III Less than $12,500,000 .75% 2.50% 1.00% 2.75% 2.00%
provided, that, the Applicable Margin shall be calculated and established each
month and shall remain in effect until adjusted (if at all) thereafter on the
first day of a subsequent month.
1.8 "Applicable Percentage of Pro Forma Cost Savings" means, with
respect to a specified Permitted Acquisition, (a) for the calculation of
projected EBITDA for the purposes of Section 9.10(n)(v) or the calculation of
EBITDA for the period ended prior to the end of the first full quarter after the
consummation of such Permitted Acquisition, 100% of the Pro Forma Cost Savings
therefor, (b) for the calculation of EBITDA for the period ended on the end of
the first full quarter after the consummation of such Permitted Acquisition,
such Pro Forma Cost Savings set forth in the Cost Savings Budget for the second,
third and fourth quarters after the consummation of such Permitted Acquisition,
(c) for the calculation of EBITDA for the period ended on the end of the second
full quarter after the consummation of such Permitted Acquisition, such Pro
Forma Cost Savings set forth in the Cost Savings Budget for the third and fourth
quarters after the consummation of such Permitted Acquisition, (d) for the
calculation of EBITDA for the period ended on the end of the third full quarter
after consummation of the Permitted Acquisition, such Pro Forma Cost Savings set
forth in the Cost Savings Budget for the fourth quarter after the consummation
of such Permitted Acquisition, and (e) for the calculation of EBITDA for any
period ended on or after the end of the fourth full quarter after the
consummation of the Permitted Acquisition, 0% of such Pro Forma Cost Savings.
1.9 "Asset Sale" shall mean any transaction, or series of related
transactions, pursuant to which any Borrower, Guarantor or any of its
Subsidiaries sells, assigns, transfers, conveys, leases or subleases, licenses
or otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person.
3
1.10 "Assignment and Acceptance" shall mean an Assignment and
Acceptance substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender's interest hereunder in accordance with the provisions of Section 13.7
hereof.
1.11 "Average Thirty Day Excess Availability" shall mean, as of any
date of determination, the average Excess Availability for the thirty (30) day
period ending on such date; provided that with respect to any Permitted
Acquisition, "Average Thirty Day Excess Availability" shall be computed on a pro
forma basis as if the relevant Permitted Acquisition had occurred on the first
day of such thirty (30) day period and shall include the unrestricted cash and
Cash Equivalents of the relevant Target.
1.12 "Bankruptcy Code" shall mean the United States Bankruptcy
Code, being Title 11 of the United States Code, as the same now exists or may
from time to time hereafter be amended, modified, recodified or supplemented,
together with all official rules and regulations thereunder or related thereto.
1.13 "Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of New York.
1.14 "Blocked Accounts" shall have the meaning set forth in Section
6.3 hereof.
1.15 "Borrowing Base" shall mean, at any time, the amount equal to:
(a) the lesser of:
(i) the amount equal to:
(A) 85% multiplied by the Net Amount of
Eligible Accounts of the Borrowers; plus
(B) the lesser of (1) 80% multiplied by
the Value of Eligible Inventory consisting of finished goods and consigned
finished goods of the Reel Sale Division owned by Borrowers or (2) up to 85% of
the Net Recovery Percentage of such category of Eligible Inventory multiplied by
the Value thereof; plus
(C) the lesser of (1) 75% multiplied by
the Value of Eligible Inventory consisting of raw materials of the Reel Sale
Division owned by Borrowers or (2) up to 85% of the Net Recovery Percentage of
such category of Eligible Inventory multiplied by the Value thereof; plus
(D) the lesser of (1) 70% multiplied by
the Value of Eligible Inventory consisting of raw materials and finished goods
Inventory of the Insulated Wire Division owned by Borrowers or (2) up to 85% of
the Net Recovery Percentage of such category of Eligible Inventory multiplied by
the Value thereof; plus
4
(E) the lesser of (1) 50% multiplied by
the Value of Eligible Inventory consisting of work-in-process Inventory of the
Borrowers or (2) up to 85% of the Net Recovery Percentage of such category of
Eligible Inventory multiplied by the Value thereof (the sum of (i)(A), (i)(B),
(i)(C), (i)(D) above and this (i)(E) is collectively referred to as the "Current
Asset Availability"); plus
(F) the Supplemental Availability (as
defined below in this definition); plus
(G) the Fixed Asset Availability (as
defined below in this definition); or
(ii) the Revolving Loan Limit,
minus
(b) Reserves.
The amounts of Eligible Inventory of any Borrower shall, at Agent's option, be
determined based on the lesser of the amount of Inventory set forth in the
general ledger of such Borrower or the perpetual inventory record maintained by
such Borrower.
For the purposes of this definition, the following terms shall have the
respective meanings set forth below:
(1) "Supplemental Availability" shall mean $4,600,000 as of the
date of closing, which amount will amortize in thirty-six (36) consecutive equal
monthly reductions of $127,777.77 commencing on December 1, 2004 and on the
first day of each of the next thirty-five (35) months thereafter and shall be -
0 - from and after September 30, 2007; provided, however, that if the Reel Sale
Division is sold and transferred (subject to the terms of this Agreement), then
Supplemental Availability shall also be reduced by an amount equal to the lesser
of (i) the then current Supplemental Availability and (ii) the amount of Net
Cash Proceeds arising from such Asset Sale and such reduction shall in no event
limit or affect the scheduled monthly amortization of the Supplemental
Availability otherwise provided for herein;
(2) "Fixed Asset Availability" shall mean the sum of (x) with
respect to Eligible Real Property owned by Borrowers, as of the Closing Date,
$11,289,000 ("Closing Date Real Property Availability"), which Closing Date Real
Property Availability will amortize on a monthly basis by an amount equal to
$134,393, commencing on December 1, 2004 and on the first day of each month
thereafter, (y) with respect to Eligible Equipment owned by Borrowers as of the
Closing Date, $19,591,000 ("Closing Date Equipment Availability"), which Closing
Date Equipment Availability will amortize on a monthly basis by an amount equal
to $272,097, commencing on December 1, 2004 and on the first day of each month
thereafter, and (z) with respect to Eligible Real Property acquired by Borrowers
after the Closing Date ("Eligible New
5
Real Property") and/or Eligible Equipment acquired by Borrowers after the
Closing Date ("Eligible New Equipment", and together with "Eligible New Real
Property", collectively, "Eligible New Fixed Assets"), the sum of (I) 60% of the
fair market value of such Eligible New Real Property, as determined by written
appraisals thereof, prepared by appraisers, and in form and substance,
reasonably satisfactory to Agent, and (II) the lesser of (A) 85% multiplied by
the Net Liquidation Value of such Eligible New Equipment, as determined by
written appraisals thereof, prepared by appraisers, and in form and substance,
reasonably satisfactory to Agent, or (B) 75% multiplied by the Hard Cost (as
defined below in this definition of Borrowing Base) of such Eligible New
Equipment; provided, that, (a) no Eligible New Fixed Assets shall be included
for purposes of calculating Fixed Asset Availability until from and after the
first anniversary of this Agreement, (b) Fixed Asset Availability shall be
available solely with respect to Eligible New Fixed Assets that have not
previously been included in the Borrowing Base and shall in no event exceed (i)
$5,500,000 as of the first anniversary of this Agreement and $5,500,000 for each
twelve (12) - month period following the date of this Agreement, or (ii)
$2,750,000 for any six (6) month period following the first anniversary of this
Agreement, (c) without in any manner limiting the generality of the criteria for
Eligible Equipment and Eligible Real Property, Agent shall have received written
appraisals, in accordance with Section 7.4, with respect to any Equipment and
Real Property that was not previously included in the Borrowing Base as Eligible
Fixed Assets, (d) Fixed Asset Availability established by Agent with respect to
Eligible New Equipment will amortize on a monthly basis, on the basis of a
seventy-two (72) month amortization, commencing on the first day of the first
full month following the date on which such Fixed Asset Availability is first
calculated by Agent with respect to such Eligible New Equipment and continuing
on the first day of each month thereafter, and Fixed Asset Availability
established by Agent with respect to Eligible New Real Property will also
amortize on a monthly basis, but on the basis of an eighty-four (84) month
amortization, commencing on the first day of the first full month following the
date on which such Fixed Asset Availability is first calculated by Agent with
respect to such Eligible Real Property and continuing on the first day of each
month thereafter, and (d) Fixed Asset Availability shall additionally be subject
to reduction upon Agent's receipt of Net Cash Proceeds of Asset Sales to the
extent such Net Cash Proceeds arise from Eligible Fixed Assets that were
included within the Borrowing Base at the time of the occurrence of the Asset
Sale or other event that gave rise to such Net Cash Proceeds; and
(3) "Hard Cost" shall mean, with respect to the purchase by
Borrowers of an item of Eligible Equipment, the net cash amount actually paid to
acquire title to such item, net of all incentives, discounts and rebates, and
exclusive of freight, delivery charges, installation costs and charges, trade-in
allowances, software costs, charges and fees, warranty costs, taxes, insurance
and other incidental costs or expenses and all indirect costs or expenses of any
kind.
1.16 "Business Day" shall mean any day other than a Saturday,
Sunday, or other day on which commercial banks are authorized or required to
close under the laws of the State of New York, the State of Illinois or the
State of North Carolina, and a day on which Agent is open for the transaction of
business, except that if a determination of a Business Day shall relate to any
Eurodollar Rate Loans, the term Business Day shall also exclude any day on which
banks are closed for dealings in dollar deposits in the London interbank market
or other applicable Eurodollar Rate market.
1.17 "Camden" shall mean Camden Wire Co., Inc., a New York
corporation, and its successors and assigns permitted hereunder.
6
1.18 "Capital Leases" shall mean, as applied to any Person, any
lease of (or any agreement conveying the right to use) any property (whether
real, personal or mixed) by such Person as lessee which in accordance with GAAP,
is required to be reflected as a capital lease on the balance sheet of such
Person.
1.19 "Capital Stock" shall mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated) of such Person's capital stock or partnership, limited liability
company or other equity interests at any time outstanding, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock or other interests (but excluding any debt security that is exchangeable
for or convertible into such capital stock).
1.20 "Cash Equivalents" shall mean, at any time, (a) any evidence
of Indebtedness with a maturity date of ninety (90) days or less issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof; provided, that, the full faith and credit of
the United States of America is pledged in support thereof; (b) certificates of
deposit, time deposits, eurodollar deposits or overnight deposits or bankers'
acceptances with a maturity of ninety (90) days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (c)
commercial paper (including variable rate demand notes) with a maturity of
ninety (90) days or less of an issuer (except an Affiliate of any Borrower or
Guarantor) organized under the laws of any State of the United States of America
or the District of Columbia and rated at least A by Standard & Poor's Ratings
Service, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P") or at least P by
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (d) repurchase obligations with a
term of not more than thirty (30) days for underlying securities of the types
described in clause (a) above entered into with any financial institution having
combined capital and surplus and undivided profits of not less than
$500,000,000; (e) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States of America or issued by any governmental agency thereof and
backed by the full faith and credit of the United States of America, in each
case maturing within ninety (90) days or less from the date of acquisition;
provided, that, the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository Institutions with
Securities Dealers and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (f) investments in money market funds and mutual funds
which invest substantially all of their assets in securities of the types
described in clauses (a) through (e) above.
1.21 "Change of Control" shall mean (a) the transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of Parent to any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act), other than as permitted in Section 9.7 hereof;
(b) the acquisition by any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act), (other than any Permitted Holder(s)), in excess
of fifty (50%) percent of beneficial ownership, directly or indirectly, of the
voting power of the total outstanding Voting Stock of Parent; (c) during any
period of two (2) consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of Parent (together with any new
7
directors who have been appointed by any Permitted Holder, or whose nomination
for election by the stockholders of such Borrower or Guarantor, as the case may
be, was approved by a vote of at least a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of any Borrower or
Guarantor then still in office; or (d) the failure of Parent to own directly or
indirectly one hundred (100%) percent of the voting power of the total
outstanding Voting Stock of any other Borrower or Guarantor, other than as
permitted in this Agreement.
1.22 "Chapter 11 Case" shall mean, collectively, the Chapter 11
Cases of the Borrowers and Guarantors, each as debtor and debtor-in-possession,
under the Bankruptcy Code, referred to as In re International Wire Group, Inc.,
et al., Chapter 11 Case No. 04-11991 (BRL) (Jointly Administered), which are
pending in the Bankruptcy Court.
1.23 "Chapter 11 Plan" shall mean the Debtors' Second Amended and
Restated Joint Plan under Chapter 11 of the Bankruptcy Code, dated June 24,
2004, as modified by that certain Modification to Debtors' Second Amended and
Restated Joint Plan Under Chapter 11 of the Bankruptcy Code, dated August 13,
2004, as confirmed by order of the Bankruptcy Court dated August 25, 2004.
1.24 "Code" shall mean the Internal Revenue Code of 1986, as the
same now exists or may from time to time hereafter be amended, modified,
recodified or supplemented, together with all regulations thereunder or
related thereto.
1.25 "Collateral" shall have the meaning set forth in Section 5.1
hereof.
1.26 "Collateral Access Agreement" shall mean an agreement in
writing, in form and substance reasonably satisfactory to Agent, from any lessor
of premises to any Borrower or Guarantor, or any other person to whom any
Collateral is consigned or who has custody, control or possession of any such
Collateral or is otherwise the owner or operator of any premises on which any of
such Collateral is located, in favor of Agent with respect to the Collateral at
such premises or otherwise in the custody, control or possession of such lessor,
consignee or other person.
1.27 "Commitment" shall mean, at any time, as to each Lender, the
principal amount set forth below such Lender's signature on the signatures pages
hereto designated as the Commitment or on Schedule 1 to the Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 13.7 hereof, as the same may be
adjusted from time to time in accordance with the terms hereof; sometimes being
collectively referred to herein as "Commitments".
1.28 "Congress" shall mean Congress Financial Corporation
(Central), an Illinois corporation, in its individual capacity, and its
successors and assigns.
1.29 "Consolidated Net Income" shall mean, with respect to any
Person for any period, the aggregate of the net income (loss) of such Person and
its Subsidiaries, on a consolidated
8
basis, for such period, all as determined in accordance with GAAP; provided,
that, (a) the net income of any Person that is not a wholly-owned Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid or payable to
such Person or a wholly-owned Subsidiary of such Person; (b)except to the extent
included pursuant to the foregoing clause, the net income of any Person accrued
prior to the date it becomes a wholly-owned Subsidiary of such Person or is
merged into or consolidated with such Person or any of its wholly-owned
Subsidiaries or that Person's assets are acquired by such Person or by any of
its wholly-owned Subsidiaries shall be included on a pro forma basis for such
period; and (c) the effect of any change in accounting principles adopted by
such Person or its Subsidiaries after the date hereof shall be excluded.
1.30 "Control Notice" shall mean a written notice delivered
pursuant to a Deposit Account Control Agreement instructing the depository bank
to comply with instructions originated by Agent with respect to the deposit
account that is covered thereby without further consent of any Borrower or
Guarantor.
1.31 "Cost Savings Budget" shall have the meaning set forth in the
definition of Pro Forma Cost Savings.
1.32 "Credit Facility" shall mean the Loans and Letter of Credit
Accommodations provided to or for the benefit of any Borrower pursuant to
Sections 2.1 and 2.2 hereof.
1.33 "Current Asset Availability" shall have the meaning set forth
in the definition of Borrowing Base.
1.34 "Debt Issuance" shall mean any issuance or sale by any Person
of any debt securities or other Indebtedness of the type specified in clause (a)
of the definition of such term; provided, that, in the case of a Borrower or
Guarantor, Debt Issuance shall not include any Indebtedness permitted under
Section 9.9 hereof, other than Indebtedness incurred pursuant to Section 9.9(e).
1.35 "Default" shall mean an act, condition or event which with
notice or passage of time or both would constitute an Event of Default.
1.36 "Defaulting Lender" shall have the meaning set forth in
Section 6.10 hereof.
1.37 "Deposit Account Control Agreement" shall mean an agreement in
writing, substantially in form of Exhibit D or such other agreement in form and
substance reasonably satisfactory to Agent, by and among Agent, the Borrower or
Guarantor with a deposit account at any bank and the bank at which such deposit
account is at any time maintained, which provides, among other things, that such
bank will comply with instructions originated by Agent after delivery of a
Control Notice.
1.38 "EBITDA" means, with respect to Parent and its Subsidiaries
for any period, Consolidated Net Income of Parent and its Subsidiaries for such
period plus (a) without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net
9
Income for such period, the sum of (i) total income and franchise tax expense,
(ii) interest expense (including losses with respect to interest rate Hedging
Agreements), amortization or writeoff of debt discount and debt issuance costs
and commissions and discounts and other fees and charges associated with
Indebtedness, (iii) depreciation and amortization expense, (iv) amortization or
impairment of intangibles (including, but not limited to, goodwill), (v) other
noncash charges (including, but not limited to, currency losses), (vi) any
extraordinary losses in accordance with GAAP, losses from any discontinued
operations relating to the Hose Claims in aggregate amount not to exceed on a
cumulative basis $1,000,000 for Parent's and its Subsidiaries' 2004 fiscal year
and all subsequent fiscal years, noncash losses from discontinued operations
related to the sales of assets, and unusual noncash losses (including any such
losses on sales or impairment of assets other than inventory sold in the
ordinary course of business), (vii) costs and charges accrued during such period
related to the closing of operations at locations described on Schedule 1.38,
not to exceed on a cumulative aggregate basis $4,500,000 for Parent's and its
Subsidiaries' 2004 fiscal year and all subsequent fiscal years, or related to
the relocation of equipment among plants, not to exceed on a cumulative
aggregate basis $400,000 for Parent's and its Subsidiaries' 2004 fiscal year and
all subsequent fiscal years, and (viii) any non-operational costs and charges
accrued during such period related to the restructuring contemplated by the
Chapter 11 Cases (such costs and charges to consist primarily of, but not be
limited to, KERP payments, severance payments for ▇▇▇▇▇▇ Partners employees,
professional fees, printing fees and financing fees) in an aggregate amount not
to exceed $17,800,000 for Parent's and its Subsidiaries' 2004 fiscal year, plus
(b) the Applicable Percentage of Pro Forma Cost Savings, minus (c) without
duplication, (i) any extraordinary and unusual gains (including gains on the
sales of assets, other than inventory sold in the ordinary course of business),
(ii) noncash gains (including currency gains) and (iii) interest income
(including gains with respect to interest rate Hedging Agreements) included in
Consolidated Net Income.
1.39 "Effective Date" shall mean the date on which (a) the
Confirmation Order shall have become a Final Order and (b) all of the conditions
precedent to the effectiveness of the Plan shall have been satisfied.
1.40 "Eligible Accounts" shall mean Accounts created by a Borrower
which are and continue to be acceptable to Agent based on the criteria set forth
below. Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide
sale and delivery of goods by such Borrower or rendition of services by such
Borrower in the ordinary course of its business which transactions are completed
in accordance with the terms and provisions contained in any documents related
thereto;
(b) such Accounts are not unpaid more than one hundred
twenty (120) days after the date of the original invoice for them or more than
sixty (60) days after the original due date for them;
(c) such Accounts comply with the terms and conditions
contained in Section 7.2(b) of this Agreement;
10
(d) such Accounts do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the account debtor may be conditional or contingent, other than
Accounts arising from sales on consignment if Agent shall have received (i) a
copy of a consignment agreement executed between Borrowers, as consignor, and
the consignee of the Inventory the sale of which gave rise to such Accounts,
(ii) a Collateral Access Agreement executed by such consignee, in form and
substance reasonably satisfactory to Agent and (iii) evidence reasonably
satisfactory to Agent that Borrowers have filed a valid and effective UCC
consignment financing statement, as secured party, against such consignee, as
debtor, in form and substance reasonably satisfactory to Agent, which
consignment financing statement shall have been assigned of record to Agent;
(e) (i) the chief executive office of the account debtor
with respect to such Accounts is located in the United States of America or
Canada (provided, that, at any time promptly upon Agent's reasonable request,
such Borrower shall execute and deliver, or cause to be executed and delivered,
such other agreements, documents and instruments as may be required by Agent to
perfect the security interests of Agent in those Accounts of an account debtor
with its chief executive office or principal place of business in Canada in
accordance with the applicable laws of the Province of Canada in which such
chief executive office or principal place of business is located and take or
cause to be taken such other and further actions as Agent may reasonably request
to enable Agent as secured party with respect thereto to collect such Accounts
under the applicable Federal or Provincial laws of Canada) or (ii) the account
debtor with respect to such Accounts is not located in the United States of
America or Canada, but such account debtor is a wholly-owned subsidiary of a
Person that is incorporated or formed pursuant to the laws of any State within
the United States of America and has its chief executive office in the United
States of America, or (iii) at Agent's option, if the chief executive office and
principal place of business of the account debtor with respect to such Accounts
is located other than in the United States of America or Canada, then if either:
(A) the account debtor has delivered to such Borrower an irrevocable letter of
credit issued or confirmed by a bank satisfactory to Agent and payable only in
the United States of America and in U.S. dollars, sufficient to cover such
Account, in form and substance satisfactory to Agent and if required by Agent,
the original of such letter of credit has been delivered to Agent or Agent's
agent and the issuer thereof, and such Borrower has complied with the terms of
Section 5.2(f) hereof with respect to the assignment of the proceeds of such
letter of credit to Agent or naming Agent as transferee beneficiary thereunder,
as Agent may specify, or (B) such Account is subject to credit insurance payable
to Agent issued by an insurer and on terms and in an amount acceptable to Agent,
or (C) such Account is otherwise acceptable in all respects to Agent (subject to
such lending formula with respect thereto as Agent may in good faith determine);
(f) such Accounts do not consist of progress ▇▇▇▇▇▇▇▇
(such that the obligation of the account debtors with respect to such Accounts
is conditioned upon such Borrower's satisfactory completion of any further
performance under the agreement giving rise thereto), ▇▇▇▇ and hold invoices or
retainage invoices, except as to ▇▇▇▇ and hold invoices, if Agent shall have
received an agreement in writing from the account debtor, in form and substance
satisfactory to Agent, confirming the unconditional obligation of the account
debtor to take the goods related thereto and pay such invoice;
11
(g) the account debtor with respect to such Accounts has
not asserted a counterclaim, defense or dispute and is not owed or does not
claim to be owed any amounts that may give rise to any right of setoff or
recoupment against such Accounts (but the portion of the Accounts of such
account debtor in excess of the amount at any time and from time to time owed by
such Borrower to such account debtor or claimed owed by such account debtor may
be deemed Eligible Accounts);
(h) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Accounts or reduce
the amount payable or delay payment thereunder, other than deductions described
in Section 7.2(b);
(i) such Accounts are subject to the first priority,
valid and perfected security interest of Agent and any goods giving rise thereto
are not, and were not at the time of the sale thereof, subject to any liens
except those permitted in this Agreement that are subject to an intercreditor
agreement in form and substance satisfactory to Agent between the holder of such
security interest or lien and Agent;
(j) neither the account debtor nor any officer or
employee of the account debtor with respect to such Accounts is an officer,
employee, agent or other Affiliate of any Borrower or Guarantor, except that
Accounts owing by (i) Viasystems and (ii) account debtors that are Affiliates of
Borrowers (as a result of the Voting Stock of such account debtors being owned
by GSCP (NJ), Inc., Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ Capital Partners,
▇▇▇▇▇▇▇ Capital Management and their respective Affiliates and other Affiliates
acceptable to Agent in its sole discretion), shall not be deemed ineligible
pursuant to this clause (j) so long as no more than 35% of the Voting Stock or
other equity interests of such account debtor are owned, directly or indirectly,
by any such Affiliates of Borrowers;
(k) the account debtors with respect to such Accounts are
not any foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Agent's
request, the Federal Assignment of Claims Act of 1940, as amended or any similar
State or local law, if applicable, has been complied with in a manner reasonably
satisfactory to Agent;
(l) there are no proceedings or actions which are
threatened in writing or pending against the account debtors with respect to
such Accounts which might result in any material adverse effect with respect to
such account debtor (including, without limitation, any bankruptcy, dissolution,
liquidation, reorganization or similar proceeding);
(m) the aggregate amount of such Accounts owing by a
single account debtor (other than Viasystems, Yazaki and its Affiliates and
General Cable) do not constitute more than ten (10%) percent of the aggregate
amount of all otherwise Eligible Accounts and such Accounts owing by each of
Viasystem, Yazaki and its Affiliates and General Cable do not, in each case,
constitute more than fifteen (15%) percent of the aggregate amount of all
otherwise Eligible Accounts (but the portion of the Accounts not in excess of
the foregoing applicable percentages may be deemed Eligible Accounts);
12
(n) such Accounts are not owed by an account debtor who
has Accounts unpaid more than one hundred twenty (120) days after the date of
the original invoice for them or more than sixty (60) days after the original
due date for them, and which constitute more than fifty (50%) percent of the
total Accounts of such account debtor;
(o) the account debtor is not located in a state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit such Borrower to seek judicial enforcement in such State of
payment of such Account, unless such Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year or such failure to file and inability to seek
judicial enforcement is capable of being remedied without any material delay or
material cost;
(p) such Accounts are owed by account debtors whose total
indebtedness to such Borrower does not exceed the credit limit with respect to
such account debtors as determined by such Borrower from time to time, to the
extent such credit limit as to any account debtor is established consistent with
the current practices of such Borrower as of the date hereof and such credit
limit is reasonably acceptable to Agent (but the portion of the Accounts not in
excess of such credit limit may be deemed Eligible Accounts);
(q) such Accounts are owed by account debtors deemed
creditworthy at all times by Agent in good faith; and
(r) such Accounts do not constitute Reel ▇▇▇▇▇▇▇▇ on
Borrowers' books and records.
The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in good
faith, in accordance with Agent's customary practices, based on either: (i) an
event, condition or other circumstance arising after the date hereof, or (ii) an
event, condition or other circumstance existing on the date hereof to the extent
Agent has no written notice thereof from a Borrower prior to the date hereof, in
either case under clause (i) or (ii) which adversely affects or could reasonably
be expected to adversely affect the Accounts in the good faith determination of
Agent. Any Accounts that are not Eligible Accounts shall nevertheless be part of
the Collateral.
1.41 "Eligible Equipment" shall mean Equipment that is and
continues to be acceptable to Agent based on the criteria set forth below.
Equipment shall be Eligible Equipment if:
(a) Borrower shall have delivered, or caused to be
delivered to Agent, written appraisals as to the Equipment, in form, scope and
methodology reasonably acceptable to Agent;
(b) the Equipment shall be described (by model, make,
manufacturer, serial number and/or such other identifying information as may be
appropriate, as reasonably determined by Agent) in a schedule to be submitted by
Borrowers to Agent;
13
(c) Agent shall have a perfected first priority lien on
and security interest in such Equipment and such Equipment shall be subject to
no other lien and security interests, except as permitted pursuant to Section
9.8;
(d) such Equipment shall be located at a premises owned
or leased by Borrowers provided, that, as to locations which are leased by
Borrowers, Agent shall have received a Collateral Access Agreement from the
owner and operator with respect to such location, duly authorized, executed and
delivered by such owner and operator;
(e) such Equipment is located in the United States of
America; and
(f) such Equipment is acceptable to Agent in good faith
as Collateral.
The criteria for Eligible Equipment set forth above may only be changed and any
new criteria for Eligible Equipment may only be established by Agent in good
faith based on either: (i) an event, condition or other circumstance arising
after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent Agent has no written notice thereof
from a Borrower prior to the date hereof, in either case under clause (i) or
(ii) which adversely affects or could reasonably be expected to adversely affect
the Equipment in the good faith determination of Agent. Any Equipment that is
not Eligible Equipment shall nevertheless be and remain at all times part of the
Collateral.
1.42 "Eligible Inventory" shall mean, as to each Borrower,
Inventory of such Borrower consisting of finished goods held for resale in the
ordinary course of the business of such Borrower and raw materials for such
finished goods, in each case that are acceptable to Agent based on the criteria
set forth below. Eligible Inventory shall not include (a) components which are
not part of finished goods; (b) spare parts for equipment; (c) packaging and
shipping materials; (d) supplies used or consumed in such Borrower's business;
(e) Inventory at premises other than those owned or leased and controlled by any
Borrower except if Agent shall have received a Collateral Access Agreement
executed by the Person in possession of such Inventory and/or the owner or
operator of such premises; (f) Inventory subject to a security interest or lien
in favor of any Person other than Agent except those permitted in this Agreement
that are subject to an intercreditor agreement in form and substance
satisfactory to Agent between the holder of such security interest or lien and
Agent; (g) ▇▇▇▇ and hold goods; (h) unserviceable, obsolete or slow moving
Inventory; (i) Inventory that is not subject to the first priority, valid and
perfected security interest of Agent; (j) returned, damaged and/or defective
Inventory; (k) Inventory purchased or sold on consignment, other than finished
goods Inventory consigned by Borrowers to third parties from whom Agent shall
have received an executed Collateral Access Agreement; and (l) Inventory located
outside the United States of America. The criteria for Eligible Inventory set
forth above may only be changed and any new criteria for Eligible Inventory may
only be established by Agent in good faith in accordance with its customary
practices based on either: (i) an event, condition or other circumstance arising
after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent Agent has no written notice thereof
from a Borrower prior to the date hereof, in either case under clause (i) or
(ii) which adversely affects or could reasonably be expected to adversely affect
the Inventory in the
14
good faith determination of Agent. Any Inventory that is not Eligible Inventory
shall nevertheless be part of the Collateral.
1.43 "Eligible Real Property" shall mean all Real Property that is
owned by Borrowers and that is and continues to be acceptable to Agent based on
the criteria set forth below. Real Property shall be Eligible Real Property if:
(a) Agent shall have received updated environmental
audits of such Real Property conducted by an independent environmental
engineering firm reasonably acceptable to Agent, and in form, scope and
methodology reasonably satisfactory to Agent, confirming (i) Borrowers are in
compliance with all material applicable Environmental Laws or, to the extent
that such audit reflects that Borrowers are not in full compliance therewith,
Agent shall have determined in good faith that such non-compliance has not had,
and cannot reasonably be expected to have, a Material Adverse Effect, and (ii)
the absence of any material environmental problems (provided that, Agent
confirms that it received prior to the date hereof all such environmental audits
for Borrowers' Real Property owned as of the date hereof);
(b) Agent shall have a valid and perfected first priority
Mortgage upon such Real Property, which Real Property shall only be subject to
the security interests and liens permitted herein;
(c) Agent shall have received, in form and substance
reasonably satisfactory to Agent, a valid and effective title insurance policy
issued by a company and agent and in an amount reasonably acceptable to Agent
(i) insuring the priority of the Mortgage granted to Agent with respect to such
Real Property, (ii) insuring against matters that would be disclosed by surveys,
and (iii) containing the endorsements, assurances or affirmative coverage
reasonably requested by Agent;
(d) Agent shall have received a written appraisal with
respect to such Real Property in form and substance, and performed by
independent appraisers, reasonably acceptable to Agent;
(e) Agent shall have received, in form and substance
reasonably satisfactory to Agent, all consents, waivers, acknowledgements and
agreements from other third parties which Agent may reasonably deem necessary in
order to permit, protect and perfect the Mortgage and liens upon, and security
interests of Agent in such Real Property and related assets subject to the
Mortgage with respect thereto;
(f) such Real Property is located in the United States of
America; and
(g) such Real Property is acceptable to Agent in good
faith for purposes of making Loans with respect thereto under this Agreement.
The criteria for Eligible Real Property set forth above may only be changed and
any new criteria for Eligible Real Property may only be established by Agent in
good faith based on either: (i) an event, condition or other circumstance
arising after the date hereof, or (ii) an event, condition or
15
other circumstance existing on the date hereof to the extent Agent has no
written notice thereof from a Borrower prior to the date hereof, in either case
under clause (i) or (ii) which adversely affects or could reasonably be expected
to adversely affect the Real Property in the good faith determination of Agent.
Any Real Property that is not Eligible Real Property shall nevertheless be and
at all times remain part of the Collateral.
1.44 "Eligible Transferee" shall mean (a) any Lender; (b) the
parent company of any Lender and/or any Affiliate of such Lender which is more
than fifty (50%) percent owned by such Lender or its parent company; (c) any
person (whether a corporation, partnership, trust or otherwise) that is engaged
in the business of making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or with respect to any Lender that is
a fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor that is more than 50% owned, and in each case is reasonably
approved by Agent and, so long as no Default or Event of Default has occurred
and is continuing, Borrowers, which approval by Borrowers shall not be
unreasonably withheld; and (d) any other commercial bank, financial institution
or "accredited investor" (as defined in Regulation D under the Securities Act of
1933) reasonably approved by Agent and, so long as no Default or Event of
Default has occurred and is continuing, Borrowers, which approval by Borrowers
shall not be unreasonably withheld, provided, that, (i) neither any Borrower nor
any Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an
Eligible Transferee and (ii) no Person to whom any Indebtedness which is in any
way subordinated in right of payment to any other Indebtedness of any Borrower
or Guarantor shall qualify as an Eligible Transferee, except as Agent may
otherwise specifically agree.
1.45 "Environmental Laws" shall mean all applicable foreign,
Federal, State and local laws (including common law), legislation, rules, codes,
licenses, permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between any
Borrower or Guarantor and any Governmental Authority, (a) relating to pollution
and the protection, preservation or restoration of the environment (including
air, water vapor, surface water, ground water, drinking water, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or to safety as it relates to
environmental protection, (b) relating to human exposure to, or the use,
storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating to
recordkeeping, notification, disclosure and reporting requirements respecting
Hazardous Materials. The term "Environmental Laws" includes (i) the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Federal Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean
Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including
the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide,
Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974,
(ii) applicable state counterparts to such laws and (iii) any common law or
equitable doctrine that
16
may impose liability or obligations for injuries or damages due to, or
threatened as a result of, the contamination of the environment by or human
exposure to any Hazardous Materials.
1.46 "Environmental Permits" shall mean all permits, licenses,
approvals, authorizations, consents or registrations required by any applicable
Environmental Law in connection with any Borrower's or Guarantor's ownership,
use and /or operation of the premises, including without limitation, those
required for the disposal, distribution, generation, handling, manufacture,
possession, processing, production, sale, storage, containment, transport,
treatment, release, discharge, emission, remediation, or use of Hazardous
Materials.
1.47 "Equipment" shall mean, as to each Borrower and Guarantor, all
of such Borrower's and Guarantor's now owned and hereafter acquired equipment,
wherever located, including machinery, data processing and computer equipment
and computer hardware and software (whether owned or licensed and including
embedded software), vehicles, tools, furniture, fixtures, all attachments,
accessions and property now or hereafter affixed thereto or used in connection
therewith, and substitutions and replacements thereof, wherever located.
1.48 "Equity Issuance" shall mean (a) any issuance or sale by any
Person of (i) any of its Capital Stock, (ii) any warrants or options exercisable
in respect of its Capital Stock (other than any warrants or options issued to
directors, officers or employees of such Person pursuant to employee benefit
plans established in the ordinary course of business and any Capital Stock
issued upon the exercise of such warrants or options) or (iii) any other
security or instrument representing a membership or other equity interest (or
the right to obtain a membership or other equity interest) in any such Person or
(b) the receipt by such Person of any capital contribution (whether or not
evidenced by a membership interest or other equity security issued by such
Person upon such contribution).
1.49 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, together with all rules, regulations and interpretations thereunder or
related thereto.
1.50 "ERISA Affiliate" shall mean any person required to be aggregated
with any Borrower, any Guarantor or any of its or their respective Subsidiaries
under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
1.51 "ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043(c) of ERISA or the regulations issued thereunder, with
respect to a Plan for which the thirty (30) day notice requirement has not been
waived; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412 of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the occurrence of a "prohibited
transaction" with respect to which any Borrower, Guarantor or any of its or
their respective Subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which any Borrower, Guarantor or
any of its or their respective Subsidiaries could otherwise be liable; (f) a
complete or partial withdrawal by any
17
Borrower, Guarantor or any ERISA Affiliate from a Multiemployer Plan or a
cessation of operations which is treated as such a withdrawal or notification
that a Multiemployer Plan is in reorganization; (g) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the
Pension Benefit Guaranty Corporation to terminate a Plan; (h) an event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (i) the imposition of any liability under Title IV of
ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not
delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or any
ERISA Affiliate in excess of $1,000,000 and (j) any other event or condition
with respect to a Plan including any Plan maintained, or contributed to, by any
ERISA Affiliate that could reasonably be expected to result in liability of any
Borrower in excess of $1,000,000.
1.52 "Eurodollar Rate" shall mean with respect to the Interest
Period for a Eurodollar Rate Loan, the interest rate per annum equal to the
arithmetic average of the rates of interest per annum (rounded upwards, if
necessary, to the next one-thousandth (1/1000th) of one (1%) percent) at which
Reference Bank is offered deposits of United States dollars in the London
interbank market (or other Eurodollar Rate market selected by a Borrower or
Administrative Borrower Representative on behalf of such Borrower and approved
by Agent) on or about 10:00 a.m. (Chicago time) two (2) Business Days prior to
the commencement of such Interest Period in amounts substantially equal to the
principal amount of the Eurodollar Rate Loans requested by and available to such
Borrower in accordance with this Agreement, with a maturity of comparable
duration to the Interest Period selected by or on behalf of a Borrower.
1.53 "Eurodollar Rate Loans" shall mean any Loans or portion
thereof on which interest is payable based on the Adjusted Eurodollar Rate in
accordance with the terms hereof.
1.54 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.
1.55 "Excess Availability" shall mean the amount calculated at any
date, equal to: (a) the lesser of: (i) the Borrowing Base and (ii) the Maximum
Credit (in each case under (i) or (ii) after giving effect to any Reserves other
than any Reserves in respect of Letter of Credit Accommodations), minus (b) the
sum of: (i) the amount of all then outstanding and unpaid Obligations (but not
including for this purpose Obligations of any Borrower arising pursuant to any
guarantees in favor of Agent and Lenders of the Obligations of the other
Borrowers or the then outstanding aggregate principal amount of any outstanding
Letter of Credit Accommodations), plus (ii) the amount of all Reserves then
established in respect of Letter of Credit Accommodations, plus (iii) the
aggregate amount of all then outstanding and unpaid trade payables and other
obligations of such Borrower which are outstanding more than forty-five (45)
days past due as of the end of the immediately preceding month or at Agent's
option, as of a more recent date based on such reports as Agent may from time to
time specify (other than trade payables or other obligations being contested or
disputed by such Borrower in good faith), plus (iv) without duplication, the
amount of checks issued by such Borrower to pay trade payables
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and other obligations that are outstanding (whether or not held by Borrowers),
plus (c) the then existing amount of unrestricted cash and Cash Equivalents of
Borrowers.
1.56 "Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all rules, regulations and interpretations thereunder or related
thereto.
1.57 "Existing Lenders" shall mean the lenders to Borrowers listed
on Schedule 1.57 hereto (and including Highbridge/Zwirm Special Opportunities
Fund, L.P. in its capacity as agent acting for such lenders) and their
respective predecessors, successors and assigns.
1.58 "Existing Letters of Credit" shall mean, collectively, the
letters of credit issued for the account of a Borrower or Guarantor or for which
such Borrower or Guarantor is otherwise liable listed on Schedule 1.58 hereto,
as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.59 "Extraordinary Receipts" shall mean amounts in excess of
$100,000 on an aggregate and cumulative basis that are received after the date
hereof by any Borrower or Guarantor not in the ordinary course of business,
including (a) pension plan reversions, (b) United States, state, local or
foreign tax refunds (to the extent not automatically applied by such Borrower or
Guarantor to future tax payments and except to the extent representing an
overpayment of estimated taxes for the current or the immediately preceding tax
year) and (c) judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, net of compensatory damages and the
costs and expenses incurred to obtain such judgments or settlements, but
expressly excluding from Extraordinary Receipts (i) proceeds of an Equity
Issuance, Debt Issuance or Asset Sale and (ii) insurance or condemnation
proceeds.
1.60 "Fee Letter" shall mean the fee letter, dated as of the date
hereof, by and among Borrowers, Guarantors and Agent, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.61 "Final Order" shall mean a judgment, order, ruling or other
decree issued and entered by the Bankruptcy Court or by any state or other
federal court or other tribunal which judgment, order, ruling or other decree
has not been reversed, stayed, modified or amended and as to which (a) the time
to appeal or petition for review, rehearing or certiorari has expired and as to
which no appeal or petition for review, rehearing or certiorari is pending or
(b) any appeal or petition for review, rehearing or certiorari has been finally
decided and no further appeal or petition for review, review, rehearing or
certiorari can be taken or granted; provided, however, that the possibility that
a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure, or
any analogous rule under the Bankruptcy Rules or applicable state court rules of
civil procedure, may be filed with respect to such order shall not cause such
order not to be a Final Order.
1.62 "Financing Agreements" shall mean, collectively, this
Agreement and all notes, guarantees, security agreements, deposit account
control agreements, investment property control agreements, intercreditor
agreements and all other agreements, documents and instruments now
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or at any time hereafter executed and/or delivered by any Borrower or Obligor in
connection with this Agreement.
1.63 "Fixed Asset Availability" shall have the meaning set forth in
the definition of Borrowing Base.
1.64 "Fixed Charges" shall mean, as to Parent and its Subsidiaries
on a consolidated basis with respect to any period, the sum of, without
duplication, (a) all Interest Expense (which for purposes of this definition
shall not include amortizing payments of deferred financing charges that do not
constitute interest), (b) all Capital Expenditures of Parent and its
Subsidiaries (other than (i) Capital Expenditures that are financed with
proceeds of Indebtedness for borrowed money except for Loans, (ii) Capital
Expenditures that result in an increase in the Fixed Asset Availability and
(iii) Capital Expenditures that are made using the cash proceeds of Asset Sales,
Equity Issuance or Extraordinary Receipts, in each case as to Parent and its
Subsidiaries for such period and to the extent not included in the calculation
of EBITDA of Parent and its Subsidiaries for such period) to the extent
permitted hereunder, (c) cash dividends, repurchases or redemptions paid by
Parent and its Subsidiaries (to the extent permitted under this Agreement and
other than to Parent or Parent's Subsidiaries) during such period in respect of
Capital Stock, (d) all regularly scheduled (as determined at the beginning of
the respective period) payments or prepayments of the principal amount of any
Indebtedness for borrowed money (including, without limitation, the Term Loan
Debt and excluding any Indebtedness arising under this Agreement) and
Indebtedness with respect to Capital Leases (and without duplicating in items
(a) and (b) of this definition, the interest component with respect to
Indebtedness under Capital Leases), (e) Federal, State, local and foreign income
taxes paid in cash, (f) all scheduled reductions in the Fixed Asset Availability
(or the components thereof), and (g) the royalty payments and management fees
paid in cash (in each case as to Parent and its Subsidiaries for such period and
to the extent not included in the calculation of EBITDA of Parent and its
Subsidiaries for such period).
1.65 "Fixed Charge Coverage Ratio" shall mean, as to Parent and its
Subsidiaries, with respect to each trailing twelve (12) month period, the ratio
of (a) the amount equal to EBITDA of Parent its Subsidiaries for such period to
(b) the Fixed Charges of Parent and its Subsidiaries for such period. For the
period from October 2003 through and including August 2004, EBITDA and Fixed
Charges for any given month shall be as set forth on Schedule 9.17. For the
period from September 2004 through and including October 2004, EBITDA and Fixed
Charges shall be calculated on a pro forma basis consistent with the methodology
used in preparing Schedule 9.17. For each month thereafter, EBITDA and Fixed
Charges shall be calculated based upon the financial statements requested to be
delivered hereunder. In the event that, after the date hereof, Parent restates
its results of operations for any month set forth on Schedule 9.17, EBITDA for
such months shall be recalculated to reflect such restatement on a basis
reasonably acceptable to Agent.
1.66 "Funding Bank" shall have the meaning set forth in Section 3.3
hereof.
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1.67 "GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Section 9.17, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the
preparation of the most recent audited financial statements delivered to Agent
prior to the date hereof.
1.68 "Governmental Authority" shall mean any nation or government,
any state, province, or other political subdivision or department thereof, any
central bank (or similar monetary or regulatory authority) thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
1.69 "Guarantors" shall mean, collectively, the Parent and any
other Person that hereafter guarantees the payment and performance of the
Obligations (together with their respective successors and assigns); each
sometimes being referred to herein individually as a "Guarantor".
1.70 "Hazardous Materials" shall mean any hazardous, toxic or
dangerous substances, materials and wastes, including hydrocarbons (including
naturally occurring or man-made petroleum and hydrocarbons), flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
bio-hazardous substances, polychlorinated biphenyls, pesticides, herbicides and
any other kind and/or type of pollutants or contaminants (including materials
which include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials, or wastes that are classified,
characterized or regulated as hazardous or toxic under Environmental Laws.
1.71 "Hedging Agreements" shall mean an agreement between any
Borrower or Guarantor and any Affiliate of Agent or any other financial
institution reasonably acceptable to Agent (such acceptance not to be
unreasonably withheld) that is a rate swap agreement, basis swap, forward rate
agreement, commodity swap, interest rate option, forward foreign exchange
agreement, spot foreign exchange agreement, rate cap agreement rate, floor
agreement, rate collar agreement, currency swap agreement, cross-currency rate
swap agreement, currency option, any other similar agreement (including any
option to enter into any of the foregoing or a master agreement for any of the
foregoing together with all supplements thereto) for the purpose of protecting
against fluctuations in or managing exposure with respect to interest or
exchange rates, currency valuations or commodity prices; sometimes being
collectively referred to herein as "Hedging Agreements".
1.72 "Hedging Reserves" shall mean Reserves established by Agent
from time to time with respect to Borrowers' Indebtedness arising under Hedging
Agreements, as determined by Agent in good faith.
1.73 "Hilco" shall have the meaning set forth in Section 4.1
hereof.
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1.74 "Hose Claim Litigation" means the litigation relating to
certain water inlet hoses previously supplied by and through Borrowers and/or
Guarantors to certain customers, as more fully set forth in Schedule 8.6 to the
Information Certificate.
1.75 "Hose Claim Litigation Proceeds" means the proceeds of any
judgment, settlement or other consideration paid to any Borrower or Guarantor in
connection with the Hose Claim Litigation.
1.76 "Indebtedness" shall mean, with respect to any Person, any
liability, whether or not contingent, and without duplication, (a) in respect of
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof) or evidenced by bonds,
notes, debentures or similar instruments; (b) representing the balance deferred
and unpaid of the purchase price of any property or services (except any such
balance that constitutes an account payable to a trade creditor (whether or not
an Affiliate) created, incurred, assumed or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials or services that is not overdue by more than one hundred twenty (120)
days, unless the trade payable is being contested in good faith); (c) all
obligations as lessee under leases which have been, or should be, in accordance
with GAAP recorded as Capital Leases to the extent capitalized on the balance
sheet (i.e., not including any interest expense component); (d) any contractual
obligation, contingent or otherwise, of such Person to pay or be liable for the
payment of any Indebtedness described in this definition of another Person,
including, without limitation, any such indebtedness, directly or indirectly
guaranteed, or any agreement to purchase, repurchase, or otherwise acquire such
indebtedness, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof, or to maintain solvency, assets,
level of income, or other financial condition; (e) all obligations (other than
obligations to issue common Capital Stock) with respect to redeemable stock and
redemption or repurchase obligations under any Capital Stock or other equity
securities issued by such Person; (f) all non-contingent reimbursement
obligations and other non-contingent liabilities of such Person with respect to
surety bonds (whether bid, performance or otherwise), (g) all reimbursement
obligations and other liabilities of such Person with respect to letters of
credit, banker's acceptances, drafts or similar documents or instruments issued
for such Person's account; (h) all indebtedness of such Person in respect of
indebtedness of another Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is secured by any consensual
lien, security interest, collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such Person, whether or not such
obligations, liabilities or indebtedness are assumed by or are a personal
liability of such Person, all as of such time; (i) all net obligations,
liabilities and indebtedness of such Person (marked to market) arising under
Hedging Agreements; (j) all obligations owed by such Person under License
Agreements with respect to non-refundable, advance or minimum guarantee royalty
payments; and (k) the principal portion of all rental obligations of such Person
under any synthetic lease or similar off-balance sheet financing where such
transaction is considered to be borrowed money for tax purposes but is
classified as an operating lease in accordance with GAAP.
1.77 "Indemnitee" shall have the meaning set forth in Section 11.5
hereof.
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1.78 "Information Certificate" shall mean the Information
Certificate of Borrowers and Guarantors constituting Exhibit B hereto.
1.79 "Insulated Wire Division" means the business and operations of
the Borrowers and Guarantors related to the manufacture and sale of insulated
wire products as conducted on the date hereof by the Subsidiaries of Parent
named in Schedule 1.79 and as permitted to be conducted pursuant to the terms of
Section 9.15.
1.80 "Intellectual Property" shall mean, as to each Borrower and
Guarantor, such Borrower's and Guarantor's now owned and hereafter arising or
acquired: patents, patent rights, patent applications, copyrights, works which
are the subject matter of copyrights, copyright applications, copyright
registrations, trademarks, servicemarks, trade names, trade styles, trademark
and service ▇▇▇▇ applications, and licenses and rights to use any of the
foregoing and all applications, registrations and recordings relating to any of
the foregoing as may be filed in the United States Copyright Office, the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, any political subdivision thereof or in any
other country or jurisdiction, together with all rights and privileges arising
under applicable law with respect to any Borrower's or Guarantor's use of any of
the foregoing; all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to ▇▇▇ for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill (including any goodwill
associated with any trademark or servicemark, or the license of any trademark or
servicemark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain
name registration; software and contract rights relating to computer software
programs, in whatever form created or maintained.
1.81 "Interest Expense" shall mean, for any period, as to Parent
and its Subsidiaries, as determined in accordance with GAAP, the total interest
expense of Parent and its Subsidiaries, whether paid or accrued during such
period (including the interest component of Capital Leases for such period),
including, without limitation, discounts in connection with the sale of any
Accounts permitted hereunder, bank fees, commissions, discounts and other fees
and charges owed with respect to letters of credit, banker's acceptances or
similar instruments and payments made pursuant to Hedging Agreements covering
interest rate risk, but excluding any such payment paid in property other than
cash and any other interest expense not payable in cash.
1.82 "Interest Period" shall mean for any Eurodollar Rate Loan, a
period of approximately one (1), two (2), three (3) or six (6) months duration
as any Borrower (or Administrative Borrower Representative on behalf of such
Borrower) may elect, the exact duration to be determined in accordance with the
customary practice in the applicable Eurodollar Rate market; provided, that,
such Borrower (or Administrative Borrower Representative on behalf of such
Borrower) may not elect an Interest Period which will end after the last day of
the then-current term of this Agreement.
1.83 "Interest Rate" shall mean,
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(a) Subject to clause (b) of this definition below:
(i) as to Prime Rate Loans, a rate equal to the
Applicable Margin plus the Prime Rate; and
(ii) as to Eurodollar Rate Loans, a rate equal to
the Applicable Margin plus the Adjusted Eurodollar Rate (in each case, based on
the Eurodollar Rate applicable for the Interest Period selected by a Borrower,
or by Administrative Borrower Representative on behalf of such Borrower, as in
effect three (3) Business Days after the date of receipt by Agent of the request
of or on behalf of such Borrower for such Eurodollar Rate Loans in accordance
with the terms hereof, whether such rate is higher or lower than any rate
previously quoted to any Borrower or Guarantor).
(b) Notwithstanding anything to the contrary contained in
clause (a) of this definition, the Interest Rate shall mean the rate of two (2%)
percent per annum in excess of the sum of the Prime Rate plus the Applicable
Margin as to Prime Rate Loans and the rate of two (2%) percent per annum in
excess of the sum of the Adjusted Eurodollar Rate plus the Applicable Margin as
to Eurodollar Rate Loans, at Agent's option, without notice, (i) either (A) for
the period on and after the date of termination or non-renewal hereof until such
time as all Obligations are indefeasibly paid and satisfied in full in
immediately available funds, or (B) for the period from and after the date of
the occurrence of any Event of Default, and for so long as such Event of Default
is continuing and (ii) on the Revolving Loans at any time outstanding in excess
of the Borrowing Base or the Revolving Loan Limit (whether or not such
excess(es) arise or are made with or without Agent's or any Lender's knowledge
or consent and whether made before or after an Event of Default);
(c) Notwithstanding anything to the contrary contained in
this definition of Interest Rate or otherwise in this Agreement, for purposes of
determining the Interest Rate on any date of determination, (i) all outstanding
Revolving Loans shall first be deemed to be Revolving Loans that were made based
on Fixed Asset Availability and Supplemental Availability as of such date, to
the extent of Revolving Loans in an aggregate amount that do not exceed the sum
of the then existing Fixed Asset Availability and the then existing Supplemental
Availability, and Revolving Loans outstanding as of such date that are in excess
of the sum of the then existing Fixed Asset Availability and the then existing
Supplemental Availability shall be deemed to be Revolving Loans that were made
based on Current Asset Availability, and (ii) all payments at any time received
by Agent with respect to outstanding Revolving Loans shall be first deemed to be
applied to Revolving Loans that were made based on then existing Current Asset
Availability, and any portion of such payment received by Agent that exceeds the
then existing Current Asset Availability shall be next deemed to be applied to
Revolving Loans that were made based on Fixed Asset Availability and
Supplemental Availability.
1.84 "Inventory" shall mean, as to each Borrower and Guarantor, all
of such Borrower's and Guarantor's now owned and hereafter existing or acquired
goods, wherever located, which (a) are leased by such Borrower or Guarantor as
lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be
furnished under a contract of service; (c) are
24
furnished by such Borrower or Guarantor under a contract of service; or (d)
consist of raw materials, work in process, finished goods or materials used or
consumed in its business.
1.85 "Investment Property Control Agreement" shall mean an
agreement in writing, in the form attached as Exhibit E or such other agreement
in form and substance reasonably satisfactory to Agent, by and among Agent, any
Borrower or Guarantor (as the case may be) and any securities intermediary,
commodity intermediary or other person who has custody, control or possession of
any investment property of such Borrower or Guarantor acknowledging that such
securities intermediary, commodity intermediary or other person has custody,
control or possession of such investment property on behalf of Agent, that it
will comply with entitlement orders originated by Agent with respect to such
investment property, or other instructions of Agent, and has such other terms
and conditions as Agent may reasonably require.
1.86 "Lender Register" shall have the meaning set forth in Section
13.7(b).
1.87 "Lenders" shall mean the financial institutions who are
signatories hereto as Lenders and other persons made a party to this Agreement
as a Lender in accordance with Section 13.7 hereof, and their respective
successors and assigns; each sometimes being referred to herein individually as
a "Lender".
1.88 "Letter of Credit Accommodations" shall mean, collectively,
the letters of credit, merchandise purchase or other guaranties which are from
time to time either (a) issued or opened by Agent or any Lender, in its capacity
as such, for the account of any Borrower or Obligor or (b) with respect to which
Agent or Lenders, in their capacity as such, have agreed to indemnify the issuer
or guaranteed to the issuer the performance by any Borrower or Obligor of its
obligations to such issuer; sometimes being referred to herein individually as
"Letter of Credit Accommodation".
1.89 "License Agreements" shall have the meaning set forth in
Section 8.11 hereof.
1.90 "Loans" shall mean the Revolving Loans.
1.91 "Material Adverse Effect" shall mean a material adverse effect
on (a) the financial condition, business, performance, operations or prospects
of Borrowers, Guarantors and their Subsidiaries taken as a whole; (b) the
legality, validity or enforceability of this Agreement or any of the other
Financing Agreements; (c) the legality, validity, enforceability, perfection or
priority of the security interests and liens of Agent upon the Collateral; (d)
the Collateral or its value; (e) the ability of any Borrower to repay the
Obligations or of any Borrower to perform its obligations under this Agreement
or any of the other Financing Agreements as and when to be performed; or (f) the
ability of Agent or any Lender to enforce the Obligations or realize upon the
Collateral or otherwise with respect to the rights and remedies of Agent and
Lenders under this Agreement or any of the other Financing Agreements.
1.92 "Material Contract" shall mean any contract or other agreement
(other than the Financing Agreements), whether written or oral, to which any
Borrower or Guarantor is a party
25
as to which the breach, nonperformance, cancellation or failure to renew by any
party thereto would have a Material Adverse Effect.
1.93 "Maximum Credit" shall mean the amount of $110,000,000.
1.94 "Monthly Average Excess Availability" shall mean, at any time,
the daily average of the Excess Availability for the immediately preceding
calendar month.
1.95 "Mortgages" shall mean, individually and collectively, each of
the mortgages, deeds of trust and similar instruments, each dated of event date
herewith (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): granted in favor of
Agent by the applicable Borrower with respect to the Real Property and related
assets of such Borrower as described on Schedule 1.95.
1.96 "Multiemployer Plan" shall mean a "multi-employer plan" as
defined in Section 4001(a)(3) of ERISA which is or was at any time during the
current year or the immediately preceding six (6) years contributed to by any
Borrower, Guarantor or any ERISA Affiliate.
1.97 "Net Amount of Eligible Accounts" shall mean the gross amount
of the Eligible Accounts less (a) sales, excise or similar taxes included in the
amount thereof and (b) returns, discounts, claims, credits and allowances of any
nature at any time issued, owing, granted, outstanding, available or claimed
with respect thereto.
1.98 "Net Cash Proceeds" means with respect to any Asset Sale
(other than Asset Sales permitted by Sections 9.7(b)(i), 9.7(b)(iii) through
(b)(viii), inclusive, 9.7(b)(x) through (b)(xiii), inclusive, and 9.7(b)(xv)),
Equity Issuance, Debt Issuance or Extraordinary Receipts by any Person, the cash
proceeds received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of any Borrower or Guarantor in respect of such Asset Sale,
Equity Issuance (other than Equity Issuances permitted by Sections 9.7(b)(xi)
and 9.7(b)(xiii) and by Section 9.10(c)), Debt Issuance or Extraordinary
Receipts, after deducting therefrom only (but in each case only to the extent
any such amounts are not payable to an Affiliate of such Person (except as
permitted by this Agreement) and to the extent properly attributable to such
transaction or to the asset that is the subject thereof):
(a) in the case of any Asset Sale, (i) the reasonable
expenses incurred by such Person directly related to such Asset Sale, (ii)
brokerage costs, fees, or commissions incurred by such Person directly related
to such Asset Sale, (iii) the amounts paid from such proceeds at the time of the
sale thereof in respect of any Indebtedness (other than the Obligations) secured
by any security interest or lien permitted by Section 9.8 hereof or otherwise
hereunder on the asset that is the subject of such Asset Sale, (iv) transfer
taxes paid or payable within twelve (12) months to any taxing authorities by
such Person in connection therewith and (v) net income taxes to be paid in
connection with such Asset Sale (after taking into account any tax credits or
deductions and any tax sharing arrangements),
26
(b) in the case of any Equity Issuance or Debt Issuance,
(i) reasonable expenses directly related to such Equity Issuance or Debt
Issuance, (ii) reasonable underwriting or brokerage costs, fees and commissions
directly related to such Equity Issuance or Debt Issuance, (iii) transfer taxes
paid or payable within twelve (12) months to any taxing authorities by such
Person in connection therewith and (iv) net income taxes to be paid in
connection with such Equity Issuance or Debt Issuance (after taking into account
any tax credits or deductions and any tax sharing arrangements), and
(c) in the case of any Extraordinary Receipts, (i)
reasonable expenses directly related to such Extraordinary Receipts and
collection or proof thereof, (ii) the amounts paid from such proceeds at the
time of the receipt thereof in respect of any Indebtedness (other than the
Obligations) secured by any security interest or lien permitted by Section 9.8
hereof or otherwise permitted hereunder on the asset with respect to which such
Extraordinary Receipts were delivered, (iii) transfer taxes paid or payable
within twelve (12) months to any taxing authorities by such Person in connection
therewith and (iv) net income taxes to be paid in connection with such
Extraordinary Receipts (after taking into account any tax credits or deductions
and any tax sharing arrangements),
1.99 "Net Liquidation Value" shall mean with respect to Eligible
Equipment the amount equal to the amount of the recovery in respect of the
Eligible Equipment at such time on a "net forced liquidation value" basis as set
forth in the most recent acceptable appraisal of Equipment received by Agent in
accordance with Section 7.4, net of liquidation expenses and commissions.
1.100 "Net Recovery Percentage" shall mean the fraction, expressed
as a percentage, (a)the numerator of which is the amount equal to the amount of
the recovery in respect of the Inventory at such time on a "net orderly
liquidation value" basis as set forth in the most recent acceptable appraisal of
Inventory received by Agent in accordance with Section 7.3, net of operating
expenses, liquidation expenses and commissions, and (b) the denominator of which
is the applicable original cost of the aggregate amount of the Inventory subject
to such appraisal.
1.101 "New Lending Office" shall have the meaning set forth in
Section 6.11(d) hereof.
1.102 "New Notes" shall mean, collectively, the 10% Secured Senior
Subordinated Notes in the original principal amount of $75,000,000, issued by
Parent pursuant to the New Notes Indenture, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced (to the extent not prohibited by this Agreement and the New Notes
Intercreditor Agreement).
1.103 "New Notes Indenture" shall mean the Indenture, dated on or
about the date hereof, among Parent, the New Notes Trustee and certain
Subsidiaries of Parent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced (to the extent
not prohibited by this Agreement and the New Notes Intercreditor agreement).
27
1.104 "New Notes Intercreditor Agreement" shall mean the
Intercreditor and Subordination Agreement, dated of even date herewith, executed
by and among Agent, Term Loan Agent and the New Notes Trustee, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
1.105 "New Notes Trustee" shall mean BNY Midwest Trust Company, in
its capacity as trustee under the New Notes Indenture for the holders of the New
Notes and any successor, replacement or additional trustee under the New Notes
Indenture, and their respective successors and assigns.
1.106 "Non-Consenting Lender" shall have the meaning set forth in
Section 11.3 hereof.
1.107 "Non-Restricted Asset" shall have the meaning set forth in
Section 5.1 hereof.
1.108 "Non-U.S. Lender" shall have the meaning set forth in Section
6.11(d) hereof.
1.109 "Obligations" shall mean any and all Loans, Letter of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any or all of Borrowers to Agent or any
Lender and/or any of their Affiliates, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, arising under this Agreement or any of the
other Financing Agreements, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of this
Agreement or after the commencement of any case with respect to such Borrower
under the United States Bankruptcy Code or any similar statute (including the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in such case), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, or secured or unsecured.
1.110 "Obligor" shall mean any guarantor, endorser, acceptor, surety
or other person liable on or with respect to the Obligations or who is the owner
of any property which is security for the Obligations (including, without
limitation, Guarantors), other than Borrowers.
1.111 "Omega" shall mean Omega Wire, Inc., a Delaware corporation,
and its successors and assigns permitted hereunder.
1.112 "Other Taxes" shall have the meaning set forth in Section
6.11(b) hereof.
1.113 "OWI" shall mean OWI Corporation, a New York corporation, and
its successors and assigns permitted hereunder.
1.114 "Parent" shall mean International Wire Group, Inc., a Delaware
corporation, and its successors and assigns permitted hereunder.
1.115 "Participant" shall mean any financial institution that
acquires and holds a participation in the interest of any Lender in any of the
Loans and Letter of Credit
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Accommodations in conformity with the provisions of Section 13.7 of this
Agreement governing participations.
1.116 "Permits" shall have the meaning set forth in Section 8.7(b)
hereof.
1.117 "Permitted Acquisitions" shall have the meaning set forth in
Section 9.10(n).
1.118 "Permitted Foreign Subsidiary Credit Facility" shall have the
meaning set forth in Section 9.9 hereof.
1.119 "Permitted Holders" shall mean the persons listed on Schedule
1.119 hereto and their respective successors and assigns.
1.120 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which elects
subchapter S status under the Code), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.121 "Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA and as covered by Title IV of ERISA) which any Borrower or
Guarantor or ERISA Affiliate sponsors, maintains, or to which it makes, is
making, or is obligated, or has at any time within the preceding six (6) plan
years been obligated, to make contributions, including Multiemployer Plans.
1.122 "Prime Rate" shall mean the rate from time to time publicly
announced by Wachovia Bank, National Association, or its successors, as its
prime rate, whether or not such announced rate is the best rate available at
such bank.
1.123 "Prime Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
thereof.
1.124 "Pro Forma Cost Savings" means, with respect to any period for
which EBITDA is being calculated hereunder, the reduction in net costs and
related adjustments that (a) were directly attributable to a Permitted
Acquisition that occurred during such period, as calculated on a basis that is
consistent with Regulation S-X of the Securities and Exchange Commission as in
effect on the date hereof, or (b) were actually implemented during such period
with respect to the Person or business that was the subject of a Permitted
Acquisition, or are reasonably probable of being implemented within twelve
months after the consummation of the Permitted Acquisition, are supportable and
quantifiable based upon the underlying accounting records of such Person or
business, or binding agreements or other commitments of third parties, or such
other support and verification acceptable to the Agent, and relate to headcount
reductions, cost reductions for material, supplies and services, or plant
consolidations. The aggregate amount of the Pro Forma Cost Savings included in
the calculation of EBITDA with respect to all Permitted Acquisitions after the
date of this Agreement shall not exceed $5,000,000. All Pro Forma Cost Savings
shall be set forth in calculations (the "Cost Savings Budget") provided in
writing to the Agent prior to
29
the consummation of the Permitted Acquisition, which describe the specific
actions taken or to be taken, the net cost savings achieved or to be achieved,
the time period within which such cost savings are projected to be realized, and
the reasons that savings are considered to be probable.
1.125 "Projections" shall having the meaning set forth in Section
9.6 hereof.
1.126 "Pro Rata Share" shall mean as to any Lender, the fraction
(expressed as a percentage) the numerator of which is such Lender's Commitment
and the denominator of which is the aggregate amount of all of the Commitments
of Lenders, as adjusted from time to time in accordance with the provisions of
Section 13.7 hereof; provided, that, if the Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and its interest
in the Letter of Credit Accommodations and the denominator shall be the
aggregate amount of all unpaid Loans and Letter of Credit Accommodations.
1.127 "Provision for Taxes" shall mean an amount equal to all taxes
imposed on or measured by net income, whether Federal, State, Provincial, county
or local, and whether foreign or domestic, that are paid or payable by any
Person in respect of any period in accordance with GAAP.
1.128 "Real Property" shall mean all now owned and hereafter
acquired real property of each Borrower and Guarantor, including leasehold
interests, together with all buildings, structures, and other improvements
located thereon and all licenses, easements and appurtenances relating thereto,
wherever located, including the real property and related assets more
particularly described in the Mortgages.
1.129 "Receivables" shall mean all of the following now owned or
hereafter arising or acquired property of each Borrower and Guarantor: (a) all
Accounts; (b) all interest, fees, late charges, penalties, collection fees and
other amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters
of credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in connection with any Account; or (e)
all other accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Borrower or Guarantor,
whether from the sale and lease of goods or other property, licensing of any
property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or Guarantor to
or for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims, any funds which may become payable to any Borrower or
Guarantor in connection with the termination of any Plan or other employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
30
thereof and proceeds of insurance covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).
1.130 "Records" shall mean, as to each Borrower and Guarantor, all
of such Borrower's and Guarantor's present and future books of account of every
kind or nature, purchase and sale agreements, invoices, ledger cards, bills of
lading and other shipping evidence, statements, correspondence, memoranda,
credit files and other data relating to the Collateral or any account debtor,
together with the tapes, disks, diskettes and other data and software storage
media and devices, file cabinets or containers in or on which the foregoing are
stored (including any rights of any Borrower or Guarantor with respect to the
foregoing maintained with or by any other person).
1.131 "Reel Sale Division" means the business and operations of the
Borrowers and Guarantors and their Subsidiaries related to the manufacture and
sale of bare and tin-plated copper wire products as conducted on the date hereof
by the Subsidiaries of Parent named in Schedule 1.131 and as permitted to be
conducted pursuant to Section 9.15.
1.132 "Reference Bank" shall mean Wachovia Bank, National
Association, or such other bank as Agent may from time to time designate.
1.133 "Register" shall have the meaning set forth in Section 13.7
hereof.
1.134 "Renewal Date" shall have the meaning set forth in Section
13.1 hereof.
1.135 "Report" shall have the meaning set forth in Section 12.10
hereof.
1.136 "Required Lenders" shall mean, at any time, those Lenders
whose Pro Rata Shares aggregate more than fifty percent (50%) percent of the
aggregate of the Commitments of all Lenders, or if the Commitments shall have
been terminated, Lenders to whom more than fifty percent (50%) of the then
outstanding Obligations are owing; provided that the Commitments of or
Obligations owing to any Defaulting Lender shall be excluded for the purposes of
making a determination of Required Lenders.
1.137 "Reserves" shall mean:
(a) as of any date of determination, such amounts as
Agent may from time to time establish and revise in good faith, reducing the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to any Borrower under the lending formula(s) provided for
herein (to the extent not already reflected in the Borrowing Base): (i) to
reflect events, conditions, contingencies or risks which, as determined by Agent
in good faith, adversely affect, or would have a reasonable likelihood of
adversely affecting, either (A) the Collateral or any other property which is
security for the Obligations, its value or the amount that might be received by
Agent from the sale or other disposition or realization upon such Collateral, or
(B) the assets, business or prospects of any Borrower or Obligor or (C) the
security interests and other rights of Agent or any Lender in the Collateral
(including the enforceability, perfection and priority thereof) or (ii) to
reflect Agent's good faith belief that any collateral report or
31
financial information furnished by or on behalf of any Borrower or Obligor to
Agent is or may have been incomplete, inaccurate or misleading in any material
respect or (iii) to reflect outstanding Letter of Credit Accommodations as
provided in Section 2.2 hereof or (iv) in respect of any state of facts which
Agent determines in good faith constitutes a Default or an Event of Default.
Agent shall provide Borrower Representative with contemporaneous notice of any
Reserves established at any time after the date hereof, provided, that, Agent's
failure to provide such notice shall in no manner limit or otherwise affect the
validity of any such Reserve established by Agent with respect to which Agent
neglected to provide such contemporaneous notice;
(b) Without limiting the generality of the foregoing,
Reserves may, at Agent's option, be established to reflect (to the extent not
already reflected in the Borrowing Base): (i) dilution with respect to the
Accounts (based on the ratio of the aggregate amount of non-cash reductions in
Accounts for any period to the aggregate dollar amount of the sales of such
Borrower for such period) as calculated by Agent for any period is or is
reasonably anticipated to be greater than five (5%) percent; (ii) reel reserves
with respect to customer deposits reflected as a liability on Borrowers'
Records, adjusted from time to time to the extent Borrowers' Records reflect
increases or decreases in the customer deposit liability account; (iii) to
reflect that the orderly liquidation value of the Equipment or fair market value
of any of the Real Property as set forth in the most recent acceptable
appraisals received by Agent with respect thereto has declined so that the then
Fixed Asset Availability is greater than the percentages with respect to such
appraised values as Agent used in establishing the original amounts of the Fixed
Asset Availability multiplied by such appraised values; (iv) returns, discounts,
claims, credits and allowances of any nature that are not paid pursuant to the
reduction of Accounts; or sales, excise or similar taxes included in the amount
of any Accounts reported to Agent; (v) a change in the turnover, age or mix of
the categories of Inventory that adversely affects the aggregate value of all
Inventory; variances between Borrowers' Records for Inventory and the results of
test counts or physical counts of Inventory with respect thereto and variances
between Borrowers' stock ledger Inventory report and general ledger; (vi)
amounts due or to become due to owners and lessors of premises where any
Collateral included in the Borrowing Base is located, other than for those
locations where Agent has received a Collateral Access Agreement that Agent has
accepted in writing; (vii) Hedging Reserves; or (viii) any Reserves required as
a result of the Term Loan Intercreditor Agreement. The amount of any Reserve
established by Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such reserve as determined by
Agent in good faith. Reserves with respect to Letter of Credit Accommodations
shall be limited as set forth in Section 2.2.
1.138 "Resources" shall mean IWG Resources, LLC, a Nevada limited
liability company, and its successors and assigns permitted hereunder.
1.139 "Restricted Asset" shall have the meaning set forth in Section
5.1 hereof.
1.140 "Revolving Loan Limit" shall mean, at any time, the amount
equal to the Maximum Credit minus the then outstanding principal amount of the
Revolving Loans and Letter of Credit Accommodations.
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1.141 "Revolving Loans" shall mean the loans now or hereafter made
by or on behalf of any Lender or by Agent for the account of any Lender on a
revolving basis pursuant to the Credit Facility (involving advances, repayments
and readvances) as set forth in Section 2.1 hereof.
1.142 "Rome" shall mean International Wire Rome Operations, Inc., a
Delaware corporation, and its successors and assigns permitted hereunder.
1.143 "Settlement Period" shall have the meaning set forth in
Section 6.10 hereof.
1.144 "Solvent" shall mean, at any time with respect to any Person,
that at such time such Person (a) is able to pay its debts as they mature and
has (and has a reasonable basis to believe it will continue to have) sufficient
capital (and not unreasonably small capital) to carry on its business consistent
with its practices as of the date hereof, and (b) the assets and properties of
such Person at a fair valuation (and including as assets for this purpose at a
fair valuation all rights of subrogation, contribution or indemnification
arising pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).
1.145 "Special Agent Advances" shall have the meaning set forth in
Section 12.11 hereof.
1.146 "Specified Sale" shall have the meaning set forth in that
certain letter agreement re: Specified Sale executed concurrently herewith by
and among Borrowers, Guarantors, Agent and Lenders.
1.147 "Subsidiary" or "subsidiary" shall mean, with respect to any
Person, any corporation, limited liability company, limited liability
partnership or other limited or general partnership, trust, association or other
business entity of which an aggregate of at least a majority of the outstanding
Capital Stock or other interests entitled to vote in the election of the board
of directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person.
1.148 "Supplemental Availability" shall have the meaning set forth
in the definition of Borrowing Base.
1.149 "Target" shall have the meaning set forth in Section 9.10(n)
hereof.
1.150 "Taxes" shall have the meaning set forth in Section 6.11(a)
hereof.
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1.151 "Term Loan Agent" shall mean Silver Point Finance, LLC, a
Delaware limited liability company, in its capacity as agent acting for and on
behalf of Term Loan Lenders pursuant to the Term Loan Documents and any
replacement or successor agent thereunder.
1.152 "Term Loan Agreement" shall mean the Loan and Security
Agreement, dated on or about the date hereof, by and among Term Loan Agent, Term
Loan Lenders, Borrowers and Guarantors, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.
1.153 "Term Loan Debt" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description now or at any time hereafter
owing by Borrowers and Guarantors to Term Loan Agent and Term Loan Lenders,
including principal, interest, charges, fees, premiums, indemnities, costs and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, arising under or in connection with the Term Loan Documents.
1.154 "Term Loan Documents" shall mean, collectively, the following
(as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced): (a) the Term Loan Agreement; (b) all
notes, guarantees, security agreements, deposit account control agreements,
investment property control agreements and intercreditor agreements, in each
case, executed in connection with the Term Loan Agreement; and (c) all other
agreements, documents and instruments at any time executed and/or delivered by
any Borrower or Guarantor with, to or in favor of Term Loan Agent or Term Loan
Lenders in connection therewith or related thereto; sometimes being referred to
herein individually as a "Term Loan Document".
1.155 "Term Loan Intercreditor Agreement" shall mean the
Intercreditor Agreement, dated of even date herewith, executed by and between
Term Loan Agent and Agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.156 "Term Loan Lenders" shall mean each Person that is now or
hereafter party to the Term Loan Documents as a Lender thereunder.
1.157 "Transferee" shall have the meaning set forth in Section
6.11(a) hereof.
1.158 "Trigger Event" shall mean, as of any date of determination,
(a) the occurrence and continuance of a Default or Event of Default and/or (b)
the Average Thirty Day Excess Availability being less than $20,000,000 and/or
(c) the Excess Availability on such date being less than $20,000,000.
1.159 "UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York, and any successor statute, as in effect from time to time
(except that terms used herein which are defined in the Uniform Commercial Code
as in effect in the State of New York on the date hereof shall continue to have
the same meaning notwithstanding any replacement or amendment of such statute
except as Agent may otherwise determine).
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1.160 "U.S. Person" shall have the meaning set forth in Section
6.11(g) hereof.
1.161 "Value" shall mean, with respect to Inventory, the lower of
(a) cost computed on a first-in first-out basis in accordance with GAAP or (b)
market value, provided, that, for purposes of the calculation of the Borrowing
Base, (i) the Value of the Inventory shall not include: (A) the portion of the
value of Inventory equal to the profit earned by any Affiliate on the sale
thereof to any Borrower or (B) write-ups or write-downs in value with respect to
currency exchange rates and (ii) notwithstanding anything to the contrary
contained herein, the cost of the Inventory shall be computed in the same manner
and consistent with the most recent appraisal of the Inventory received and
accepted by Agent prior to the date hereof, if any, provided, however, that,
Agent may, in its good faith determination, at any time prior to Agent's receipt
of an updated Inventory appraisal, recompute the cost of the Inventory, as a
result of material fluctuations in the cost of copper subsequent to Agent's
receipt of the most recent Inventory appraisal, supported by such detail as
Agent shall reasonably request in connection therewith, including, without
limitation, pounds of copper in Borrowers' raw materials, work-in-process and
finished goods categories and current market pricing at the Comex Division of
the New York Mercantile Exchange or such other commodities exchange as shall be
selected by Borrowers and approved by Agent.
1.162 "Voting Stock" shall mean with respect to any Person, one (1)
or more classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency.
1.163 "wholly-owned Subsidiary" shall mean, as to any Person, any
Subsidiary of which such Person owns, directly or indirectly, all of the Capital
Stock of such Subsidiary other than directors' qualifying shares or any shares
held by nominees to the extent required to be held under applicable law.
1.164 "Wire Technologies" shall mean Wire Technologies, Inc., an
Indiana corporation, and its successors and assigns permitted hereunder.
SECTION 2. CREDIT FACILITIES
2.1 Loans.
(a) Subject to and upon the terms and conditions
contained herein, each Lender severally (and not jointly) agrees to make its Pro
Rata Share of Revolving Loans to Borrowers from time to time in amounts
requested by Borrowers (or Administrative Borrower Representative on behalf of
Borrowers) up to the aggregate amount outstanding for all Lenders at any time
equal to the lesser of: (i) the Borrowing Base at such time or (ii) the
Revolving Loan Limit at such time.
(b) Except in Agent's discretion, with the consent of all
Lenders, or as otherwise provided herein, (i) the aggregate principal amount of
the Loans and the Letter of Credit
35
Accommodations outstanding at any time shall not exceed the Maximum Credit, (ii)
the aggregate principal amount of the Revolving Loans and Letter of Credit
Accommodations outstanding at any time to Borrowers shall not exceed the
Borrowing Base, and (iii) no Revolving Loans or Letter of Credit Accommodations
shall be made or issued at any time if, after giving effect thereto, the
aggregate principal amount of the Revolving Loans and Letter of Credit
Accommodations then outstanding to Borrowers shall exceed the Revolving Loan
Limit.
(c) In the event that the aggregate principal amount of
the Revolving Loans and Letter of Credit Accommodations outstanding to Borrowers
exceed the Borrowing Base or the Revolving Loan Limit, or the aggregate amount
of the outstanding Letter of Credit Accommodations exceed the sublimit for
Letter of Credit Accommodations set forth in Section 2.2(e), or the aggregate
amount of the Loans and Letter of Credit Accommodations exceed the Maximum
Credit, such event shall not limit, waive or otherwise affect any rights of
Agent or Lenders in such circumstances or on any future occasions and Borrowers
shall, upon demand by Agent, which may be made at any time or from time to time,
immediately repay to Agent the entire amount of any such excess(es) for which
payment is demanded.
2.2 Letter of Credit Accommodations.
(a) Subject to and upon the terms and conditions
contained herein, at the request of Administrative Borrower Representative on
behalf of a Borrower, Agent agrees, for the ratable risk of each Lender
according to its Pro Rata Share, to provide or arrange for Letter of Credit
Accommodations for the account of such Borrower containing terms and conditions
reasonably acceptable to Agent and the issuer thereof. Any payments made by or
on behalf of Agent or any Lender to any issuer thereof and/or related parties in
connection with the Letter of Credit Accommodations provided to or for the
benefit of a Borrower shall constitute additional Revolving Loans to Borrowers
pursuant to this Section 2 (or Special Agent Advances as the case may be).
(b) In addition to any charges, fees or expenses charged
by any bank or issuer in connection with the Letter of Credit Accommodations,
Borrowers shall pay to Agent, for the benefit of Lenders, a letter of credit fee
at a rate per annum equal to the Applicable Margin for Letter of Credit
Accommodations, on the daily outstanding balance of the Letter of Credit
Accommodations for the immediately preceding month (or part thereof), payable in
arrears as of the first day of each succeeding month, except that Agent may, and
upon the written direction of Required Lenders shall, require Borrowers to pay
to Agent for the benefit of Lenders such letter of credit fee, at a rate equal
to the Applicable Margin for Letter of Credit Accommodations plus two (2%)
percent per annum on such daily outstanding balance for: (i) the period from and
after the date of termination hereof until Agent and Lenders have received full
and final payment or satisfaction of all Obligations (notwithstanding entry of a
judgment against any Borrower) and (ii) the period from and after the date of
the occurrence of an Event of Default for so long as such Event of Default is
continuing as determined in good faith by Agent. Such letter of credit fee shall
be calculated on the basis of a three hundred sixty (360) day year and actual
days elapsed and the obligation of Borrowers to pay such fee shall survive the
termination of this Agreement.
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(c) The Administrative Borrower Representative shall give
Agent two (2) Business Days' prior written notice of a Borrower's request for
the issuance of a Letter of Credit Accommodation. Such notice shall be
irrevocable and shall specify the original face amount of the Letter of Credit
Accommodation requested, the effective date (which date shall be a Business Day
and in no event shall be a date less than ten (10) days prior to the end of the
then current term of this Agreement) of issuance of such requested Letter of
Credit Accommodation, whether such Letter of Credit Accommodations may be drawn
in a single or in partial draws, the date on which such requested Letter of
Credit Accommodation is to expire (which date shall be a Business Day), the
purpose for which such Letter of Credit Accommodation is to be issued, and the
beneficiary of the requested Letter of Credit Accommodation. The Administrative
Borrower Representative shall attach to such notice the proposed terms of the
Letter of Credit Accommodation.
(d) In addition to being subject to the satisfaction of
the applicable conditions precedent contained in Section 4 hereof and the other
terms and conditions contained herein, no Letter of Credit Accommodations shall
be available unless each of the following conditions precedent have been
satisfied in a manner reasonably satisfactory to Agent: (i) the Administrative
Borrower Representative shall have delivered to the proposed issuer of such
Letter of Credit Accommodation at such times and in such manner as such proposed
issuer may require, an application, in form and substance satisfactory to such
proposed issuer and reasonably satisfactory to Agent, for the issuance of the
Letter of Credit Accommodation and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed Letter of
Credit Accommodation shall be satisfactory to such proposed issuer and
reasonably satisfactory to Agent and such proposed issuer, and (ii) as of the
date of issuance, no order of any court, arbitrator or other Governmental
Authority shall purport by its terms to enjoin or restrain money center banks
generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit Accommodation, and no law, rule or regulation
applicable to money center banks generally and no request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over money center banks generally shall prohibit, or request that
the proposed issuer of such Letter of Credit Accommodation refrain from, the
issuance of letters of credit generally or the issuance of such Letters of
Credit Accommodation; and (iii) the Excess Availability prior to giving effect
to any Reserves with respect to such Letter of Credit Accommodations, on the
date of the proposed issuance of any Letter of Credit Accommodations, shall be
equal to or greater than: (A) if the proposed Letter of Credit Accommodation is
for the purpose of purchasing Eligible Inventory and the documents of title with
respect thereto are consigned to the issuer, the sum of (1) the percentage equal
to one hundred (100%) percent minus the then applicable percentage with respect
to Eligible Inventory set forth in the definition of the term Borrowing Base
multiplied by the Value of such Eligible Inventory, plus (2) freight, taxes,
duty and other amounts which Agent estimates must be paid in connection with
such Inventory upon arrival and for delivery to one of such Borrower's locations
for Eligible Inventory within the United States of America and (B) if the
proposed Letter of Credit Accommodation is for any other purpose or the
documents of title are not consigned to the issuer in connection with a Letter
of Credit Accommodation for the purpose of purchasing Inventory, an amount equal
to one hundred (100%) percent of the face amount thereof and all other
commitments and obligations made or incurred by Agent with
37
respect thereto. Effective on the issuance of each Letter of Credit
Accommodation, a Reserve shall be established in the applicable amount set forth
in Section 2.2(d)(iii)(A) or Section 2.2(d)(iii)(B).
(e) Except in Agent's discretion, with the consent of all
Lenders, the aggregate amount of all outstanding Letter of Credit Accommodations
and all other commitments and obligations made or incurred by Agent or any
Lender in connection therewith shall not at any time exceed $25,000,000.
(f) Borrowers and Guarantors shall indemnify and hold
Agent and Lenders harmless from and against any and all losses, claims, damages,
liabilities, costs and expenses which Agent or any Lender may suffer or incur in
connection with any Letter of Credit Accommodations and any documents, drafts or
acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by any issuer or
correspondent with respect to any Letter of Credit Accommodation, except for
such losses, claims, damages, liabilities, costs or expenses that are a direct
result of the gross negligence or wilful misconduct of Agent or any Lender as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction. As among Borrowers, Agent, Lenders and issuers of Letter of Credit
Accommodations, Borrower and Guarantor assumes all risks with respect to the
acts or omissions of the drawer under or beneficiary of any Letter of Credit
Accommodation and for such purposes the drawer or beneficiary shall be deemed
such Borrower's agent. As among Borrowers, Guarantors, Agents, Lenders and
issuers of Letter of Credit Accommodations, each Borrower and Guarantor assumes
all risks for, and agrees to pay, all foreign, Federal, State and local taxes,
duties and levies relating to any goods subject to any Letter of Credit
Accommodations or any documents, drafts or acceptances thereunder. Each Borrower
and Guarantor hereby releases and holds Agent and Lenders harmless from and
against any acts, waivers, errors, delays or omissions, whether caused by any
Borrower, Guarantor, by any issuer or correspondent or otherwise with respect to
or relating to any Letter of Credit Accommodation, except for the gross
negligence or wilful misconduct of Agent or any Lender as determined pursuant to
a final, non-appealable order of a court of competent jurisdiction. The
provisions of this Section 2.2(f) shall survive the payment of Obligations and
the termination of this Agreement.
(g) In connection with Inventory purchased pursuant to
Letter of Credit Accommodations, Borrowers and Guarantors shall, at Agent's
request, instruct all suppliers, carriers, forwarders, customs brokers,
warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent holds a security interest to deliver them to Agent
and/or subject to Agent's order, and if they shall come into any Borrower's or
Guarantor's possession, to deliver them, upon Agent's request, to Agent in their
original form. Borrowers and Guarantors shall also, at Agent's request,
designate Agent as the consignee on all bills of lading and other negotiable and
non-negotiable documents.
(h) Each Borrower and Guarantor hereby irrevocably
authorizes and directs any issuer of a Letter of Credit Accommodation to name
such Borrower or Guarantor as the account party therein and to deliver to Agent
all instruments, documents and other writings and property
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received by issuer pursuant to the Letter of Credit Accommodations and to accept
and rely upon Agent's instructions and agreements with respect to all matters
arising in connection with the Letter of Credit Accommodations or the
applications therefor. Nothing contained herein shall be deemed or construed to
grant any Borrower or Guarantor any right or authority to pledge the credit of
Agent or any Lender in any manner. Agent and Lenders shall have no liability of
any kind with respect to any Letter of Credit Accommodation provided by an
issuer other than Agent or any Lender unless Agent has duly executed and
delivered to such issuer the application or a guarantee or indemnification in
writing with respect to such Letter of Credit Accommodation. As among Borrowers,
Agent, Lenders and issuers of Letter of Credit Accommodations, Borrowers and
Guarantors shall be bound by any reasonable interpretation made in good faith by
Agent, or any other issuer or correspondent under or in connection with any
Letter of Credit Accommodation or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with
any instructions of any Borrower or Guarantor.
(i) So long as no Event of Default exists or has occurred
and is continuing, a Borrowers may (i) approve or resolve any questions of
non-compliance of documents, (ii) give any instructions as to acceptance or
rejection of any documents or goods, (iii) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, and (iv) with
Agent's consent, grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances, or documents, and agree to
any amendments, renewals, extensions, modifications, changes or cancellations of
any of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral.
(j) At any time an Event of Default exists or has
occurred and is continuing, Agent shall have the right and authority to, and
Borrowers shall not, without the prior written consent of Agent, (i) approve or
resolve any questions of non-compliance of documents, (ii) give any instructions
as to acceptance or rejection of any documents or goods, (iii) execute any and
all applications for steamship or airway guaranties, indemnities or delivery
orders, (iv) grant any extensions of the maturity of, time of payments for, or
time of presentation of, any drafts, acceptances, or documents, and (v) agree to
any amendments, renewals, extensions, modifications, changes or cancellations of
any of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral. Agent may take such actions either in its own
name or in any Borrower's name.
(k) With respect to any Letter of Credit Accommodation,
any rights, remedies, duties or obligations granted or undertaken by any
Borrower or Guarantor to any issuer or correspondent in any application for any
Letter of Credit Accommodation, or any other agreement in favor of any issuer or
correspondent relating to any Letter of Credit Accommodation, shall be deemed to
have been granted or undertaken by such Borrower or Guarantor to Agent for the
ratable benefit of Lenders. With respect to any Letter of Credit Accommodation,
any duties or obligations undertaken by Agent to any issuer or correspondent in
any application for any Letter of Credit Accommodation, or any other agreement
by Agent in favor of any issuer or correspondent to the extent relating to any
Letter of Credit Accommodation, shall be deemed to
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have been undertaken by Borrowers and Guarantors to Agent for the ratable
benefit of Lenders and to apply in all respects to Borrowers and Guarantors.
(l) Immediately upon the issuance or amendment of any
Letter of Credit Accommodation, each Lender shall be deemed to have irrevocably
and unconditionally purchased and received, without recourse or warranty, an
undivided interest and participation to the extent of such Lender's Pro Rata
Share of the liability with respect to such Letter of Credit Accommodation
(including, without limitation, all Obligations with respect thereto).
(m) Each Borrower is irrevocably and unconditionally
obligated, without presentment, demand or protest, to pay to Agent any amounts
paid by Agent to an issuer of a Letter of Credit Accommodation with respect to
such Letter of Credit Accommodation (whether through the borrowing of Loans in
accordance with Section 2.2(a) or otherwise). In the event that any Borrower
fails to pay Agent on the date of any payment under a Letter of Credit
Accommodation in an amount equal to the amount of such payment, Agent (to the
extent it has actual notice thereof) shall promptly notify each Lender of the
unreimbursed amount of such payment and each Lender agrees, upon one (1)
Business Day's notice, to fund to Agent the purchase of its participation in
such Letter of Credit Accommodation in an amount equal to its Pro Rata Share of
the unpaid amount. The obligation of each Lender to deliver to Agent an amount
equal to its respective participation pursuant to the foregoing sentence is
absolute and unconditional and such remittance shall be made notwithstanding the
occurrence or continuance of any Event of Default, the failure to satisfy any
other condition set forth in Section 4 or any other event or circumstance. If
such amount is not made available by a Lender when due, Agent shall be entitled
to recover such amount on demand from such Lender with interest thereon, for
each day from the date such amount was due until the date such amount is paid to
Agent at the interest rate then payable by any Borrower in respect of Loans that
are Prime Rate Loans as set forth in Section 3.1(a) hereof.
2.3 Commitments. The aggregate amount of each Lender's Pro Rata
Share of the Loans and Letter of Credit Accommodations shall not exceed the
amount of such Lender's Commitment, as the same may from time to time be amended
in accordance with the provisions hereof.
SECTION 3. INTEREST AND FEES
3.1 Interest.
(a) Borrowers shall pay to Agent, for the benefit of
Lenders, interest on the outstanding principal amount of the Loans at the
Interest Rate. All interest accruing hereunder on and after the date of any
Event of Default or termination hereof shall be payable on demand.
(b) Administrative Borrower Representative, on behalf of
Borrowers, may from time to time request Eurodollar Rate Loans or may request
that Prime Rate Loans be converted to Eurodollar Rate Loans or that any existing
Eurodollar Rate Loans continue for an additional Interest Period. Such request
from Administrative Borrower Representative shall specify the amount of the
Eurodollar Rate Loans or the amount of the Prime Rate Loans to be converted to
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Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued
(subject to the limits set forth below) and the Interest Period to be applicable
to such Eurodollar Rate Loans. Subject to the terms and conditions contained
herein, three (3) Business Days after receipt by Agent of such a request from
Administrative Borrower Representative, such Eurodollar Rate Loans shall be made
or Prime Rate Loans shall be converted to Eurodollar Rate Loans or such
Eurodollar Rate Loans shall continue, as the case may be, provided, that, (i) no
Default or Event of Default shall exist or have occurred and be continuing, (ii)
no party hereto shall have sent any notice of termination of this Agreement,
Administrative Borrower Representative shall have complied with such customary
procedures as are established by Agent and specified by Agent to Administrative
Borrower Representative from time to time for requests by Borrowers for
Eurodollar Rate Loans, (iii) no more than six (6) Interest Periods may be in
effect at any one time, (iv) the aggregate amount of the Eurodollar Rate Loans
must be in an amount not less than $3,000,000 or an integral multiple of
$100,000 in excess thereof, and (v) Agent and each Lender shall have determined
that the Interest Period or Adjusted Eurodollar Rate is available to Agent and
such Lender and can be readily determined as of the date of the request for such
Eurodollar Rate Loan by such Borrower. Any request by Administrative Borrower
Representative for Eurodollar Rate Loans or to convert Prime Rate Loans to
Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be
irrevocable. Notwithstanding anything to the contrary contained herein, Agent
and Lenders shall not be required to purchase United States Dollar deposits in
the London interbank market or other applicable Eurodollar Rate market to fund
any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as
if Agent and Lenders had purchased such deposits to fund the Eurodollar Rate
Loans.
(c) Any Eurodollar Rate Loans shall automatically convert
to Prime Rate Loans upon the last day of the applicable Interest Period, unless
Agent has received and approved a request to continue such Eurodollar Rate Loan
at least three (3) Business Days prior to such last day in accordance with the
terms hereof. Any Eurodollar Rate Loans shall, at Agent's option, upon notice by
Agent to Administrative Borrower Representative, be subsequently converted to
Prime Rate Loans in the event that this Agreement shall terminate or not be
renewed. Borrowers shall pay to Agent, for the benefit of Lenders, upon demand
by Agent (or Agent may, at its option, charge any loan account of any Borrower)
any amounts required to compensate any Lender or Participant for any loss
(including loss of anticipated profits), cost or expense (other than any loss,
cost or expense in respect of Taxes, the indemnification for which shall be
governed by Sections 6.4(b) and 6.11 hereof) incurred by such person, as a
result of the conversion of Eurodollar Rate Loans to Prime Rate Loans pursuant
to any of the foregoing.
(d) Interest shall be payable by Borrowers to Agent, for
the account of Lenders, monthly in arrears not later than the first day of each
calendar month and shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed. The interest rate on non-contingent
Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an
amount equal to each increase or decrease in the Prime Rate effective on the
first day of the month after any change in such Prime Rate is announced based on
the Prime Rate in effect on the last day of the month in which any such change
occurs. In no event shall charges constituting interest payable by Borrowers to
Agent and Lenders exceed the maximum amount or the rate permitted under any
applicable law or regulation, and if any such part or provision of this
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Agreement is in contravention of any such law or regulation, such part or
provision shall be deemed amended to conform thereto.
3.2 Fees.
(a) Borrowers shall pay to Agent, for the account of
Lenders, monthly an unused line fee at a rate equal to one quarter of one
percent (0.25%) percent per annum calculated upon the amount by which the
Maximum Credit exceeds the average daily principal balance of the outstanding
Revolving Loans and Letter of Credit Accommodations during the immediately
preceding month (or part thereof) while this Agreement is in effect and for so
long thereafter as any of the Obligations are outstanding, which fee shall be
payable on the first day of each month in arrears.
(b) Borrowers agree to pay to Agent the other fees and
amounts set forth in the Fee Letter in the amounts and at the times specified
therein.
3.3 Changes in Laws and Increased Costs of Loans.
(a) If after the date hereof, either (i) any change in,
or in the interpretation of, any law or regulation is introduced, including,
without limitation, with respect to reserve requirements, applicable to Lender
or any banking or financial institution from whom any Lender borrows funds or
obtains credit (a "Funding Bank"), or (ii) a Funding Bank or any Lender complies
with any future guideline or request from any central bank or other Governmental
Authority or (iii) a Funding Bank or any Lender determines in good faith that
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof has or would
have the effect described below, or a Funding Bank or any Lender complies with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, and in
the case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any Lender's capital as a consequence of its obligations hereunder
to a level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Funding Bank's or Lender's
policies with respect to capital adequacy) by an amount deemed in good faith by
such Lender to be material, and the result of any of the foregoing events
described in clauses (i), (ii) or (iii) is or results in an increase in the cost
to any Lender of funding or maintaining the Loans, the Letter of Credit
Accommodations or its Commitment, then Borrowers and Guarantors shall from time
to time upon demand by Agent (accompanied by a certificate of such Lender as to
the amount of such increased costs) pay to Agent additional amounts sufficient
to indemnify Lenders against such increased cost (other than with respect to any
such increased costs relating to Taxes, the indemnification for which shall be
governed by Sections 6.4(b) and 6.11 hereof). A certificate as to the amount of
such increased cost shall be submitted to Administrative Borrower Representative
by Agent and shall be conclusive, absent manifest error.
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(b) If prior to the first day of any Interest Period, (i)
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon Borrowers and Guarantors absent manifest error)
that, by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, (ii) Agent has received notice from the Required Lenders that
the Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to Lenders of making or maintaining
Eurodollar Rate Loans during such Interest Period, or (iii) Dollar deposits in
the principal amounts of the Eurodollar Rate Loans to which such Interest Period
is to be applicable are not generally available in the London interbank market,
Agent shall give telecopy or telephonic notice thereof to Administrative
Borrower Representative as soon as practicable thereafter, and will also give
prompt written notice to Administrative Borrower Representative when such
conditions no longer exist. If such notice is given (A) any Eurodollar Rate
Loans requested to be made on the first day of such Interest Period shall be
made as Prime Rate Loans, (B) any Loans that were to have been converted on the
first day of such Interest Period to or continued as Eurodollar Rate Loans shall
be converted to or continued as Prime Rate Loans and (C) each outstanding
Eurodollar Rate Loan shall be converted, on the last day of the then-current
Interest Period thereof, to Prime Rate Loans. Until such notice has been
withdrawn by Agent, no further Eurodollar Rate Loans shall be made or continued
as such, nor shall any Borrower (or Administrative Borrower Representative on
behalf of any Borrower) have the right to convert Prime Rate Loans to Eurodollar
Rate Loans.
(c) Notwithstanding any other provision herein, if the
adoption of or any change in any law, treaty, rule or regulation or final,
non-appealable determination of an arbitrator or a court or other Governmental
Authority or in the interpretation or application thereof occurring after the
date hereof shall make it unlawful for Agent or any Lender to make or maintain
Eurodollar Rate Loans as contemplated by this Agreement, (i) Agent or such
Lender shall promptly give written notice of such circumstances to
Administrative Borrower Representative (which notice shall be withdrawn whenever
such circumstances no longer exist), (ii) the commitment of such Lender
hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate Loans as such
and convert Prime Rate Loans to Eurodollar Rate Loans shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such Lender
to make or maintain Eurodollar Rate Loans, such Lender shall then have a
commitment only to make a Prime Rate Loan when a Eurodollar Rate Loan is
requested and (iii) such Lender's Loans then outstanding as Eurodollar Rate
Loans, if any, shall be converted automatically to Prime Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Rate Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, Borrowers and Guarantors shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
3.3(d) below.
(d) Borrowers and Guarantors shall indemnify Agent and
each Lender and hold Agent and each Lender harmless from any loss or expense
(other than with respect to Taxes, the indemnification for which shall be
governed by Sections 6.4(b) and 6.11 hereof which Agent or such Lender may
sustain or incur as a consequence of (i) default by Borrower in making a
borrowing of, conversion into or extension of Eurodollar Rate Loans after such
Borrower (or
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Administrative Borrower Representative on behalf of such Borrower) has given a
notice requesting the same in accordance with the provisions of this Loan
Agreement, (ii) default by any Borrower in making any prepayment of a Eurodollar
Rate Loan after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement, and (iii) the making of a prepayment of Eurodollar
Rate Loans on a day which is not the last day of an Interest Period with respect
thereto. With respect to Eurodollar Rate Loans, such indemnification may include
an amount equal to the excess, if any, of (A) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to
borrow, convert or extend to the last day of the applicable Interest Period (or,
in the case of a failure to borrow, convert or extend, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Rate Loans provided for herein over (B) the
amount of interest (as determined by such Agent or such Lender) which would have
accrued to Agent or such Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank Eurodollar market.
This covenant shall survive the termination or non-renewal of this Loan
Agreement and the payment of the Obligations.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Agent and
Lenders making the initial Loans and providing the initial Letter of Credit
Accommodations hereunder:
(a) Agent shall have received a copy of the Confirmation
Order as duly entered by the Bankruptcy Court and entered on the docket of the
Clerk of the Bankruptcy Court in the Chapter 11 Case certified by the Clerk of
the Bankruptcy Court, following due notice to such creditors and other
parties-in-interest as required by the Bankruptcy Court, which order shall
include such provisions with respect to the Credit Facility as are reasonably
satisfactory to Agent and, providing, among other things, that Borrowers shall
be authorized to (i) enter into this Agreement, the other Financing Agreements
and the Term Loan Documents, (ii) grant the liens and security interests and
incur or guaranty the Indebtedness under this Agreement, the other Financing
Agreements and the Term Loan Documents, and (iii) issue, execute and deliver all
documents, agreements and instruments necessary or appropriate to implement and
effectuate all obligations under this Agreement, the other Financing Agreements
and the Term Loan Documents and to take all other actions necessary to implement
and effectuate borrowings under this Agreement, the other Financing Agreements
and the Term Loan Documents. Without limiting the generality of the foregoing,
Agents shall be satisfied (i) with the terms and conditions (including, without
limitation, lien and debt subordination provisions, payment terms, interest
rates, covenants, remedies, defaults and other material terms) of the New Notes
to be issued by Parent; provided, that the New Notes shall (A) have a maturity
date not earlier than 7 years following the effective date of the Chapter 11
Plan, (B) bear non-default interest at a cash-pay rate of interest of not
exceeding 10% per annum, (C) have no amortization due thereunder until the
maturity date thereof, and (D) be secured by third priority liens on
substantially all of the assets of the Borrowers, which liens securing the New
Notes, and the Indebtedness thereunder, shall be subordinated to the Obligations
and the Term Loan Debt pursuant to the
44
New Note Intercreditor Agreement, which shall be in form and substance
satisfactory to Agent and Term Loan Agent in Agent's and Term Loan Agent's sole
but reasonable discretion, and (ii) that the issuance to the holders of the New
Notes of equity interests in the reorganized Borrowers is limited to common
stock, but shall consist of substantially all of such common stock, subject to
stock options with respect to such common stock to be issued to Borrowers'
management pursuant to Borrowers' 2004 Stock Option Plan;
(b) Agent shall have received evidence, satisfactory to
Agent, that prior to the date hereof or concurrently herewith, (i) the Effective
Date shall have occurred, the Confirmation Order shall be valid, subsisting and
continuing as a Final Order and all conditions precedent to the effectiveness of
the Chapter 11 Plan shall have been fulfilled, or validly waived, including,
without limitation, the execution, delivery and performance of all of the
conditions thereof other than conditions that have been validly waived (but not
including conditions consisting of the effectiveness of this Agreement), and
(ii) no motion, action or proceeding shall be pending or filed by any creditor
or other party-in-interest to the Chapter 11 Case which could adversely affect
the Chapter 11 Plan, the consummation of the Chapter 11 Plan, the business or
operations of Borrowers or the transactions contemplated by the Financing
Agreements and the Term Loan Documents, as determined by Agent in good faith;
(c) Agent and Term Loan Agent shall each be reasonably
satisfied with the application of "fresh start" accounting rules to Borrowers
after the Effective Date of the Chapter 11 Plan.
(d) Agent shall have received, in form and substance
satisfactory to Agent, all releases, terminations and such other documents as
Agent may request to evidence and effectuate the termination by the Existing
Lenders of their respective financing arrangements with Borrowers and Guarantors
and the termination and release by Existing Lenders, and by any other Person
holding a security interest or lien that is not permitted by Section 9.8, of any
interest in and to any assets and properties of each Borrower and Guarantor,
duly authorized, executed and delivered by each of them (or by their agent),
including, but not limited to, (i) UCC termination statements for all UCC
financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or Guarantor, as debtor; and
(ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to
secure debt by any Borrower or Guarantor in favor of it or any of them, in form
acceptable for recording with the appropriate Governmental Authority;
(e) all requisite corporate action and proceedings in
connection with this Agreement and the other Financing Agreements shall be
reasonably satisfactory in form and substance to Agent, and Agent shall have
received all information and copies of all documents, including certificates of
incorporation or formation, by-laws, operating agreement or other applicable
governing documents and records of requisite corporate action and proceedings
which Agent may have reasonably requested in connection therewith, such
documents where requested by Agent or its counsel to be certified by appropriate
corporate officers or Governmental Authority (and including a copy of the
certificate of incorporation of each Borrower and Guarantor certified by the
Secretary of State (or equivalent Governmental Authority) which shall set forth
45
the same complete corporate name of such Borrower or Guarantor as is set forth
herein and such document as shall set forth the organizational identification
number of each Borrower or Guarantor, if one is issued in its jurisdiction of
incorporation);
(f) no Material Adverse Effect shall have occurred since
August 25, 2004;
(g) Agent shall have completed a field review of the
Records and such other information with respect to the Collateral as Agent may
require to determine the amount of Loans available to Borrowers (including,
without limitation, current perpetual inventory records and/or roll-forwards of
Accounts and Inventory through the date of closing and test counts of the
Inventory in a manner satisfactory to Agent, together with such supporting
documentation as may be necessary or appropriate, and other documents and
information that will enable Agent to accurately identify and verify the
Collateral), the results of which, in each case, (i) shall have been obtained
not more than seven (7) days prior to the date hereof or within such other
longer time period as Agent shall elect in good faith, and (ii) shall not
reflect any material adverse changes from the results of Agent's latest field
examinations;
(h) Agent shall have received, in form and substance
satisfactory to Agent, all consents, waivers, acknowledgments and other
agreements from third persons which Agent may deem necessary in order to permit,
protect and perfect its security interests in and liens upon the Collateral and
to effectuate the provisions or purposes of this Agreement and the other
Financing Agreements, including, without limitation, Collateral Access
Agreements executed by owners and lessors of leased premises of Borrowers and by
processors, warehouse owners and other bailees at which any Collateral is
located;
(i) the Excess Availability as determined by Agent, as of
the date hereof, shall be not less than $20,000,000 after giving effect to the
initial Loans made or to be made and Letter of Credit Accommodations issued or
to be issued, and all fees and expenses to be paid in connection with the
consummation of the Chapter 11 Plan and the initial transactions hereunder;
(j) Agent shall have received, in form and substance
reasonably satisfactory to Agent, Deposit Account Control Agreements by and
among Agent, each Borrower and Guarantor, as the case may be and each bank where
such Borrower (or Guarantor) has a deposit account (other than as provided in
Section 5.2(d) hereof), in each case, duly authorized, executed and delivered by
such bank and Borrower or Guarantor, as the case may be (or Agent shall be the
bank's customer with respect to such deposit account as Agent may specify);
(k) Agent shall have received evidence, in form and
substance reasonably satisfactory to Agent, that Agent has a valid perfected
first priority security interest in all of the Collateral (excluding motor
vehicles currently owned by Borrowers);
(l) Agent shall have received and reviewed lien and
judgment search results for the jurisdiction of organization of each Borrower
and Guarantor, the jurisdiction of the chief executive office of each Borrower
and Guarantor and all jurisdictions in which assets of Borrowers and Guarantors
are located, which search results shall be in form and substance satisfactory to
Agent;
46
(m) Agent shall have received, in form and substance
satisfactory to Agent, a valid and effective title insurance policy issued by a
company and agent acceptable to Agent: (i) insuring the priority and amount of
the Mortgages, (ii) insuring against matters that would be disclosed by surveys
and (iii) containing any legally available endorsements, assurances or
affirmative coverage reasonably requested by Agent in accordance with its
customary practices for protection of its interests;
(n) Agent shall have received originals of the shares of
the stock certificates representing all of the issued and outstanding shares of
the Capital Stock of each Borrower and Guarantor (other than Parent) and owned
by any Borrower or Guarantor (limited, however, to 65% of issued and outstanding
shares of the Capital Stock of each first-tier subsidiary of Borrowers and
Guarantors that is incorporated outside of the United States of America), in
each case together with stock powers duly executed in blank with respect
thereto;
(o) Agent shall have received evidence of insurance and
loss payee endorsements required hereunder and under the other Financing
Agreements, in form and substance satisfactory to Agent, and certificates of
insurance policies and/or endorsements naming Agent as loss payee;
(p) Agent shall have received, in form and substance
satisfactory to Agent, such opinion letters of counsel to Borrowers and
Guarantors with respect to the Financing Agreements and such other matters as
Agent may reasonably request;
(q) the other Financing Agreements and all instruments
and documents hereunder and thereunder shall have been duly executed and
delivered to Agent, in form and substance reasonably satisfactory to Agent;
(r) Agent and Term Loan Agent shall have entered into and
executed the Term Loan Intercreditor Agreement, in form and substance
satisfactory to Agent;
(s) Agent, Term Loan Agent and the New Notes Trustee
shall have entered into and executed the New Notes Intercreditor Agreement, in
form and substance satisfactory to Agent;
(t) Agent shall have received evidence that Borrowers,
Guarantors, Term Loan Agent and Term Loan Lenders have entered into and executed
the Term Loan Documents, which shall be in form and substance satisfactory to
Agent, all conditions precedent to the effectiveness of the Term Loan Documents
and Term Loan Lenders' obligation to make the Term Loan shall have been
satisfied in full (as determined by Term Loan Agent) or waived, as applicable,
and Term Loan Agent and Term Loan Lenders shall have funded the entire amount of
the Term Loan to Borrowers;
(u) Except as consented to by Agent, the Bankruptcy
Court's retention of jurisdiction under the Confirmation Order shall not govern
the enforcement of the Financing Agreements or the Term Loan Documents or any
rights or remedies related thereto;
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(v) Agent shall have received a reliance letter from ENSR
International, for the benefit of itself and Lenders, in form and substance
reasonably satisfactory to Agent, with respect to the environmental reports
prepared by ENSR International; and
(w) Agent shall have received a reliance letter from each
of Hilco Appraisal Services, LLC and Hilco Real Estate, LLC (collectively,
"Hilco"), for the benefit of itself and Lenders, in form and substance
reasonably satisfactory to Agent, with respect to the Inventory and Real
Property appraisals prepared by Hilco.
4.2 Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
the Loans and/or providing Letter of Credit Accommodations to Borrowers,
including the initial Loans and Letter of Credit Accommodations and any future
Loans and Letter of Credit Accommodations:
(a) all representations and warranties contained herein
and in the other Financing Agreements shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of each such Loan or providing
each such Letter of Credit Accommodation and after giving effect thereto, except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and correct in all material respects accurate on and as of such
earlier date);
(b) no law, regulation, order, judgment or decree of any
Governmental Authority shall exist, and no action, suit, investigation,
litigation or proceeding shall be pending or threatened in any court or before
any arbitrator or Governmental Authority, which (i) purports to enjoin,
prohibit, restrain or otherwise affect (A) the making of the Loans or providing
the Letter of Credit Accommodations, or (B) the consummation of the transactions
contemplated pursuant to the terms hereof or the other Financing Agreements or
(ii) could reasonably be expected to have or has a reasonable likelihood of
having a Material Adverse Effect; and
(c) no Default or Event of Default shall exist or have
occurred and be continuing on and as of the date of the making of such Loan or
providing each such Letter of Credit Accommodation and after giving effect
thereto.
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
5.1 Grant of Security Interest. To secure payment and performance of
all Obligations, each Borrower and Guarantor hereby grants to Agent, for itself
and the benefit of Lenders, a continuing security interest in, a lien upon, and
a right of set off against, and hereby assigns to Agent, for itself and the
benefit of Lenders, as security, all (except as otherwise provided below)
personal and real property and fixtures, and interests in property and fixtures,
of each Borrower and Guarantor, whether now owned or hereafter acquired or
existing, and wherever located (together with all other collateral security for
the Obligations at any time granted to or held or acquired by Agent or any
Lender, collectively, the "Collateral"), including:
(a) all Accounts;
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(b) all general intangibles, including, without
limitation, all Intellectual Property and all intercompany loans and Receivables
owing by any of Borrowers' foreign subsidiaries to any Borrower;
(c) all goods, including, without limitation, Inventory
and Equipment;
(d) all Real Property and fixtures;
(e) all chattel paper, including, without limitation, all
tangible and electronic chattel paper;
(f) all instruments, including, without limitation, all
promissory notes (including, without limitations, any notes evidencing
intercompany loans and Receivables owing by any of Borrowers' foreign
Subsidiaries to Borrowers);
(g) all documents;
(h) all deposit accounts;
(i) all letters of credit, banker's acceptances and
similar instruments and including all letter-of-credit rights;
(j) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Receivables and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of account debtors or
other persons securing the obligations of account debtors;
(k) all (i) investment property (including securities,
whether certificated or uncertificated, securities accounts, security
entitlements, commodity contracts or commodity accounts; limited, however, to
(A) all non-voting, and only 65% of the voting, issued and outstanding shares of
the Capital Stock of each first-tier Subsidiary of Borrowers and Guarantors that
is incorporated or formed outside of the United States of America and (B) 65% of
the issued and outstanding interests in each first tier Subsidiary that is
treated as a disregarded entity for U.S. federal income tax purposes that owns
directly or indirectly any Capital Stock of a "controlled foreign corporation"
(as described in Section 957 of the Code)), and (ii) monies, credit balances,
deposits and other property of any Borrower or Guarantor now or hereafter held
or received by or in transit to Agent, any Lender or its Affiliates or at any
other depository or other institution from or for the account of any Borrower or
Guarantor, whether for safekeeping, pledge, custody, transmission, collection or
otherwise;
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(l) all commercial tort claims, including, without
limitation, those identified in the Information Certificate;
(m) to the extent not otherwise described above, all
Receivables;
(n) all Records; and
(o) all products and proceeds of the foregoing, in any
form, including insurance proceeds and all claims against third parties for loss
or damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral.
Notwithstanding anything to the contrary contained in this Section 5.1, the
foregoing grant of security interest shall not attach to or encompass, and the
Collateral shall not include, any lease, license, contract, property rights,
Intellectual Property or agreement to which any Borrower or Guarantor is a party
or any of its rights or interest thereunder if and for so long as the grant of
such security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Borrower
or Guarantor therein or (ii) in a breach or termination pursuant to the terms
of, or a default under, any such lease, license, contract, property rights, or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity),
provided however that such security interest shall attached immediately at such
time as the condition causing such abandonment, invalidation or unenforceability
shall be remedied and to the extent severable, shall attach immediately to any
portion of such lease, license, contract, property rights, intellectual property
or agreement that does not result in any of the consequences specified in (i) or
(ii) above (such assets and properties being collectively referred to herein as
"Restricted Assets"); provided, that, (a) Agent, for the benefit of itself and
Lenders, shall have a security interest in all proceeds at any time arising from
Restricted Assets and (b) at such time as any Restricted Asset is no long
subject to the contractual or other legal impediment to Borrowers' or
Guarantors' grant of a security interest therein to Agent (a "Non-Restricted
Asset"), then the applicable Borrowers or Guarantors shall be deemed to have
thereupon, without further act by Borrowers, Guarantors, Agent or Lenders,
automatically granted a security interest to Agent in such Non-Restricted Asset
and such Non-Restricted Asset shall thereupon constitute Collateral.
5.2 Perfection of Security Interests.
(a) Each Borrower and Guarantor irrevocably and
unconditionally authorizes Agent (or its agent) to file at any time and from
time to time such financing statements with respect to the Collateral naming
Agent or its designee as the secured party and such Borrower or Guarantor as
debtor, as Agent may require, and including any other information with respect
to such Borrower or Guarantor or otherwise required by part 5 of Article 9 of
the Uniform Commercial Code of such jurisdiction as Agent may reasonably
determine, together with any amendment and continuations with respect thereto,
which authorization shall apply to all financing statements filed on, prior to
or after the date hereof. Each Borrower and Guarantor hereby ratifies and
approves all financing statements naming Agent or its designee as secured party
and such
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Borrower or Guarantor, as the case may be, as debtor with respect to the
Collateral (and any amendments with respect to such financing statements) filed
by or on behalf of Agent prior to the date hereof and ratifies and confirms the
authorization of Agent to file such financing statements (and amendments, if
any). Each Borrower and Guarantor hereby authorizes Agent to adopt on behalf of
such Borrower and Guarantor any symbol required for authenticating any
electronic filing. In the event that the description of the collateral in any
financing statement naming Agent or its designee as the secured party and any
Borrower or Guarantor as debtor includes assets and properties of such Borrower
or Guarantor that do not at any time constitute Collateral, whether hereunder,
under any of the other Financing Agreements or otherwise, the filing of such
financing statement shall nonetheless be deemed authorized by such Borrower or
Guarantor to the extent of the Collateral included in such description and it
shall not render the financing statement ineffective as to any of the Collateral
or otherwise affect the financing statement as it applies to any of the
Collateral. In no event shall any Borrower or Guarantor at any time file, or
permit or cause to be filed, any correction statement or termination statement
with respect to any financing statement (or amendment or continuation with
respect thereto) naming Agent or its designee as secured party and such Borrower
or Guarantor as debtor without Agent's written consent or authorization.
(b) No Borrower and Guarantor has any chattel paper
(whether tangible or electronic) or instruments as of the date hereof, except as
set forth in the Information Certificate. In the event that any Borrower or
Guarantor shall be entitled to or shall receive any chattel paper or instrument
after the date hereof, Borrowers and Guarantors shall promptly notify Agent
thereof in writing. Promptly upon the receipt thereof by or on behalf of any
Borrower or Guarantor (including by any agent or representative), such Borrower
or Guarantor shall deliver, or cause to be delivered to Agent, all tangible
chattel paper and instruments that such Borrower or Guarantor has or may at any
time acquire with a value in excess of $500,000, accompanied by such instruments
of transfer or assignment duly executed in blank as Agent may from time to time
specify, in each case except as Agent may otherwise agree. At Agent's option,
each Borrower and Guarantor shall, or Agent may at any time on behalf of any
Borrower or Guarantor, cause the original of any such instrument or chattel
paper to be conspicuously marked in a form and manner acceptable to Agent with
the following legend referring to chattel paper or instruments as applicable:
"This [chattel paper][instrument] is subject to the security interest of
Congress Financial Corporation (Central), as Agent, and any sale, transfer,
assignment or encumbrance of this [chattel paper][instrument] violates the
rights of such secured party."
(c) In the event that any Borrower or Guarantor shall at
any time hold or acquire an interest in any electronic chattel paper or any
"transferable record" (as such term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction), such Borrower or Guarantor shall promptly notify Agent thereof in
writing. Promptly upon Agent's request, such Borrower or Guarantor shall take,
or cause to be taken, such actions as Agent may request to give Agent control of
such electronic chattel paper under Section 9-105 of the UCC and control of such
transferable record under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as in effect in such jurisdiction.
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(d) No Borrower and Guarantor has any deposit accounts as
of the date hereof, except as set forth in the Information Certificate.
Borrowers and Guarantors shall not, directly or indirectly, after the date
hereof open, establish or maintain any deposit account unless each of the
following conditions is satisfied: (i) the bank where such account is opened or
maintained shall be reasonably acceptable to Agent, (ii) on or before the
opening of such deposit account, such Borrower or Guarantor shall as Agent may
specify deliver to Agent a Deposit Account Control Agreement with respect to
such deposit account duly authorized, executed and delivered by such Borrower or
Guarantor and the bank at which such deposit account is opened and maintained
and (iii) after the occurrence of an Event of Default that is continuing, upon
Agent's request, arrange for Agent to become the customer of the bank with
respect to the deposit account on terms and conditions acceptable to Agent. The
terms of this subsection (d) shall not apply to deposit accounts or funds
specifically and exclusively used for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of any Borrower's or Guarantor's
salaried employees.
(e) No Borrower or Guarantor owns or holds, directly or
indirectly, beneficially or as record owner or both, any investment property, as
of the date hereof, or have any investment account, securities account,
commodity account or other similar account with any bank or other financial
institution or other securities intermediary or commodity intermediary as of the
date hereof, in each case except as set forth in the Information Certificate.
(i) In the event that any Borrower or Guarantor
shall be entitled to or shall at any time after the date hereof hold or acquire
any certificated securities (other than as set forth in Section 5.1), such
Borrower or Guarantor shall promptly endorse, assign and deliver the same to
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as Agent may from time to time specify; provided that in no event shall
any Borrower be required to deliver certificates presenting more than 65% of the
issued and outstanding shares of the Capital Stock of any first-tier Subsidiary
that is incorporated or formed outside the United States of America. If any
securities, now or hereafter acquired by any Borrower or Guarantor are
uncertificated and are issued to such Borrower or Guarantor or its nominee
directly by the issuer thereof, such Borrower or Guarantor shall immediately
notify Agent thereof and shall as Agent may specify, either (A) cause the issuer
to agree to comply with reasonable instructions from Agent as to such
securities, without further consent of any Borrower or Guarantor or such
nominee, or (B) after the occurrence of an Event of Default that is continuing,
upon Agent's request, arrange for Agent to become the registered owner of the
securities.
(ii) Borrowers and Guarantors shall not, directly
or indirectly, after the date hereof open, establish or maintain any investment
account, securities account, commodity account or any other similar account
(other than a deposit account) with any securities intermediary or commodity
intermediary unless each of the following conditions is satisfied: (A) Agent
shall have received not less than five (5) Business Days prior written notice of
the intention of such Borrower or Guarantor to open or establish such account
which notice shall specify in reasonable detail and specificity reasonably
acceptable to Agent the name of the account, the owner of the account, the name
and address of the securities intermediary or commodity intermediary at which
such account is to be opened or established, the individual at
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such intermediary with whom such Borrower or Guarantor is dealing and the
purpose of the account, (B) the securities intermediary or commodity
intermediary (as the case may be) where such account is opened or maintained
shall be reasonably acceptable to Agent, and (C) on or before the opening of
such investment account, securities account or other similar account with a
securities intermediary or commodity intermediary, such Borrower or Guarantor
shall as Agent may specify either (1) execute and deliver, and cause to be
executed and delivered to Agent, an Investment Property Control Agreement with
respect thereto duly authorized, executed and delivered by such Borrower or
Guarantor and such securities intermediary or commodity intermediary or (2)
arrange for Agent to become the entitlement holder with respect to such
investment property on terms and conditions reasonably acceptable to Agent.
(f) Borrowers and Guarantors are not the beneficiary or
otherwise entitled to any right to payment under any letter of credit, banker's
acceptance or similar instrument as of the date hereof, except as set forth in
the Information Certificate. In the event that any Borrower or Guarantor shall
be entitled to or shall receive any right to payment under any letter of credit,
banker's acceptance or any similar instrument with a face amount in excess of
$500,000, whether as beneficiary thereof or otherwise after the date hereof,
such Borrower or Guarantor shall promptly notify Agent thereof in writing. Such
Borrower or Guarantor shall immediately, as Agent may specify, either (i)
deliver, or cause to be delivered to Agent, with respect to any such letter of
credit, banker's acceptance or similar instrument, the written agreement of the
issuer and any other nominated person obligated to make any payment in respect
thereof (including any confirming or negotiating bank), in form and substance
reasonably satisfactory to Agent, consenting to the assignment of the proceeds
of the letter of credit to Agent by such Borrower or Guarantor and agreeing to
make all payments thereon directly to Agent or as Agent may otherwise reasonably
direct or (ii) cause Agent to become, at Borrowers' expense, the transferee
beneficiary of the letter of credit, banker's acceptance or similar instrument
(as the case may be).
(g) Borrowers and Guarantors do not have any commercial
tort claims with a claim amount in excess of $500,000 as of the date hereof,
except as set forth in the Information Certificate. In the event that any
Borrower or Guarantor shall at any time after the date hereof have any
commercial tort claims with a claim amount in excess of $500,000, such Borrower
or Guarantor shall promptly notify Agent thereof in writing, which notice shall
(i) set forth in reasonable detail the basis for and nature of such commercial
tort claim and (ii) include the express grant by such Borrower or Guarantor to
Agent of a security interest in such commercial tort claim (and the proceeds
thereof). In the event that such notice does not include such grant of a
security interest, the sending thereof by such Borrower or Guarantor to Agent
shall be deemed to constitute such grant to Agent. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the
Collateral and shall be deemed included therein. Without limiting the
authorization of Agent provided in Section 5.2(a) hereof or otherwise arising by
the execution by such Borrower or Guarantor of this Agreement or any of the
other Financing Agreements, Agent is hereby irrevocably authorized from time to
time and at any time to file such financing statements naming Agent or its
designee as secured party and such Borrower or Guarantor as debtor, or any
amendments to any financing statements, covering any such commercial tort claim
as Collateral. In addition, each Borrower and Guarantor shall promptly upon
Agent's reasonable request, execute and deliver, or cause to be executed and
53
delivered, to Agent such other agreements, documents and instruments as Agent
may reasonably require in connection with such commercial tort claim.
(h) Borrowers and Guarantors do not have any goods,
documents of title or other Collateral with a value in excess of $500,000,
individually for any such item of Collateral, or $1,000,000 in the aggregate for
all such items of Collateral, collectively, in the custody, control or
possession of a third party as of the date hereof, except as set forth in the
Information Certificate and except for goods located in the United States in
transit to a location of a Borrower or Guarantor permitted herein in the
ordinary course of business of such Borrower or Guarantor in the possession of
the carrier transporting such goods or equipment out for repair. In the event
that any goods, documents of title or other Collateral are at any time after the
date hereof in the custody, control or possession of any other person not
referred to in the Information Certificate or such carriers, Borrowers and
Guarantors shall promptly notify Agent thereof in writing. Promptly upon Agent's
reasonable request, Borrowers and Guarantors shall deliver to Agent a Collateral
Access Agreement duly authorized, executed and delivered by such person and the
Borrower or Guarantor that is the owner of such Collateral.
(i) Borrowers and Guarantors shall take any other actions
reasonably requested by Agent from time to time to cause the attachment,
perfection and first priority of, and the ability of Agent to enforce, the
security interest of Agent in any and all of the Collateral, including, without
limitation, (i) executing, delivering and, where appropriate, filing financing
statements and amendments relating thereto under the UCC or other applicable
law, to the extent, if any, that any Borrower's or Guarantor's signature thereon
is required therefor, (ii) causing Agent's name to be noted as secured party on
any certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of Agent to enforce, the
security interest of Agent in such Collateral, (iii) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, the security interest
of Agent in such Collateral, (iv) obtaining the consents and approvals of any
material Governmental Authority or third party, including, without limitation,
any consent of any licensor, lessor or other person obligated on Collateral, and
taking all reasonable actions required by any earlier versions of the UCC or by
other law, as applicable in any relevant jurisdiction; provided, however, that
Agent shall not require Borrowers and Guarantors to comply with this Section
5.2(i) with respect to any Collateral if the cost associated with either
obtaining a security interest therein or Agent's perfection thereof is excessive
in relation to the value of such Collateral, as determined by Agent in good
faith.
SECTION 6. COLLECTION AND ADMINISTRATION
6.1 Borrowers' Loan Accounts. Agent shall maintain one or more
loan account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of any Borrower or Guarantor and (c) all other appropriate
debits and credits as provided in this Agreement, including fees, charges,
costs, expenses and interest. All entries in the loan account(s) shall be made
in accordance with Agent's customary practices as in effect from time to time.
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6.2 Statements. Agent shall render to Administrative Borrower
Representative each month a statement setting forth the balance in the
Borrowers' loan account(s) maintained by Agent for Borrowers pursuant to the
provisions of this Agreement, including principal, interest, fees, costs and
expenses. Each such statement shall be subject to subsequent adjustment by Agent
but shall, absent manifest errors or omissions, be considered correct and deemed
accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and
Guarantors as an account stated except to the extent that Agent receives a
written notice from Administrative Borrower Representative of any specific
exceptions of Administrative Borrower Representative thereto within thirty (30)
days after the date such statement has been received by Administrative Borrower
Representative. Until such time as Agent shall have rendered to Administrative
Borrower Representative a written statement as provided above, the balance in
any Borrower's loan account(s) shall be presumptive evidence of the amounts due
and owing to Agent and Lenders by Borrowers and Guarantors.
6.3 Collection of Accounts.
(a) Borrowers and Guarantors will promptly deposit and
shall direct their respective account debtors to directly remit all payments of
Receivables and all payments constituting proceeds of Inventory or other
Collateral in the identical form in which such payments are made into lockboxes
and related accounts or other accounts in which Agent has a perfected security
interest and that are subject to a duly executed and delivered Deposit Account
Control Agreement (each a "Blocked Account"). Upon the occurrence and during the
continuance of a Trigger Event, Agent may deliver a Control Notice to the
depository bank at which the Blocked Account is maintained and Agent shall, at
the request of Administrative Borrower Representative, rescind such Control
Notice at such time that a Trigger Event does not exist for a period of not less
than sixty (60) consecutive days. Each Borrower and Guarantor agrees that, from
and after the date on which Agent shall have delivered a Control Notice to the
depository bank(s) at which the Blocked Accounts are located and, until such
time, if any, as such Control Notice is rescinded by Agent in accordance with
the immediately preceding sentence, all payments made to such Blocked Accounts
or other funds received and collected by Agent or any Lender, whether in respect
of the Receivables, as proceeds of Inventory or other Collateral or otherwise
shall be treated as payments to Agent and Lenders in respect of the Obligations
and therefore shall constitute the property of Agent and Lenders to the extent
of the then outstanding Obligations. Notwithstanding anything to the contrary
contained herein, Agent agrees not to deliver a Control Notice with respect to
any Controlled Disbursement Account designated on Schedule 8.10 of the
Information Certificate or with respect to any other account which has been
established by Borrowers solely to pay, or specifically designated to
exclusively receive, any Trust Funds (as defined below). As between Agent and
Borrowers, on a monthly basis prior to a Trigger Event and on a weekly basis
after and during the continuance of a Trigger Event, Borrowers shall send
written notice to Agent of the type and amount of any Trust Funds contained or
held in the Blocked Accounts which have been remitted to Agent (the "Designated
Funds"), together with evidence reasonably satisfactory to Agent (i) that Trust
Funds have been deposited into the Blocked Accounts and have actually been
received by Agent (the "Designated Funds"), and (ii) as to the type and amount
of such Trust Funds. Upon receipt of such notice, Agent agrees, upon the written
request of Borrowers, to make an advance to Borrowers under
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Section 2.1 hereof in an amount equal to the Designated Funds for payment by
Borrowers to the appropriate Person(s). For the purposes of this paragraph,
"Trust Funds" means all funds held by Borrowers, as a fiduciary, all taxes
required to be collected or withheld (including, without limitation, federal and
state withholding taxes (including the employer's share thereof), taxes owing to
any Governmental Authority, sales, use and excise taxes, customs duties and
import duties).
(b) For purposes of calculating the amount of the Loans
available to each Borrower, payments will be applied (conditional upon final
collection) to the Obligations on the Business Day of receipt by Agent of
immediately available funds in the Agent Payment Account provided such payments
and notice thereof are received in accordance with Agent's usual and customary
practices as in effect from time to time and within sufficient time to credit
such Borrower's loan account on such day, and if not, then on the next Business
Day. For the purposes of calculating interest on the Obligations, such payments
or other funds received will be applied (conditional upon final collection) to
the Obligations one (1) Business Day following the date of receipt of
immediately available funds by Agent in the Agent Payment Account provided such
payments or other funds and notice thereof are received in accordance with
Agent's usual and customary practices as in effect from time to time and within
sufficient time to credit such Borrower's loan account on such day, and if not,
then on the next Business Day. The economic benefit of the timing in the
application of payments shall be for the sole benefit of Agent.
(c) Except as otherwise permitted hereunder, each
Borrower and Guarantor and their respective employees, agents and Subsidiaries
or other Affiliates shall, acting as trustee for Agent, receive, as the property
of Agent, any monies, checks, notes, drafts or any other payment relating to
and/or proceeds of Accounts or other Collateral which come into their possession
or under their control and immediately upon receipt thereof, shall deposit or
cause the same to be deposited in the Blocked Accounts, or remit the same or
cause the same to be remitted, in kind, to Agent. In no event shall the same be
commingled with any Borrower's or Guarantor's own funds unless deposited in a
Blocked Account. Borrowers agree to reimburse Agent on demand for any amounts
owed or paid to any bank or other financial institution at which a Blocked
Account or any other deposit account or investment account is established or any
other bank, financial institution or other person involved in the transfer of
funds to or from the Blocked Accounts arising out of Agent's payments to or
indemnification of such bank, financial institution or other person. The
obligations of Borrowers to reimburse Agent for such amounts pursuant to this
Section 6.3 shall survive the termination of this Agreement.
6.4 Payments; Mandatory Prepayments; Reductions in Maximum Credit
and Commitments.
(a) All Obligations shall be payable to the Agent Payment
Account as provided in Section 6.3 or such other place as Agent may designate in
writing to Administrative Borrower Representative from time to time. Subject to
the other terms and conditions contained herein and except as may otherwise be
provided for in the Term Loan Intercreditor Agreement, Agent shall apply
payments received or collected from any Borrower or Guarantor or for the account
of any Borrower or Guarantor (including the monetary proceeds of collections or
of realization upon
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any Collateral) as follows: first, to pay any fees, indemnities or expense
reimbursements then due to Agent and Lenders from any Borrower or Guarantor;
second, to pay interest due in respect of any Loans (and including any Special
Agent Advances); third, to pay or prepay principal in respect of Special Agent
Advances; fourth, to pay or prepay principal in respect of the Revolving Loans
and to pay other Obligations then due arising under or pursuant to any Hedge
Agreements of a Borrower or Guarantor with an Affiliate of Agent or other
financial institution acceptable to Agent (which approval may be withheld in the
determination of Agent) up to the amount of any then effective Hedging Reserve
established in respect of such Obligations, on a pro rata basis; and fifth, to
pay or prepay any other Obligations whether or not then due, in such order and
manner as Agent determines or to be held as cash collateral in connection with
any Letter of Credit Accommodations or other contingent Obligations (but not
including for this purpose any Obligations arising under or pursuant to any
Hedge Agreements). Notwithstanding anything to the contrary contained in this
Agreement, (i) unless so directed by Administrative Borrower Representative, or
unless a Default or an Event of Default shall exist or have occurred and be
continuing, Agent shall not apply any payments which it receives to any
Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period
applicable to any such Eurodollar Rate Loans or (B) in the event that there are
no outstanding Prime Rate Loans and (ii) to the extent any Borrower uses any
proceeds of the Loans or Letter of Credit Accommodations to acquire rights in or
the use of any Collateral or to repay any Indebtedness used to acquire rights in
or the use of any Collateral, payments in respect of the Obligations shall be
deemed applied first to the Obligations arising from Loans and Letter of Credit
Accommodations that were not used for such purposes and second to the
Obligations arising from Loans and Letter of Credit Accommodations the proceeds
of which were used to acquire rights in or the use of any Collateral in the
chronological order in which such Borrower acquired such rights in or the use of
such Collateral.
(b) At Agent's option, all principal, interest, fees,
costs, expenses and other charges provided for in this Agreement or the other
Financing Agreements may be charged directly to the loan account(s) of any
Borrower maintained by Agent, except as provided in Section 6.11 hereof.
Borrowers and Guarantors shall make all payments to Agent and Lenders on the
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,
fees, deductions, withholding, restrictions or conditions of any kind. If after
receipt of any payment of, or proceeds of Collateral applied to the payment of,
any of the Obligations, Agent or any Lender is required to surrender or return
such payment or proceeds to any Person for any reason, then the Obligations
intended to be satisfied by such payment or proceeds shall be reinstated and
continue and this Agreement shall continue in full force and effect as if such
payment or proceeds had not been received by Agent or such Lender. Except as
provided in Section 6.11 hereof, Borrowers and Guarantors shall be liable to pay
to Agent, and do hereby indemnify and hold Agent and Lenders harmless for the
amount of any payments or proceeds surrendered or returned. This Section 6.4(b)
shall remain effective notwithstanding any contrary action which may be taken by
Agent or any Lender in reliance upon such payment or proceeds. This Section 6.4
shall survive the payment of the Obligations and the termination of this
Agreement.
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(c) (i) With respect to the Net Cash Proceeds of Asset
Sales:
(A) The Net Cash Proceeds of any Asset
Sale permitted hereunder shall be remitted to Agent for application to the
Obligations in accordance with Section 6.4(a) in an amount equal to the amount
that will result in both the Average Thirty Day Excess Availability and the
Excess Availability exceeding $20,000,000 immediately after giving effect to the
consummation of such Asset Sale. To the extent such Net Cash Proceeds of an
Asset Sale are not required to be used in accordance with the immediately
preceding sentence, then such Net Cash Proceeds may, at Administrative Borrower
Representative's option, be used to (1) provided no Event of Default has
occurred and is continuing, pay the Term Loan, or (2) provided no Event of
Default has occurred and is continuing, redeem, retire, defease, purchase,
discharge or otherwise reduce Indebtedness outstanding under the New Notes, or
(3) provided no Event of Default has occurred and is continuing, acquire assets
used or useful to the business of the Borrowers and their Subsidiaries or enter
into a binding commitment to do so within one year of receipt of such Net Cash
Proceeds in an aggregate amount not to exceed $2,500,000 for all such asset
acquisitions in any twelve (12) month period following the date of this
Agreement.
(B) To the extent such Net Cash
Proceeds of any Asset Sale are not used in accordance with subsection (c)(i)(A),
such Net Cash Proceeds shall be paid to Agent for application to the Obligations
without reduction of the Maximum Credit or the aggregate amount of Commitments.
(C) Notwithstanding anything to the
contrary contained in this subsection (c)(i), Net Cash Proceeds from the sale of
the Reel Sale Division shall be applied first to reduce the outstanding
Supplemental Availability and thereafter, provided no Trigger Event is
continuing, any remaining proceeds shall in all events be applied (subject to
subsections (c)(i)(A) and (c)(i)(B) immediately above) to payment of the Term
Loan or the New Notes or, if required by subsection (c)(i)(A) or (c)(i)(B),
shall be remitted to Agent for application to the Obligations in accordance with
the terms hereof; and
(D) provided no Trigger Event is
continuing, Net Cash Proceeds from the Specified Sale, at Administrative
Borrower Representative's option, may be applied (subject to subsections
(c)(i)(A) and (c)(i)(B) immediately above) to payment of the Term Loan or the
New Notes or, if required by subsection (c)(i)(A) and (c)(i)(B), shall be
remitted to Agent for application to the Obligations in accordance with the
terms hereof. Nothing contained in this subsection (c)(i) shall permit or be
deemed to constitute the consent of Agent or any Lender to any Asset Sale
otherwise prohibited by the terms and conditions of this Agreement.
(ii) The Net Cash Proceeds of any Extraordinary
Receipts may, at Administrative Borrower Representative's option, be used to (A)
provided no Event of Default has occurred and is continuing, pay the Term Loan
or (B) provided a Trigger Event is not continuing, redeem, retire, defease,
purchase, discharge or otherwise reduce Indebtedness outstanding under the New
Notes or (C) provided no Event of Default has occurred and is continuing,
acquire assets used or useful to the business of the Borrowers and their
Subsidiaries or enter into a binding commitment to do so within one year of
receipt of such Net Cash
58
Proceeds in an aggregate amount not to exceed $2,500,000 for all such asset
acquisitions in any twelve (12) month period following the date of this
Agreement. To the extent such Net Cash Proceeds are not used in accordance with
the immediately preceding sentence, such Net Cash Proceeds shall be paid to
Agent for application to the Obligations without reduction of the Maximum Credit
or the aggregate amount of Commitments. Nothing contained in this subsection
(c)(ii) shall permit or be deemed to constitute the consent of Agent or any
Lender to any Asset Sale otherwise prohibited by the terms and conditions of
this Agreement.
(d) The Net Cash Proceeds of any Debt Issuance permitted
hereunder (i) may, at Administrative Borrower Representative's option, be used
to (A) so long as no Event of Default exists and is continuing, repay the Term
Loan, (B) so long as no Event of Default exists and is continuing, repay redeem,
retire, defease, purchase, defease, discharge or otherwise reduce Indebtedness
outstanding under the New Notes or (C) fund Permitted Acquisitions and
investments permitted under and in accordance with Section 9.10(n) and (ii) to
the extent not so used, shall be paid to Agent for application to the
Obligations without reduction of the Maximum Amount or the aggregate amount of
Commitments.
(e) The Net Cash Proceeds of any Equity Issuance
permitted hereunder may, at Administrative Borrower Representative's option, be
used (i) so long as no Event of Default exists and is continuing, to repay or
otherwise reduce Indebtedness outstanding under the Term Loans, (ii) so long as
no Event of Default exists and is continuing, to repay redeem, retire, defease,
purchase, defease, discharge or otherwise reduce Indebtedness outstanding under
the New Notes, and (iii) for any other general corporate purpose not prohibited
by this Agreement and, in the case of this subsection (e)(iii), such Net Cash
Proceeds shall not be required to be paid to Agent for application to the
Obligations.
(f) Borrowers may at any time, on at least 5 days' prior
written notice from Borrower Representative to Agent, permanently reduce the
Commitments and the Maximum Credit; provided that (i) any such reductions shall
be in a minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of such amount, (ii) the Commitments and Maximum Credit shall not be
reduced by more than $10,000,000 in any twelve (12) - month period following the
date of this Agreement, (iii) after giving effect to each such reduction,
Borrowers shall comply with Section 2.1(c) and (iv) any termination of the
Commitments in full shall be subject to Section 13.1. Any voluntary reduction of
the Commitments and Maximum Credit must be accompanied by payment of the fee
required by Section 13.1 (if any), plus the payment of any Eurodollar Rate Loan
funding breakage costs. Upon any such reduction of the Commitments and Maximum
Credit, Borrowers' right to request Revolving Loans, or request that Letter of
Credit Accommodations be incurred on its behalf, shall simultaneously be
permanently reduced; provided that a permanent reduction of the Commitments and
Maximum Credit shall not require a corresponding pro rata reduction in the
sublimit for Letter of Credit Accommodations set forth in Section 2.2(e).
6.5 Authorization to Make Loans. Agent and Lenders are authorized
to make the Loans and provide the Letter of Credit Accommodations based upon
telephonic or other written instructions received from anyone purporting to be
an officer of Administrative Borrower
59
Representative or other authorized person or, at the discretion of Agent, if
such Loans are necessary to satisfy any Obligations. All requests for Loans or
Letter of Credit Accommodations hereunder shall specify the date on which the
requested advance is to be made or Letter of Credit Accommodations established
(which day shall be a Business Day) and the amount of the requested Loan.
Requests received after 12:00 p.m. Chicago time on any day shall be deemed to
have been made as of the opening of business on the immediately following
Business Day. All Loans and Letter of Credit Accommodations under this Agreement
shall be conclusively presumed to have been made to, and at the request of and
for the benefit of, any Borrower or Guarantor when deposited to the credit of
any Borrower or Guarantor or otherwise disbursed or established in accordance
with the instructions of any Borrower or Guarantor or in accordance with the
terms and conditions of this Agreement.
6.6 Use of Proceeds. Borrowers shall use the initial proceeds of
the Loans provided on or about the date hereof by Agent to Borrowers hereunder
only as follows: (a) to fund payments required in order to substantially
consummate the Chapter 11 Plan, (b) pay fees and expenses associated with the
Chapter 11 Plan, (c) for payments to each of the persons listed in the
disbursement direction letter furnished by Borrowers to Agent on or about the
date hereof and (d) for costs, expenses and fees in connection with the
preparation, negotiation, execution and delivery of this Agreement and the other
Financing Agreements. All other Loans made or Letter of Credit Accommodations
provided to or for the benefit of any Borrower pursuant to the provisions hereof
shall be used by such Borrower only for general operating, working capital and
other proper corporate purposes of such Borrower not otherwise prohibited by the
terms hereof. None of the proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which would cause any of
the Loans to be considered a "purpose credit" within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System, as amended.
6.7 Appointment of Administrative Borrower Representative as Agent
for Requesting Loans and Receipts of Loans and Statements.
(a) Each Borrower hereby irrevocably appoints and
constitutes Administrative Borrower Representative as its agent to request and
receive Loans and Letter of Credit Accommodations pursuant to this Agreement and
the other Financing Agreements from Agent or any Lender in the name or on behalf
of such Borrower. Agent and Lenders may disburse the Loans to such bank account
of Administrative Borrower Representative or a Borrower or otherwise make such
Loans to a Borrower and provide such Letter of Credit Accommodations to a
Borrower as Administrative Borrower Representative may designate or direct,
without notice to any other Borrower or Obligor. Notwithstanding anything to the
contrary contained herein, Agent may at any time and from time to time require
that Loans to or for the account of any Borrower be disbursed directly to an
operating account of such Borrower.
(b) Administrative Borrower Representative hereby accepts
the appointment by Borrowers to act as the agent of Borrowers pursuant to this
Section 6.7. Administrative Borrower Representative shall ensure that the
disbursement of any Loans to each Borrower, or the issuance
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of any Letter of Credit Accommodations for a Borrower hereunder, shall be paid
or issued to or for the account of such Borrower.
(c) Each Borrower and other Guarantor hereby irrevocably
appoints and constitutes Administrative Borrower Representative as its agent to
receive statements on account and all other notices from Agent and Lenders with
respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Agreements.
(d) Any notice, election, representation, warranty,
agreement or undertaking by or on behalf of any other Borrower or any Guarantor
by Administrative Borrower Representative shall be deemed for all purposes to
have been made by such Borrower or Guarantor, as the case may be, and shall be
binding upon and enforceable against such Borrower or Guarantor to the same
extent as if made directly by such Borrower of Guarantor.
(e) No purported termination of the appointment of
Administrative Borrower Representative as agent as aforesaid shall be effective,
except after ten (10) days' prior written notice to Agent.
6.8 Pro Rata Treatment. Except to the extent otherwise provided in
this Agreement: (a) the making and conversion of Loans shall be made among the
Lenders based on their respective Pro Rata Shares as to the Loans and (b) each
payment on account of any Obligations to or for the account of one or more of
Lenders in respect of any Obligations due on a particular day shall be allocated
among the Lenders entitled to such payments based on their respective Pro Rata
Shares and shall be distributed accordingly.
6.9 Sharing of Payments, Etc.
(a) Each Borrower and Guarantor agrees that, in addition
to (and without limitation of) any right of setoff, banker's lien or
counterclaim Agent or any Lender may otherwise have, each Lender shall be
entitled, upon the occurrence and during the continuance of an Event of Default,
at its option (but subject, as among Agent and Lenders, to the provisions of
Section 12.3(b) hereof), to offset balances held by it for the account of such
Borrower or Guarantor at any of its offices, in dollars or in any other
currency, against any principal of or interest on any Loans owed to such Lender
or any other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to such Borrower or
Guarantor), in which case it shall promptly notify Administrative Borrower
Representative and Agent thereof; provided, that, such Lender's failure to give
such notice shall not affect the validity thereof.
(b) If any Lender (including Agent) shall obtain from any
Borrower or Guarantor payment of any principal of or interest on any Loan owing
to it or payment of any other amount under this Agreement or any of the other
Financing Agreements through the exercise of any right of setoff, banker's lien
or counterclaim or similar right or otherwise (other than from Agent as provided
herein), and, as a result of such payment, such Lender shall have received more
than its Pro Rata Share of the principal of the Loans or more than its share of
such other amounts then due hereunder or thereunder by any Borrower or Guarantor
to such Lender than the percentage
61
thereof received by any other Lender, it shall promptly pay to Agent, for the
benefit of Lenders, the amount of such excess and simultaneously purchase from
such other Lenders a participation in the Loans or such other amounts,
respectively, owing to such other Lenders (or such interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all Lenders shall share the benefit of
such excess payment (net of any reasonable expenses that may be incurred by such
Lender in obtaining or preserving such excess payment) in accordance with their
respective Pro Rata Shares or as otherwise agreed by Lenders. To such end all
Lenders shall make appropriate adjustments among themselves (by the resale of
participation sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(c) Each Borrower and Guarantor agrees that any Lender
purchasing a participation (or direct interest) as provided in this Section may
exercise, in a manner consistent with this Section, all rights of setoff,
banker's lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or other amounts (as
the case may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to
exercise any right of setoff, banker's lien, counterclaims or similar rights or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other Indebtedness or obligation
of any Borrower or Guarantor. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section applies, such Lender shall, to the extent practicable, assign
such rights to Agent for the benefit of Lenders and, in any event, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of Lenders entitled under this Section to share in the benefits of any recovery
on such secured claim.
6.10 Settlement Procedures.
(a) In order to administer the Credit Facility in an
efficient manner and to minimize the transfer of funds between Agent and
Lenders, Agent may, at its option, subject to the terms of this Section, make
available, on behalf of Lenders, the full amount of the Loans requested or
charged to any Borrower's loan account(s) or otherwise to be advanced by Lenders
pursuant to the terms hereof, without requirement of prior notice to Lenders of
the proposed Loans.
(b) With respect to all Loans made by Agent on behalf of
Lenders as provided in this Section, the amount of each Lender's Pro Rata Share
of the outstanding Loans shall be computed weekly, and shall be adjusted upward
or downward on the basis of the amount of the outstanding Loans as of 5:00 p.m.
Chicago time on the Business Day immediately preceding the date of each
settlement computation; provided, that, Agent retains the absolute right at any
time or from time to time to make the above described adjustments at intervals
more frequent than weekly, but in no event more than twice in any week. Agent
shall deliver to each of the Lenders after the end of each week, or at such
lesser period or periods as Agent shall determine, a summary statement of the
amount of outstanding Loans for such period (such week or lesser period or
periods being hereinafter referred to as a "Settlement Period"). If the summary
62
statement is sent by Agent and received by a Lender prior to 12:00 p.m. Chicago
time, then such Lender shall make the settlement transfer described in this
Section by no later than 3:00 p.m. Chicago time on the same Business Day and if
received by a Lender after 12:00 p.m. Chicago time, then such Lender shall make
the settlement transfer by not later than 3:00 p.m. Chicago time on the next
Business Day following the date of receipt. If, as of the end of any Settlement
Period, the amount of a Lender's Pro Rata Share of the outstanding Loans is more
than such Lender's Pro Rata Share of the outstanding Loans as of the end of the
previous Settlement Period, then such Lender shall forthwith (but in no event
later than the time set forth in the preceding sentence) transfer to Agent by
wire transfer in immediately available funds the amount of the increase.
Alternatively, if the amount of a Lender's Pro Rata Share of the outstanding
Loans in any Settlement Period is less than the amount of such Lender's Pro Rata
Share of the outstanding Loans for the previous Settlement Period, Agent shall
forthwith transfer to such Lender by wire transfer in immediately available
funds the amount of the decrease. The obligation of each of the Lenders to
transfer such funds and effect such settlement shall be irrevocable and
unconditional and without recourse to or warranty by Agent. Agent and each
Lender agrees to ▇▇▇▇ its books and records at the end of each Settlement Period
to show at all times the dollar amount of its Pro Rata Share of the outstanding
Loans and Letter of Credit Accommodations. Each Lender shall only be entitled to
receive interest on its Pro Rata Share of the Loans to the extent such Loans
have been funded by such Lender. Because the Agent on behalf of Lenders may be
advancing and/or may be repaid Loans prior to the time when Lenders will
actually advance and/or be repaid such Loans, interest with respect to Loans
shall be allocated by Agent in accordance with the amount of Loans actually
advanced by and repaid to each Lender and the Agent and shall accrue from and
including the date such Loans are so advanced to but excluding the date such
Loans are either repaid by Borrowers or actually settled with the applicable
Lender as described in this Section.
(c) To the extent that Agent has made any such amounts
available and the settlement described above shall not yet have occurred, upon
repayment of any Loans by a Borrower, Agent may apply such amounts repaid
directly to any amounts made available by Agent pursuant to this Section. In
lieu of weekly or more frequent settlements, Agent may, at its option, at any
time require each Lender to provide Agent with immediately available funds
representing its Pro Rata Share of each Loan, prior to Agent's disbursement of
such Loan to Borrower. In such event, all Loans under this Agreement shall be
made by the Lenders simultaneously and proportionately to their Pro Rata Shares.
No Lender shall be responsible for any default by any other Lender in the other
Lender's obligation to make a Loan requested hereunder nor shall the Commitment
of any Lender be increased or decreased as a result of the default by any other
Lender in the other Lender's obligation to make a Loan hereunder.
(d) If Agent is not funding a particular Loan to a
Borrower (or Administrative Borrower Representative for the benefit of such
Borrower) pursuant to Sections 6.10(a) and 6.10(b) above on any day, but is
requiring each Lender to provide Agent with immediately available funds on the
date of such Loan as provided in Section 6.10(c) above, Agent may assume that
each Lender will make available to Agent such Lender's Pro Rata Share of the
Loan requested or otherwise made on such day and Agent may, in its discretion,
but shall not be obligated to, cause a corresponding amount to be made available
to or for the benefit of such
63
Borrower on such day. If Agent makes such corresponding amount available to a
Borrower and such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon for each day from the
date such payment was due until the date such amount is paid to Agent at the
Federal Funds Rate for each day during such period (as published by the Federal
Reserve Bank of New York or at Agent's option based on the arithmetic mean
determined by Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that day by each of
the three leading brokers of Federal funds transactions in New York City
selected by Agent) and if such amounts are not paid within three (3) days of
Agent's demand, at the highest Interest Rate provided for in Section 3.1 hereof
applicable to Prime Rate Loans. During the period in which such Lender has not
paid such corresponding amount to Agent, notwithstanding anything to the
contrary contained in this Agreement or any of the other Financing Agreements,
the amount so advanced by Agent to or for the benefit of any Borrower shall, for
all purposes hereof, be a Loan made by Agent for its own account. Upon any such
failure by a Lender to pay Agent within three (3) days of Agent's demand, Agent
shall promptly thereafter notify Administrative Borrower Representative of such
failure and Borrowers shall pay such corresponding amount to Agent for its own
account within five (5) Business Days of Administrative Borrower
Representative's receipt of such notice. A Lender who fails to pay Agent its Pro
Rata Share of any Loans made available by the Agent on such Lender's behalf, or
any Lender who fails to pay any other amount owing by it to Agent, is a
"Defaulting Lender". Agent shall not be obligated to transfer to a Defaulting
Lender any payments received by Agent for the Defaulting Lender's benefit, nor
shall a Defaulting Lender be entitled to the sharing of any payments hereunder
(including any principal, interest or fees). Amounts payable to a Defaulting
Lender shall instead be paid to or retained by Agent. Agent may hold and, in its
discretion, relend to a Borrower the amount of all such payments received or
retained by it for the account of such Defaulting Lender. For purposes of a
determination of Required Lenders, voting or consenting to matters with respect
to this Agreement and the other Financing Agreements and determining Pro Rata
Shares, such Defaulting Lender shall be deemed not to be a "Lender" and such
Defaulting Lender's Commitment and Obligations owing to such Defaulting Lender
shall be deemed to be zero (0). This Section shall remain effective with respect
to a Defaulting Lender until such default is cured. The operation of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by any Borrower or Obligor of
their duties and obligations hereunder.
(e) Nothing in this Section or elsewhere in this
Agreement or the other Financing Agreements shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
any Borrower may have against any Lender as a result of any default by any
Lender hereunder in fulfilling its Commitment.
6.11 Taxes.
(a) Except as provided in Section 6.11(e), any and all
payments by or on behalf of a Borrower hereunder or under any other Financing
Agreement shall be made, in accordance with Section 6.4, free and clear of and
without deduction or withholding for any and all present or
64
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes (including branch profits
taxes) imposed on the net income of the Agent or any Lender (or any transferee
or assignee thereof, including a participation holder (any such entity, a
"Transferee")) by the jurisdiction in which such Person is organized, has its
principal lending office or is otherwise doing business without considering any
activities associates with this Agreement or any other Financing Agreement (all
such nonexcluded taxes, levies, imposts, deductions, charges withholdings and
liabilities, collectively or individually, "Taxes"). If any Borrower or
Guarantor shall be required to deduct or withhold any Taxes from or in respect
of any sum payable hereunder to the Agent or any Lender (or any Transferee), (i)
the sum payable shall be increased by the amount (an "additional amount")
necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 6.11) the Agent or such Lender (or such Transferee) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) such Borrower or Guarantor shall make such deductions and (iii)
such Borrower or Guarantor shall pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower and Guarantor agrees to
pay to the relevant Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement ("Other Taxes"). Each Borrower and Guarantor, as applicable,
shall deliver to the Agent and each Lender official receipts in respect of any
Taxes or Other Taxes payable hereunder promptly after payment of such Taxes or
Other Taxes.
(c) Except as provided in Section 6.11(e) below, the
Borrowers and Guarantors hereby jointly and severally indemnify and agree to
hold each Agent and each Lender harmless from and against Taxes and Other Taxes
(including, without limitation, Taxes and Other Taxes imposed on any amounts
payable under this Section 6.11) paid by such Person, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Such indemnification shall be
paid within 10 days from the date on which any such Person makes written demand
therefore specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes. If an Agent or Lender (or Transferee) receives a refund in respect
of any Taxes or Other Taxes for which Agent or such Lender has received payment
from a Borrower or Guarantor hereunder, Agent or such Lender, as the case may
be, shall credit to the loan account of the applicable Borrower a portion of
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower or Guarantor, as applicable, under this Section
6.11 with respect to Taxes or Other Taxes giving rise to such refund) that it
determines in good faith will leave it, after such reimbursement, in no better
or worse position than it would have been in if the payment by such Borrower or
Guarantor, whichever is applicable, had not been required (taking into account
all out-of-pocket expenses of the Agent or Lender (or Transferee) and any taxes
on such refund); provided that the applicable Borrower or Guarantor, upon the
request of such Agent or Lender (or Transferee), agrees to repay the amount paid
over to the Borrower or Guarantor (plus penalties or interest) to such Agent or
Lender (or Transferee) in the event such
65
Agent or Lender (or Transferee) is required to repay such refund to the
applicable taxation authority.
(d) Each Lender (or Transferee) that is organized under
the laws of a jurisdiction other than the United States, any State thereof or
the District of Columbia (a "Non-U.S. Lender") shall deliver to the Agent and
the Administrative Borrower two properly completed and duly executed copies of
any of U.S. Internal Revenue Service Form W-8BEN, Form W-8IMY or Form W-8ECI, or
any subsequent versions thereof or successors thereto, in each case claiming
complete exemption from U.S. Federal withholding tax on payments by the
Borrowers or the Guarantors, as applicable, under this Agreement or the other
Financing Agreements. In addition, if such Non-U.S. Lender is claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code,
such Lender shall provide a certificate substantially in the Form of Exhibit
6.10(d) hereto. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Administrative Borrower or the Agent.
Notwithstanding any other provision of this Section 6.11, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 6.11 that such Non-U.S. Lender is not legally able to deliver.
(e) The Borrowers and Guarantors shall not be required to
indemnify any Non-U.S. Lender, or pay any additional amounts to any Non-U.S.
Lender, in respect of United States Federal withholding tax pursuant to this
Agreement to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office, the
date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of clause (d) above.
(f) Any Lender (or Transferee) claiming any indemnity
payment or additional payment amounts payable pursuant to this Section 6.11
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by the
Administrative Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amount which may
thereafter accrue, would not
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require such Lender (or Transferee) to disclose any information such Lender (or
Transferee) deems confidential and would not, in the sole determination of such
Lender (or Transferee), be otherwise disadvantageous to such Lender (or
Transferee).
(g) Each Lender, Transferee and Agent that is a United
States Person within the meaning of Section 7701(a)(30) of the Code (each, a
"U.S. Person"), other than a Lender, Transferee or Agent that is exempt from
United States backup withholding tax based on the indicators described in
Treasury Regulation 1.6049-4(c)(1)(ii), shall deliver at the time(s) and in the
manner(s) if and to the extent such delivery is required under applicable law,
to Administrative Borrower and Agent (as applicable), two (2) copies of property
completed and duly executed originals of United States Internal Revenue Form W-9
or any successor form, certifying that such Person is exempt from United States
backup withholding tax on payments made by or on behalf of Borrowers and
Guarantors hereunder and the other Financing Agreements. Such forms shall be
delivered by each U.S. Person receiving payments made by or on behalf of
Borrowers and Guarantors on or before the date it becomes a party to this
Agreement. Such U.S. Person shall promptly deliver to Agent and Administrative
Borrower such new forms as may be reasonably requested by Agent or
Administrative Borrower. Notwithstanding any other provision of this Section
6.11(g), no U.S. Person shall be required to deliver any form pursuant to this
Section 6.11(g) that such U.S. Person is not legally able to deliver.
(h) The obligations of the Loan Parties under this
Section 6.11 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
6.12 Obligations Several; Independent Nature of Lenders' Rights.
The obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and subject to Section 12.3
hereof, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting.
(a) Borrowers shall provide Agent with the following
documents in a form reasonably satisfactory to Agent:
(i) on a regular basis as reasonably required by
Agent (but in any event no more frequently than weekly if no Default or Event of
Default has occurred and is continuing), schedules of sales made, credits issued
and cash received;
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(ii) as soon as reasonably possible after the end
of each month (but in any event within fifteen (15) Business Days after the end
thereof), on a monthly basis or more frequently as Agent may request:
(A) perpetual inventory reports;
(B) inventory reports by location and
category (and including the amounts of Inventory and the value thereof at any
leased locations and at premises of warehouses, processors or other third
parties);
(C) agings of accounts receivable
(together with a reconciliation to the previous month's aging and general
ledger);
(D) agings of accounts payable (and
including information indicating the amounts owing to owners and lessors of
leased premises, warehouses, processors and other third parties from time to
time in possession of any Collateral); and
(E) a Borrowing Base Certificate,
substantially in the form of Exhibit E or such other form as may be reasonably
satisfactory to Agent, provided, however, that Borrowers shall provide a
Borrowing Base Certificate more frequently upon Agent's good faith request (1)
for the three (3) months immediately following any month during which Borrowers'
Monthly Average Excess Availability was less than $20,000,000 and (2) so long as
any Default or Event of Default has occurred and is continuing;
(iii) upon Agent's good faith request: (A) copies
of customer statements, purchase orders, sales invoices, credit memos,
remittance advices and reports, and copies of deposit slips and bank statements;
(B) copies of shipping and delivery documents; and (C) copies of purchase
orders, invoices and delivery documents for Inventory and Equipment acquired by
any Borrower or Guarantor;
(iv) such other reports as to the Collateral as
Agent shall reasonably request from time to time.
(b) If any Borrower's or Guarantor's records or reports
of the Collateral are prepared or maintained by an accounting service,
contractor, shipper or other agent, such Borrower and Guarantor hereby
irrevocably authorizes such service, contractor, shipper or agent to deliver
such records, reports, and related documents to Agent and to follow Agent's
instructions with respect to further services at any time that an Event of
Default exists or has occurred and is continuing.
7.2 Accounts Covenants.
(a) Borrowers shall notify Agent promptly of: (i) any
material delay in any Borrower's performance of any of its material obligations
to any account debtor or the assertion of any material claims, offsets, defenses
or counterclaims by any account debtor, or any material disputes with account
debtors, or any settlement, adjustment or compromise thereof, (ii) all
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material adverse information known to any Borrower or Guarantor relating to the
financial condition of any account debtor and (iii) any event or circumstance
which, to any Borrower's or Guarantor's knowledge, would cause Agent to consider
any then existing Eligible Accounts as no longer constituting Eligible Accounts.
No credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor without Agent's consent, except
in the ordinary course of a Borrower's or Guarantor's business in accordance
with normal practices and policies previously disclosed in writing to Agent and
except as set forth below and in the schedules delivered to Agent pursuant to
Section 7.1(a) above. So long as no Event of Default exists or has occurred and
is continuing, Borrowers and Guarantors shall settle, adjust or compromise any
claim, offset, counterclaim or dispute with any account debtor. At any time that
an Event of Default exists or has occurred and is continuing, Agent shall, at
its option, have the exclusive right to settle, adjust or compromise any claim,
offset, counterclaim or dispute with account debtors or grant any credits,
discounts or allowances.
(b) With respect to each Account: (i) the amounts shown
on any invoice delivered by Borrowers to Agent or schedule thereof delivered to
Agent shall be true and complete in all material respects, (ii) all payments
made thereon shall immediately be delivered to Agent pursuant to the terms of
this Agreement, (iii) no credit, discount, allowance or extension or agreement
for any of the foregoing shall be granted to any account debtor except as
reported to Agent in accordance with this Agreement and except for credits,
discounts, allowances or extensions made or given in the ordinary course of each
Borrower's business in accordance with normal practices and policies previously
disclosed to Agent, (iv) there shall be no setoffs, deductions, contras,
defenses, counterclaims or disputes existing or asserted with respect thereto
except as reported to Agent in accordance with the terms of this Agreement, (v)
none of the transactions giving rise thereto will violate any applicable
foreign, Federal, State or local laws or regulations in any material respect,
all documentation relating thereto will be legally sufficient under such laws
and regulations in all material respects and all such documentation will be
legally enforceable in accordance with its terms in all material respects.
(c) Agent shall have the right at any time or times, in
Agent's name or in the name of a nominee of Agent, to verify the validity,
amount or any other matter relating to any Receivables or other Collateral, by
mail, telephone, facsimile transmission or otherwise.
7.3 Inventory Covenants. With respect to the Inventory: (a) each
Borrower and Guarantor shall at all times maintain inventory records reasonably
satisfactory to Agent, keeping records that are correct and accurate in all
material respects including records itemizing and describing the kind, type,
quality and quantity of Inventory, such Borrower's or Guarantor's cost therefor
and daily withdrawals therefrom and additions thereto; (b) Borrowers and
Guarantors shall conduct a physical count of the Inventory at least once each
year but at any time or times as Agent may request on or after the occurrence
and during the continuance of an Event of Default, and as soon as reasonably
practicable following such physical inventory shall supply Agent with a report
in the form and with such specificity as may be reasonably satisfactory to Agent
concerning such physical count; (c) Borrowers and Guarantors shall not remove
any Inventory with a Value in excess of $250,000, in the case of Inventory at
any one (1) location, or in excess of $500,000 in the aggregate for all
Inventory from the locations set forth or permitted herein,
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without the prior written consent of Agent, such consent not to be unreasonably
withheld or delayed so long as no Default or Event of Default has occurred and
is continuing, except for sales of Inventory in the ordinary course of its
business (including amounts shipped to outside processors identified on Schedule
8.2 to the Information Certificate (subject to the rights of Borrowers and
Guarantors to deliver Inventory into the possession of additional processors in
accordance with Section 9.2)) and except to move Inventory directly from one
location set forth or permitted herein to another such location and except for
Inventory shipped from the manufacturer thereof to such Borrower or Guarantor
which is in transit to the locations set forth or permitted herein; (d) upon
Agent's request, Borrowers shall, at their expense, no more than one (1) time in
any twelve (12) month period, but at any time or times as Agent may request on
or after the occurrence and during the continuance of an Event of Default,
deliver or cause to be delivered to Agent written appraisals as to the Inventory
in form, scope and methodology substantially the same as reflected in the
appraisals delivered to Agent prior to the Date hereof or otherwise reasonably
acceptable to Agent and by an appraiser reasonably acceptable to Agent,
addressed to Agent and Lenders and upon which Agent and Lenders are expressly
permitted to rely; provided, however, that so long as no Default or Event of
Default shall have occurred and be continuing, Agent shall not retain any
appraiser without the prior written consent of Administrative Borrower
Representative, which consent shall not be unreasonably withheld or delayed; (e)
Borrowers and Guarantors shall produce, use, store and maintain the Inventory
with all reasonable care and caution and in accordance with applicable standards
of any insurance and in material conformity with applicable laws (including the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and all
rules, regulations and orders related thereto); (f) none of the Inventory or
other Collateral constitutes farm products or the proceeds thereof; (g) as
between Borrowers, Agent and Lenders, each Borrower and Guarantor assumes all
responsibility and liability arising from or relating to the production, use,
sale or other disposition of the Inventory; (h) Borrowers and Guarantors shall
not sell Inventory to any customer on approval, or any other basis which
entitles the customer to return or may obligate any Borrower or Guarantor to
repurchase such Inventory; (i) Borrowers and Guarantors shall keep the Inventory
in good and marketable condition, ordinary wear and tear excepted; and (j)
Borrowers and Guarantors shall not, without prior written notice to Agent or the
specific identification of such Inventory in a report with respect thereto
provided by Administrative Borrower Representative to Agent pursuant to Section
7.1(a) hereof, acquire or accept any Inventory on consignment or approval,
except in accordance with past practices and policies.
7.4 Equipment and Real Property Covenants. With respect to the
Equipment and Real Property: (a) upon Agent's reasonable request, Borrowers and
Guarantors shall, at their expense, no more than once in any twelve (12) month
period, but at any time or times as Agent may request on or after the occurrence
and during the continuance of an Event of Default, deliver or cause to be
delivered to Agent written appraisals as to the Equipment and/or the Real
Property in form, scope and methodology substantially the same as in the
appraisals delivered to Agent prior to the date hereof or otherwise reasonably
acceptable to Agent and by an appraiser reasonably acceptable to Agent,
addressed to Agent and upon which Agent is expressly permitted to rely;
provided, however, that so long as no Default or Event of Default shall have
occurred and be continuing, Agent shall not retain any appraiser without the
prior written consent of Administrative Borrower Representative, which consent
shall not be unreasonably withheld or
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delayed; (b) Borrowers and Guarantors shall keep the Equipment in good order and
repair (ordinary wear and tear excepted); (c) Borrowers and Guarantors shall use
the Equipment and Real Property with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with all
applicable laws in all material respects; (d) the Equipment is and shall be used
in the business of Borrowers and Guarantors and not for personal, family,
household or farming use; (e) Borrowers and Guarantors shall not remove any
Equipment with a value in excess of $250,000 in the aggregate for all Equipment
from the locations set forth or permitted herein, except to the extent necessary
to have any Equipment repaired or maintained in the ordinary course of its
business or to move Equipment directly from one location set forth or permitted
herein to another such location and except for the movement of motor vehicles
used by or for the benefit of such Borrower or Guarantor in the ordinary course
of business; (f) the Equipment is now and shall remain personal property and
Borrowers and Guarantors shall not permit any of the Equipment to be or become a
part of or affixed to real property; and (g) as among Borrowers, Agent and
Lender, each Borrower and Guarantor assumes all responsibility and liability
arising from the use of the Equipment and Real Property.
7.5 Power of Attorney. Each Borrower and Guarantor hereby
irrevocably designates and appoints Agent (and all persons designated by Agent)
as such Borrower's and Guarantor's true and lawful attorney-in-fact, and
authorizes Agent, in such Borrower's, Guarantor's or Agent's name, to: (a) at
any time an Event of Default exists or has occurred and is continuing (i) demand
payment on Receivables or other Collateral, (ii) enforce payment of Receivables
by legal proceedings or otherwise, (iii) exercise all of such Borrower's or
Guarantor's rights and remedies to collect any Receivable or other Collateral,
(iv) sell or assign any Receivable upon such terms, for such amount and at such
time or times as the Agent deems advisable, (v) settle, adjust, compromise,
extend or renew an Account, (vi) discharge and release any Receivable, (vii)
prepare, file and sign such Borrower's or Guarantor's name on any proof of claim
in bankruptcy or other similar document against an account debtor or other
obligor in respect of any Receivables or other Collateral, (viii) notify the
post office authorities to change the address for delivery of remittances from
account debtors or other obligors in respect of Receivables or other proceeds of
Collateral to an address designated by Agent, and open and dispose of all mail
addressed to such Borrower or Guarantor and handle and store all mail relating
to the Collateral; (ix) sign such Borrower's or Guarantor's name on any
verification of Receivables and notices thereof to account debtors or any
secondary obligors or other obligors in respect thereof; and (x) do all acts and
things which are necessary, in Agent's good faith determination, to fulfill such
Borrower's or Guarantor's obligations under this Agreement and the other
Financing Agreements and (b) at any time to (i) take control in any reasonable
manner of any item of payment in respect of Receivables or constituting
Collateral or otherwise received in or for deposit in the Blocked Accounts or
otherwise received by Agent or any Lender, (ii) have access to any lockbox or
postal box into which remittances from account debtors or other obligors in
respect of Receivables or other proceeds of Collateral are sent or received,
(iii) endorse such Borrower's or Guarantor's name upon any items of payment in
respect of Receivables or constituting Collateral or otherwise received by Agent
and any Lender and deposit the same in Agent's account for application to the
Obligations, (iv) endorse such Borrower's or Guarantor's name upon any chattel
paper, document, instrument, invoice, or similar document or agreement relating
to any Receivable or any goods pertaining thereto or any other Collateral,
including any
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warehouse or other receipts, or bills of lading and other negotiable or
non-negotiable documents, (v) clear Inventory the purchase of which was financed
with Letter of Credit Accommodations through U.S. Customs or foreign export
control authorities in such Borrower's or Guarantor's name, Agent's name or the
name of Agent's designee, and to sign and deliver to customs officials powers of
attorney in such Borrower's or Guarantor's name for such purpose, and to
complete in such Borrower's or Guarantor's or Agent's name, any order, sale or
transaction, obtain the necessary documents in connection therewith and collect
the proceeds thereof. Each Borrower and Guarantor hereby releases Agent and
Lenders and their respective officers, employees and designees from any
liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as a result of
Agent's or any Lender's own gross negligence or wilful misconduct as determined
pursuant to a final non-appealable order of a court of competent jurisdiction.
7.6 Right to Cure. Agent may at any time after an Event of Default
has occurred and is continuing, at its option, upon reasonable prior notice to
Administrative Borrower Representative, (a) cure any default by any Borrower or
Guarantor under any material agreement with a third party if (i) such Borrower
or Guarantor is not disputing such default or are not proceeding to cure the
same and (ii) the failure to cure could reasonably be expected to materially and
adversely affect the Collateral, its value or the ability of Agent to collect,
sell or otherwise dispose of the Collateral or the rights and remedies of Agent
or any Lender therein or the ability of any Borrower or Guarantor to perform its
obligations hereunder or under any of the other Financing Agreements, (b) pay or
bond on appeal any final judgment entered against any Borrower or Guarantor if
(i) such Borrower is not appealing the same and (ii) the failure to pay or bond
such judgment could reasonably be expected to materially and adversely affect
the Collateral, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and pay any amount, incur any expense or perform any act which, in Agent's
reasonable judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agent and Lenders with respect
thereto; provided that Agent shall not exercise its rights pursuant to this
Section 7.6 to discharge such taxes, liens, security interests or other
encumbrances that are permitted under Section 9.8 hereof, unless either (i) an
Event of Default has occurred and is continuing, or (ii) with respect to liens,
security interests or other encumbrances, the beneficiary or holder of such
lien, security interest or other encumbrance has the right to take action
against or with respect to the Collateral, the exercise of which right is not
then subject to an effective stay pursuant to applicable law. Agent may add any
amounts so expended to the Obligations and charge any Borrower's account
therefor, such amounts to be repayable by Borrowers on demand. Agent and Lenders
shall be under no obligation to effect such cure, payment or bonding and shall
not, by doing so, be deemed to have assumed any obligation or liability of any
Borrower or Guarantor. Any payment made or other action taken by Agent or any
Lender under this Section shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed accordingly.
7.7 Access to Premises. From time to time as reasonably requested
by Agent, at the cost and expense of Borrowers, (a) Agent or its designee shall,
subject to applicable safety regulations and without disruption to ordinary
operations, have reasonable access to all of each Borrower's and Guarantor's
premises during normal business hours and after reasonable notice to Parent, or
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at any time and without notice to Administrative Borrower Representative if an
Event of Default has occurred and is continuing, for the purposes of inspecting,
verifying and auditing the Collateral and all of each Borrower's and Guarantor's
books and records, including the Records, and (b) each Borrower and Guarantor
shall promptly furnish to Agent such copies of such books and records or
extracts therefrom as Agent may reasonably request, and Agent or any Lender or
Agent's designee may use during normal business hours such of any Borrower's and
Guarantor's personnel, equipment, supplies and premises as may be reasonably
necessary for the foregoing and if an Event of Default exists or has occurred
and is continuing for the collection of Receivables and realization of other
Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Each Borrower and Guarantor hereby represents and warrants to Agent and
Lenders the following (which shall survive the execution and delivery of this
Agreement):
8.1 Corporate Existence, Power and Authority. Each Borrower and
Guarantor is a corporation or limited liability company, as applicable, duly
organized and in good standing under the laws of its state of organization and
is duly qualified as a foreign corporation or limited liability company, as
applicable, and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance of this Agreement, the
other Financing Agreements and the transactions contemplated hereunder and
thereunder (a) are all within each Borrower's and Guarantor's organizational
powers, (b) have been duly authorized, (c) are not in contravention of law or
the terms of any Borrower's or Guarantor's certificate of incorporation,
by-laws, or other organizational documentation, or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any
Borrower or Guarantor or its property are bound and (d) will not result in the
creation or imposition of, or require or give rise to any obligation to grant,
any lien, security interest, charge or other encumbrance upon any property of
any Borrower or Guarantor (other than those in favor of Agent and Lenders, the
Term Loan Agent and the New Notes Trustee). This Agreement and the other
Financing Agreements to which any Borrower or Guarantor is a party constitute
legal, valid and binding obligations of such Borrower and Guarantor enforceable
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws affecting creditor's rights generally and by general principles of
equity.
8.2 Name; State of Organization; Chief Executive Office;
Collateral Locations.
(a) The exact legal name of each Borrower and Guarantor
is as set forth on the signature page of this Agreement and in the Information
Certificate, subject to the right of Borrowers and Guarantors to change such
legal name in accordance with Section 9.1(b) below. No Borrower or Guarantor
has, during the five years prior to the date of this Agreement, been known by or
used any other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of
73
its property or assets out of the ordinary course of business, except as set
forth in the Information Certificate. No Borrower or Guarantor has filed any
federal, state or local tax return in a name other than its legal name as set
forth on the signature page of the Information Certificate.
(b) Each Borrower and Guarantor is an organization of the
type and organized in the jurisdiction set forth in the Information Certificate,
subject to the right of Guarantors (other than Parent) to merge or consolidate
in accordance with Section 9.7(a). The Information Certificate accurately sets
forth the organizational identification number of each Borrower and Guarantor or
accurately states that such Borrower or Guarantor has none and accurately sets
forth the federal employer identification number of each Borrower and Guarantor.
(c) The chief executive office and mailing address of
each Borrower and Guarantor and each Borrower's and Guarantor's Records
concerning Accounts are located only at the address identified as such in
Schedule 8.2 to the Information Certificate and its only other places of
business and the only other locations of Collateral with a value in excess of
$250,000 in the aggregate, if any, are the addresses set forth in Schedule 8.2
to the Information Certificate, subject to the rights of any Borrower or
Guarantor to establish new locations in accordance with Section 9.2 below. The
Information Certificate correctly identifies any of such locations which are not
owned by a Borrower or Guarantor and sets forth the owners and/or operators
thereof.
8.3 Financial Statements; No Material Adverse Effect. All
financial statements relating to any Borrower or Guarantor which have been or
may hereafter be delivered by any Borrower or Guarantor to Agent and Lenders
have been prepared in accordance with GAAP (except to the extent such statements
are subject to bankruptcy restructuring and "fresh start" accounting adjustments
and normal year-end adjustments and do not include any notes) and fairly present
in all material respects the financial condition and the results of operation of
such Borrower and Guarantor as at the dates and for the periods set forth
therein. Except as disclosed in any interim financial statements furnished by
Borrowers and Guarantors to Agent prior to the date of this Agreement and the
filing of the Chapter 11 Cases, there has been no act, condition or event which
has had or could reasonably be expected to have a Material Adverse Effect since
the date of the most recent audited financial statements of any Borrower or
Guarantor furnished by any Borrower or Guarantor to Agent prior to the date of
this Agreement.
8.4 Priority of Liens; Title to Properties. The security interests
and liens granted to Agent under this Agreement and the other Financing
Agreements constitute valid and perfected first priority liens and security
interests in and upon the Collateral subject only to the liens indicated on
Schedule 8.4 to the Information Certificate and the other liens permitted under
Section 9.8 hereof. Each Borrower and Guarantor has good and indefeasible fee
simple title to or valid leasehold interests in all of its Real Property
(subject to such exceptions set forth in the mortgage title insurance policy, as
accepted by Agent, that insures each Mortgage) and good and valid title to all
of its other properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except, in each case,
those granted to Agent and such others as are specifically listed on Schedule
8.4 to the Information Certificate or permitted under Section 9.8 hereof.
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8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused
to be filed, in a timely manner all federal, and material State and other tax
returns, reports and declarations which are required to be filed by it. All
information in such tax returns, reports and declarations is complete and
accurate in all material respects. Each Borrower and Guarantor has paid or
caused to be paid all taxes shown to be due and payable on any such tax returns
or claimed due and payable in any assessment received by it, except taxes the
validity of which are being contested in good faith by appropriate proceedings
diligently pursued and available to such Borrower or Guarantor and with respect
to which adequate reserves have been set aside on its books. Adequate provision
has been made for the payment of all accrued and unpaid Federal, and material
State, county, local, foreign and other taxes whether or not yet due and payable
and whether or not disputed.
8.6 Litigation. Except as set forth on Schedule 8.6 to the
Information Certificate and as Borrowers may hereafter notify Agent in
accordance with section 9.6(c), (a) there is no investigation by any
Governmental Authority pending, or to any Borrower's or Guarantor's knowledge
threatened, against or affecting any Borrower or Guarantor, its or their assets
or business and (b) there is no action, suit, proceeding or claim by any Person
pending, or to the best of any Borrower's or Guarantor's knowledge threatened,
against any Borrower or Guarantor or its or their assets or goodwill, or against
or affecting any transactions contemplated by this Agreement, in each case,
which could reasonably be expected to have a Material Adverse Effect.
8.7 Compliance with Other Agreements and Applicable Laws.
(a) Borrowers and Guarantors are not in default in any
respect under, or in violation in any respect of the terms of, any material
agreement, contract, instrument, lease or other commitment to which it is a
party or by which it or any of its assets are bound which could reasonably be
expected to have a Material Adverse Effect. Borrowers and Guarantors are in
compliance with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority relating to their respective businesses,
including, without limitation, those set forth in or promulgated pursuant to the
Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards
Act of 1938, as amended, ERISA, the Code, as amended, and the rules and
regulations thereunder, except, in each case, to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(b) Borrowers and Guarantors have obtained all material
permits, licenses, approvals, consents, certificates, orders or authorizations
of any Governmental Authority required for the lawful conduct of its business
(the "Permits") except, in each case, to the extent the failure to do so could
not reasonably be expected to have a Material Adverse Effect. All of the Permits
are valid and subsisting and in full force and effect except, in each case, to
the extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect. There are no actions, claims or proceedings pending or
to the best of any Borrower's or Guarantor's knowledge, threatened that seek the
revocation, cancellation, suspension or modification of any of the Permits that
could not reasonably be expected to have a Material Adverse Effect.
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8.8 Environmental Compliance. Except as could not reasonably be
expected to result in a Material Adverse Effect for any Borrower or Guarantor,
(a) Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor have
not generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off its premises (whether
or not owned by it) in any manner which at any time violates any applicable
Environmental Law or Environmental Permit, and the operations of Borrowers,
Guarantors and any Subsidiary of any Borrower or Guarantor comply with all
Environmental Laws or Environmental Permits; (b) there is no investigation by
any Governmental Authority or any proceeding, complaint, order, directive,
claim, citation or notice by any Governmental Authority or any other person nor
is any pending, or to any Borrower's or Guarantor's knowledge, threatened, with
respect to any non-compliance with or violation of the requirements of any
Environmental Law by any Borrower or Guarantor and any Subsidiary of any
Borrower or Guarantor or the release, spill or discharge, threatened or actual,
of any Hazardous Material or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials or any other environmental, health or safety matter, which adversely
affects or could reasonably be expected to adversely affect any Borrower or
Guarantor or its or their business, operations or assets, including an adverse
effect from a Borrower or Guarantor incurring liability arising from
contamination of any properties to or at which such Borrower or Guarantor has
transported, stored or disposed of any Hazardous Materials; (c) Borrowers,
Guarantors and their Subsidiaries have no material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials; and (d) Borrowers, Guarantors and their Subsidiaries have, or have
timely applied for receipt or renewal of, all Environmental Permits, and all of
such Environmental Permits are valid and in full force and effect or, if not,
Borrowers and Guarantors have timely applied for the renewal of any such
Environmental Permit.
8.9 Employee Benefits.
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or State
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service or
an application has been made for such letter and to the best of any Borrower's
or Guarantor's knowledge, nothing has occurred which would reasonably be
expected to cause the loss of such qualification. Each Borrower and its ERISA
Affiliates have made all required contributions, in all material respects, to
any Plan subject to Section 412 of the Code, and, in the preceding six (6)
years, no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.
(b) There are no pending, or to the best of any
Borrower's or Guarantor's knowledge, threatened claims, actions or lawsuits, or
action by any Governmental Authority, with respect to any Plan, except those
that could not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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(c) (i) In the preceding six (6) years, no ERISA Event
has occurred or is reasonably expected to occur; (ii) the current value of each
Plan's assets (determined in accordance with the assumptions used for funding
such Plan pursuant to Section 412 of the Code) are not less than such Plan's
liabilities under Section 4001(a)(16) of ERISA; and (iii) each Borrower and
Guarantor, and their ERISA Affiliates, have not engaged in a transaction that
would be subject to Section 4069 or 4212(c) of ERISA; provided however, that
none of the foregoing subsections (i), (ii) or (iii), individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
8.10 Bank Accounts. All of the deposit accounts, investment
accounts or other accounts in the name of or used by any Borrower or Guarantor
maintained at any bank or other financial institution are set forth on Schedule
8.10 to the Information Certificate, subject to the right of each Borrower and
Guarantor to establish new accounts in accordance with Section 5.2 hereof.
8.11 Intellectual Property. Each Borrower and Guarantor owns or
licenses or otherwise has the right to use all Intellectual Property necessary
for the operation of its business as presently conducted or proposed to be
conducted, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect. As of the date hereof, Borrowers
and Guarantors do not have any Intellectual Property registered, or subject to
pending applications, in the United States Patent and Trademark Office or any
similar office or agency in the United States, any State thereof, any political
subdivision thereof or in any other country, other than those described in
Schedule 8.11 to the Information Certificate and has not granted any licenses
with respect thereto other than as set forth in Schedule 8.11 to the Information
Certificate. No event has occurred which permits or would permit after notice or
passage of time or both, the revocation, suspension or termination of such
rights, except to the extent the same could not reasonably be expected to have a
Material Adverse Effect. To any Borrower's and Guarantor's knowledge, no slogan
or other advertising device, product, process, method, substance or other
Intellectual Property or goods bearing or using any Intellectual Property
presently contemplated to be sold by or employed by any Borrower or Guarantor
infringes any patent, trademark, servicemark, tradename, copyright, license or
other Intellectual Property owned by any other Person presently and no claim or
litigation is pending or, to any Borrower's knowledge, threatened against or
affecting any Borrower or Guarantor contesting its right to sell or use any such
Intellectual Property, except to the extent that the same could not reasonably
be expected to have a Material Adverse Effect. Schedule 8.11 to the Information
Certificate sets forth all of the agreements or other arrangements of each
Borrower and Guarantor pursuant to which such Borrower or Guarantor has a
license or other right to use any material trademarks, logos, designs,
representations or other Intellectual Property owned by another person as in
effect on the date hereof and the dates of the expiration of such agreements or
other arrangements of such Borrower or Guarantor as in effect on the date hereof
(collectively, together with such agreements or other arrangements as may be
entered into by any Borrower or Guarantor after the date hereof, collectively,
the "License Agreements" and individually, a "License Agreement"). No trademark,
servicemark, copyright or other Intellectual Property at any time used by any
Borrower or Guarantor which is owned by another person, or owned by such
Borrower or Guarantor subject to any security interest, lien, collateral
assignment, pledge or other encumbrance in favor of any person other than Agent,
is affixed to any Eligible Inventory,
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except (a) to the extent permitted under the term of the License Agreements
listed on Schedule 8.11 to the Information Certificate and (b) to the extent the
sale of Inventory to which such Intellectual Property is affixed is permitted to
be sold by such Borrower or Guarantor under applicable law (including the United
States Copyright Act of 1976).
8.12 Subsidiaries; Affiliates; Capitalization; Solvency.
(a) No Borrower or Guarantor has any direct or indirect
Subsidiaries or is engaged in any joint venture or partnership except as set
forth in Schedule 8.12 to the Information Certificate, subject to the rights of
Borrowers to make investments to the extent permitted by Section 9.10.
(b) Each Borrower and Guarantor is the record and
beneficial owner of all of the issued and outstanding shares of Capital Stock of
each of the Subsidiaries listed on Schedule 8.12 to the Information Certificate
as being owned by such Borrower or Guarantor and there are no proxies,
irrevocable or otherwise, with respect to such shares and no equity securities
of any of the Subsidiaries are or may become required to be issued by reason of
any options, warrants, rights to subscribe to, calls or commitments of any kind
or nature and there are no contracts, commitments, understandings or
arrangements by which any Subsidiary is or may become bound to issue additional
shares of it Capital Stock or securities convertible into or exchangeable for
such shares (subject in each of the foregoing cases to the rights of Borrowers
and Guarantors to issue additional shares of Capital Stock in accordance with
Section 9.7(b)).
(c) The issued and outstanding shares of Capital Stock of
each Borrower and Guarantor are directly and beneficially owned and held by the
persons indicated in the Information Certificate (subject in each of the
foregoing cases to the rights of Borrowers and Guarantors to issue additional
shares of Capital Stock in accordance with Section 9.7(b)), and in each case all
of such shares have been duly authorized and are fully paid and non-assessable,
free and clear of all claims, liens, pledges and encumbrances of any kind,
except as disclosed in writing to Agent prior to the date hereof or permitted by
Section 9.8 .
(d) The Borrowers and Guarantors taken as a whole, are
Solvent and will continue to be Solvent after the creation of the Obligations,
the security interests of Agent and the other transaction contemplated
hereunder.
8.13 Labor Disputes.
(a) Set forth on Schedule 8.13 to the Information
Certificate is a list (including dates of termination) of all collective
bargaining or similar agreements currently in effect on the date of this
Agreement between or applicable to each Borrower and Guarantor and any union,
labor organization or other bargaining agent in respect of the employees of any
Borrower or Guarantor on the date hereof.
(b) Except as set forth on Schedule 8.13 to the
Information Certificate or as Borrowers may hereafter notify Agent in accordance
with Section 9.6(c), there is (i) no significant unfair labor practice complaint
pending against any Borrower or Guarantor or, to the
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best of any Borrower's or Guarantor's knowledge, threatened against it, before
the National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is pending on the date hereof against any Borrower or Guarantor or, to
best of any Borrower's or Guarantor's knowledge, threatened against it, and (ii)
no significant strike, labor dispute, slowdown or stoppage is pending against
any Borrower or Guarantor or, to the best of any Borrower's or Guarantor's
knowledge, threatened against any Borrower or Guarantor, except to the extent
that any of the foregoing would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
8.14 Restrictions on Subsidiaries. Except for restrictions
contained in this Agreement or any other agreement with respect to Indebtedness
of any Borrower or Guarantor permitted hereunder as in effect on the date
hereof, there are no contractual or consensual restrictions on any Borrower or
Guarantor or any of its Subsidiaries which prohibit or otherwise restrict (a)
the transfer of cash or other assets (i) between any Borrower or Guarantor and
any of its or their Subsidiaries or (ii) between any Subsidiaries of any
Borrower or Guarantor or (b) the ability of any Borrower or Guarantor or any of
its or their Subsidiaries to incur Indebtedness or grant security interests to
Agent or any Lender in the Collateral.
8.15 Material Contracts. Schedule 8.15 to the Information
Certificate sets forth all Material Contracts to which any Borrower or Guarantor
is a party or is bound as of the date hereof. Borrowers and Guarantors have
delivered true, correct and complete copies of such Material Contracts to Agent
on or before the date hereof. Borrowers and Guarantors are not in breach or in
default in any material respect of or under any Material Contract and have not
received any notice of the intention of any other party thereto to terminate any
Material Contract as a result of a breach by Borrowers.
8.16 Intentionally Omitted.
8.17 Accuracy and Completeness of Information. All information
furnished (other than projections or forward-looking statements) by or on behalf
of any Borrower or Guarantor in writing to Agent or any Lender in connection
with this Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including all information on the Information
Certificate is true and correct in all material respects on the date as of which
such information is dated or certified and does not omit any material fact
necessary in order to make such information not materially misleading. No event
or circumstance has occurred which has had or could reasonably be expected to
have a Material Adverse Effect, which has not been fully and accurately
disclosed to Agent in writing prior to the date hereof.
8.18 Term Loan Documents. No event of default exists, or has
occurred and is continuing under and as defined in the Term Loan Documents.
Agent has received true, correct and complete copies of all of the Term Loan
Documents.
8.19 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement. On the date of each
request for or acceptance of funds constituting
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an additional borrowing or other credit accommodation hereunder, each Borrower
shall be deemed to have represented and warranted that the conditions set forth
in Section 4.2(a) hereof have been satisfied and such representations and
warranties shall be conclusively presumed to have been relied on by Agent and
Lenders regardless of any investigation made or information possessed by Agent
or any Lender. The representations and warranties set forth herein shall be
cumulative and in addition to any other representations or warranties which any
Borrower or Guarantor shall now or hereafter give, or cause to be given, to
Agent or any Lender under the Financing Agreements.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence.
(a) Each Borrower and Guarantor shall at all times
preserve, renew and keep in full force and effect its corporate or limited
liability company, as the case may be, existence and rights and franchises with
respect thereto and maintain in full force and effect all licenses, trademarks,
tradenames, approvals, authorizations, leases, contracts, Permits and
Environmental Permits necessary to carry on the business as presently or
proposed to be conducted, except as to any Guarantor other than Parent as
permitted under the Financing Agreements and except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) No Borrower or Guarantor shall change its name unless
each of the following conditions is satisfied: (i) Agent shall have received not
less than twenty-one (21) days prior written notice from Administrative Borrower
Representative of such proposed change in its name, which notice shall
accurately set forth the new name; and (ii) Agent shall have received from
Administrative Borrower Representative a copy of the amendment to the
Certificate of Incorporation or comparable governing document of such Borrower
or Guarantor providing for the name change certified by the Secretary of State
of the jurisdiction of incorporation or organization of such Borrower or
Guarantor promptly after it is available.
(c) No Borrower or Guarantor shall change its chief
executive office or organizational identification number (or if it does not have
one, shall not acquire one) unless Agent shall have received not less than
twenty-one (21) days' prior written notice from Administrative Borrower
Representative of such proposed change, which notice shall set forth such
information with respect thereto as Agent may reasonably require and Agent shall
have received such agreements as Agent may reasonably require in connection
therewith. No Borrower or Guarantor shall change its type of organization,
jurisdiction of organization or other legal structure, except as otherwise
permitted in Section 9.7(b) or otherwise under the Financing Agreements.
9.2 New Collateral Locations. Each Borrower and Guarantor may open
any new location within the continental United States or deliver Collateral, in
the ordinary course of business, to new third party processor locations provided
Administrative Borrower Representative (a) gives Agent fifteen (15) days prior
written notice of the intended opening of any such new location and (b) executes
and delivers, or causes to be executed and delivered, to
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Agent such agreements, documents, and instruments as Agent may deem reasonably
necessary or desirable to protect its interests in the Collateral at such
location.
9.3 Compliance with Laws, Regulations, Etc.
(a) Each Borrower and Guarantor shall, and shall cause
any Subsidiary to, at all times, use commercially reasonable efforts to comply
in all material respects with all laws, rules, regulations, licenses, approvals,
orders, Environmental Permits and other Permits applicable to it and duly
observe all requirements of any foreign, Federal, State or local Governmental
Authority, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(b) Administrative Borrower Representative shall give
written notice to Agent no later than thirty (30) days after any executive
officer of any Borrower or Guarantor receives any written notice of, or any
executive officer of any Borrower or Guarantor otherwise obtains actual
knowledge of, (i) the occurrence of any event involving the release, spill or
discharge, threatened or actual, of any Hazardous Material, other than in the
ordinary course of business and other than as permitted under any applicable
Environmental Law, or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect to: (A) any non-compliance
with or violation of any Environmental Law by any Borrower or Guarantor or (B)
the release, spill or discharge, threatened or actual, of any Hazardous Material
other than in the ordinary course of business and other than as permitted under
any applicable Environmental Law, provided however, that Borrowers or Guarantors
shall provide such notice only in the event that the matter in clause (i) or
(ii) is reasonably anticipated to result in Borrower or Guarantor incurring
liability or costs pursuant to Environmental Laws in any fiscal year in excess
of $250,000 individually or $5,000,000 in the aggregate. Borrower shall provide
copies to Agent of all environmental surveys, audits, assessments, feasibility
studies and results of remedial investigations related to items for which notice
is required pursuant to this Section 9.3(b), as the Agent reasonably requests.
Each Borrower and Guarantor shall take prompt action to respond to any material
non-compliance with any of the Environmental Laws and shall regularly report to
Agent on such response.
(c) Without limiting the generality of the foregoing,
whenever Agent reasonably determines that there is non-compliance, or any
condition which requires any action by or on behalf of any Borrower or Guarantor
in order to avoid any non-compliance, with any Environmental Law, Borrowers
shall prevent or mitigate a material loss in value to any Eligible Real Property
arising under Environmental Law, and at Agent's reasonable request and
Borrowers' expense: (i) cause an independent environmental engineer reasonably
acceptable to Agent to conduct such tests of the site where non-compliance or
alleged non-compliance with such Environmental Laws has occurred as to such
non-compliance or alleged non-compliance and prepare and deliver to Agent a
report as to such non-compliance or alleged non-compliance setting forth the
results of such tests, a proposed plan for responding to any environmental
problems described therein, and an estimate of the costs thereof and (ii)
provide to Agent a supplemental report of such engineer whenever the scope of
such non-compliance or alleged
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non-compliance, or such Borrower's or Guarantor's response thereto or the
estimated costs thereof, shall change in any material respect.
(d) Each Borrower and Guarantor shall indemnify and hold
harmless Agent and Lenders and their respective directors, officers, employees,
agents, invitees, representatives, successors and assigns, from and against any
and all losses, claims, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees and expenses) directly or indirectly arising out of
or attributable to the use, generation, manufacture, reproduction, storage,
release, threatened release, spill, discharge, disposal or presence of a
Hazardous Material, including the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of any Borrower or
Guarantor and the preparation and implementation of any closure, remedial or
other required plans. All indemnifications in this Section 9.3 shall survive the
payment of the Obligations and the termination of this Agreement.
9.4 Payment of Taxes and Claims. Each Borrower and Guarantor
shall, and shall cause each of their Subsidiaries to, duly pay and discharge
(before the same become delinquent) all taxes, assessments, contributions and
governmental charges upon or against it or its properties or assets, except for
taxes, assessments, contributions and governmental charges (a) the validity of
which are being contested in good faith by appropriate proceedings diligently
pursued and available to such Borrower, Guarantor or Subsidiary, as the case may
be, and with respect to which adequate reserves have been set aside on its books
or (b) which are of immaterial amounts and the nonpayment of which would not
give rise to a lien. Subject to Section 6.11 hereof, each Borrower and Guarantor
shall be liable for any Taxes or Other Taxes imposed on Agent or any Lender as a
result of the financing arrangements provided for herein and each Borrower and
Guarantor agrees to indemnify and hold Agent harmless with respect to the
foregoing, and to repay to Agent, for the benefit of Lenders, on demand the
amount thereof, and until paid by such Borrower or Guarantor such amount shall
be added and deemed part of the Loans. The foregoing indemnity shall survive the
payment of the Obligations and the termination of this Agreement.
9.5 Insurance. Each Borrower and Guarantor shall, and shall cause
any Subsidiary to, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral and in the amounts and
covering such risks as is customarily insured against or carried by companies
engaged in the same or similar businesses, owning similar properties in the same
general geographic areas as, and similarly situated with Borrowers and their
Subsidiaries. Said policies of insurance shall be reasonably satisfactory to
Agent as to form, amount and insurer. Borrowers and Guarantors shall furnish
certificates, policies or endorsements to Agent as Agent shall reasonably
require as proof of such insurance, and, if any Borrower or Guarantor fails to
do so, Agent is authorized, but not required, to obtain such insurance at the
expense of Borrowers. All such policies maintained by Borrowers and Guarantors
shall provide for at least thirty (30) days prior written notice to Agent of any
cancellation or reduction of coverage and that at any time an Event of Default
exists or has occurred and is continuing, Agent may act as attorney for each
Borrower and Guarantor in adjusting, settling, amending and canceling such
insurance. Borrowers and Guarantors shall cause Agent to be named as a loss
payee and an additional insured (but without any liability for any premiums)
under such insurance policies and Borrowers and Guarantors shall use
commercially reasonable efforts to obtain non-contributory
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lender's loss payable endorsements to all such insurance policies in form and
substance reasonably satisfactory to Agent. Such lender's loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Agent as its interests may appear and further specify that Agent and Lenders
shall be paid regardless of any act or omission by any Borrower, Guarantor or
any of its or their Affiliates. Without limiting any other rights of Agent or
Lenders, any insurance proceeds received by Agent at any time may, subject to
Section 6.4, be applied to payment of the Obligations, whether or not then due,
in such order and in such manner as is set forth in Section 6.4. Upon
application of such proceeds to the Revolving Loans, Revolving Loans may be
available subject and pursuant to the terms hereof to be used for the costs of
repair or replacement of the Collateral lost or damages resulting in the payment
of such insurance proceeds.
9.6 Financial Statements and Other Information.
(a) Each Borrower and Guarantor shall, and shall cause
any Subsidiary to, keep proper books and records in which true and complete
entries shall be made of all dealings or transactions of or in relation to the
Collateral and the business of such Borrower, Guarantor and its Subsidiaries in
such manner as is required for the preparation of financial statements in
accordance with GAAP. Borrowers and Guarantors shall promptly furnish to Agent
and Lenders all such financial and other information as Agent shall reasonably
request relating to the Collateral and the assets, business and operations of
Borrowers and Guarantors, and Borrower shall notify the auditors and accountants
of Borrowers and Guarantors that Agent is authorized to obtain such information
directly from them. Without limiting the foregoing, Borrowers and Guarantors
shall furnish or cause to be furnished to Agent, the following: (i) within
thirty (30) days after the end of each fiscal month, internally prepared monthly
unaudited consolidated financial statements, financial statements (including in
each case balance sheets, statements of operations by division and, statements
of cash flow), all in reasonable detail, fairly presenting in all material
respects the financial position and the results of the operations of Parent and
its consolidated Subsidiaries as of the end of and through such fiscal month,
certified to be correct by the chief financial officer or treasurer of Parent,
subject to normal year-end adjustments and no footnotes and accompanied by a
compliance certificate substantially in the form of Exhibit C hereto, along with
a schedule in a form satisfactory to Agent of the calculations used in
determining, as of the end of such month, whether Borrowers and Guarantors are
then in compliance with the covenant set forth in Section 9.17 of this
Agreement, (ii) within forty-five (45) days after the end of each fiscal
quarter, quarterly unaudited consolidated financial statements (including in
each case balance sheets, statements of operations by division and statements of
cash flow), all in reasonable detail, fairly presenting in all material respects
the financial position and the results of the operations of Parent and its
consolidated Subsidiaries as of the end of and through such fiscal quarter,
certified to be correct by the chief financial officer or treasurer of Parent,
subject to normal year-end adjustments and including footnotes to such financial
statements and (iii) within one hundred twenty (120) days after the end of each
fiscal year, audited consolidated financial statements of Parent and its
Subsidiaries (including in each case balance sheets, statements of operations by
division and statements of cash flow) of Parent and its consolidated
Subsidiaries, and the accompanying notes thereto, all in reasonable detail,
fairly presenting in all material respects the financial position and the
results of the operations of
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Parent and its Subsidiaries as of the end of and for such fiscal year, together
with the opinion of independent certified public accountants without a going
concern qualification or qualification as to scope of audit with respect to the
audited consolidated financial statements, which accountants shall be an
independent accounting firm selected by Borrowers of nationally recognized
standing and reasonably acceptable to Agent, that such audited consolidated
financial statements have been prepared in accordance with GAAP, and present
fairly in all material respects the results of operations and financial
condition of Parent and its Subsidiaries as of the end of and for the fiscal
year then ended. With respect to each quarterly financial statement for any
period, to the extent that any Pro Forma Cost Savings is added back into EBITDA
for such period, Borrowers shall provide Agent and Lenders with a report on the
achievement of such Pro Forma Cost Savings.
(b) Without limiting the foregoing, Borrowers and
Guarantors shall furnish or cause to be furnished to Agent, as soon as
available, but in no event later than seventy-five (75) days after the end of
each fiscal year, projected consolidated financial statements (including in each
case, balance sheets and statements of operations by division and statements of
cash flow) of Parent and its consolidated Subsidiaries for the next fiscal year,
including forecasted income statements, cash flow statements and balance sheets
and statements of operations income and loss (collectively, all of the foregoing
being referred to herein as the "Projections"), all in reasonable detail, and in
a format consistent with the Projections delivered by Borrowers to Agent prior
to the date hereof, together with such supporting information as Agent may
reasonably request. All of the Projections shall be prepared on a monthly basis
for the next succeeding year. The Projections shall represent Borrowers'
reasonable estimate of the future financial performance of Borrowers for the
periods set forth therein and shall have been prepared on the basis of the
assumptions set forth therein which Borrowers believe are fair and reasonable as
of the date of preparation, in light of then current and reasonably foreseeable
business conditions (it being understood that actual results may differ
substantially from those set forth in the Projections). Borrowers shall provide
to Agent revised Projections promptly after any material revision that has been
approved by Borrowers' boards of directors to Borrowers' then existing business
plan previously furnished to Agent.
(c) Borrowers and Guarantors shall promptly notify Agent
in writing of the details of (i) any loss, damage, investigation, action, suit,
proceeding or claim relating to Collateral having a value of more than
$1,000,000 or which if adversely determined could reasonably be expected to
result in any Material Adverse Effect with respect to any Borrower or Guarantor,
(ii) any Material Contract being terminated or being amended in a material
adverse manner or any new Material Contract entered into (in which event
Borrowers and Guarantors shall provide Agent with a copy of such Material
Contract), (iii) any order, judgment or decree (A) in excess of $1,000,000 shall
have been entered against any Borrower or Guarantor any of its or their
properties or assets or (B) that could reasonably be expected to have a Material
Adverse Effect, (iv) any notification of a material violation of laws or
regulations received by any Borrower or Guarantor that could reasonably be
expected to have a Material Adverse Effect, (v) any ERISA Event that could
reasonably be expected to result in liability in excess of $1,000,000, and (vi)
the occurrence of any Default or Event of Default.
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(d) Borrowers and Guarantors shall promptly after the
sending or filing thereof furnish or cause to be furnished to Agent copies of
all reports which any Borrower or Guarantor sends to its stockholders generally
and copies of all reports and registration statements which any Borrower or
Guarantor files with the Securities and Exchange Commission, any national
securities exchange or the National Association of Securities Dealers, Inc.
(e) Subject to Section 13.5 hereof, Agent is hereby
authorized to deliver a copy of any financial statement or any other information
relating to the business of Borrowers and Guarantors as required by any court or
other Governmental Authority or to any Lender or Participant or prospective
Lender or Participant or any Affiliate of any Lender or Participant, subject to
Section 13.5 hereof, Each Borrower and Guarantor hereby irrevocably authorizes
and directs all accountants or auditors to deliver to Agent, at Borrowers'
expense, copies of the audited financial statements of any Borrower and
Guarantor and any final reports or management letters prepared by such
accountants or auditors on behalf of any Borrower or Guarantor and to disclose
to Agent and Lenders such information as they may have regarding the business of
any Borrower and Guarantor; provided that Borrowers and Guarantors shall be
given reasonable notice of and opportunity to participate in any discussions
among Agent and Lenders and such accountants or auditors. Any documents,
schedules, invoices or other papers delivered to Agent or any Lender may be
destroyed or otherwise disposed of by Agent or such Lender one (1) year after
the same are delivered to Agent or such Lender, except as otherwise designated
by Administrative Borrower Representative to Agent or such Lender in writing;
provided, that, Agent shall provide prior notice (if practicable) to
Administrative Borrower Representative and, if prior notice is not practicable,
then as soon as possible thereafter.
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to,
directly or indirectly:
(a) merge into or with or consolidate with any other
Person or permit any other Person to merge into or with or consolidate with it,
except that (i) any wholly-owned Subsidiary of Parent (other than any Borrower
or Guarantor) may merge with and into or consolidate with any other wholly-owned
Subsidiary of Parent (other than any Borrower or Guarantor), (ii) any Borrower
may merge with and into or consolidate with any other Borrower, (iii) any
Guarantor may merge with and into or consolidate with any other Guarantor, (iv)
with the prior consent of Agent, any wholly-owned Subsidiary of Parent (other
than any Borrower or Guarantor) may merge with and into or consolidate with
Parent, any Borrower or Guarantor, and (v) Parent and any of its Subsidiaries
may merge with and into or consolidate with any other Person in order to
effectuate any Permitted Acquisition, provided that Parent or the applicable
Subsidiary shall be the surviving corporation and (vi) any Subsidiary of Parent
other than a Borrower or Guarantor may merge with and into or consolidate with
any other Person in order to effectuate any Asset Sale permitted hereunder and,
provided, that, each of the following conditions is satisfied as determined by
Agent in good faith: (A) Agent shall have received not less than ten (10)
Business Days' prior written notice of the intention of such Subsidiaries to so
merge or consolidate, which notice shall set forth in reasonable detail
reasonably satisfactory to Agent, the Persons that are merging or consolidating,
which Person will be the surviving entity, the locations of the material assets
of the Persons that are merging or consolidating, and the material
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agreements and documents relating to such merger or consolidation, (B) Agent
shall have received such other information with respect to such merger or
consolidation as Agent may reasonably request, (C) as of the effective date of
the merger or consolidation and after giving effect thereto, no Default or Event
of Default shall have occurred, (D) Agent shall have received true, correct and
complete copies of all material agreements, documents and instruments relating
to such merger or consolidation, including, but not limited to, the certificate
or certificates of merger to be filed with each appropriate Secretary of State
(with a copy as filed promptly after such filing), (E) except in the case of
mergers permitted pursuant to Section 9.7(a)(vi) in order to effectuate Asset
Sales permitted hereunder, the surviving corporation (except for Subsidiaries
that are not organized in the United States) shall expressly confirm, ratify and
assume the Obligations and the Financing Agreements to which it is a party in
writing, in form and substance reasonably satisfactory to Agent, and Borrowers
and Guarantors shall execute and deliver such other agreements, documents and
instruments as Agent may reasonably request in connection therewith;
(b) sell, issue, assign, lease, license, transfer,
abandon or otherwise dispose of any of its assets (including Indebtedness held
by such Person and Capital Stock of such Person) to any Person, except for:
(i) sales of Inventory in the ordinary course of
business;
(ii) the sale or other disposition of worn-out or
obsolete Equipment or Equipment and Real Property no longer used or useful in
the business of any Borrower or Guarantor so long as such sales or other
dispositions do not involve Equipment having an aggregate fair market value in
excess of $5,000,000 for all such Equipment and Real Property disposed of during
the term of this Agreement, provided, that, (A) no Default or Event of Default
shall have occurred and be continuing at the time of any such sale or other
disposition and after giving effect thereto and (B) the net cash proceeds of
such sale or disposition shall be subject to the terms of Section 6.4;
(iii) transfers resulting from any casualty or
condemnation of property or assets;
(iv) intercompany sales or transfers of assets
among Borrowers and Guarantors in the ordinary course of Borrowers' and
Guarantors' business;
(v) the licensing or sublicensing of
Intellectual Property and General Intangibles and any license, lease or sublease
of other property in the ordinary course of Borrowers' and Guarantors' business;
(vi) leases or subleases of Real Property no
longer used or useful in the Borrowers' business provided no Default or Event of
Default shall have occurred and be continuing on the date thereof and after
giving effect thereto;
(vii) consignment arrangements or similar
arrangements for the sale of assets in the ordinary course of business, provided
that Borrowers shall have satisfied all conditions with
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respect to such consignment arrangements that are set forth in clause (d) of the
definition of Eligible Accounts;
(viii) subject to Agent's prior written consent,
sales or discounts of overdue accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof;
(ix) sales or other dispositions of other
property or assets not otherwise permitted hereunder for at least 80% in cash in
an aggregate amount not less than the fair market value of such property or
assets; provided that (A) in the case of this clause (ix), the Net Cash Proceeds
of such sales or other dispositions do not exceed $5,000,000 in the aggregate
for the term of this Agreement, (B) no Default or Event of Default shall have
occurred and be continuing on the date thereof and after giving effect thereto,
and (C) the Net Cash Proceeds of such sales or dispositions shall be subject to
the terms of Section 6.4;
(x) sales by Borrowers' and Guarantors' foreign
Subsidiaries of accounts receivable in connection with any Permitted Foreign
Subsidiary Credit Facility;
(xi) the issuance, on or about the date hereof,
to holders of the New Notes of substantially all of Parent's common Stock, as
contemplated by the Chapter 11 Plan;
(xii) in addition to the issuance of Stock
permitted pursuant to clause (xi) immediately above, the issuance and sale by
any Borrower or Guarantor of Capital Stock of such Borrower or Guarantor after
the date hereof; provided, that, (A) Agent shall have received not less than ten
(10) Business Days' prior written notice of such issuance and sale by such
Borrower or Guarantor, which notice shall specify the parties to whom such
shares are to be sold (if known) and the total amount and the Net Cash Proceeds
anticipated to be realized from such sale, (B) such Borrower or Guarantor shall
not be required to pay any cash dividends or repurchase or redeem such Capital
Stock or make any other payments in respect thereof, except as otherwise
permitted hereunder, and (C) the terms of such Capital Stock, and the terms and
conditions of the purchase and sale thereof, shall not include any terms that
include any limitation on the right of any Borrower to request or receive Loans
or Letter of Credit Accommodations or the right of any Borrower and Guarantor to
amend or modify any of the terms and conditions of this Agreement or any of the
other Financing Agreements or otherwise in any way relate to or affect the
arrangements of Borrowers and Guarantors with Agent and Lenders or are more
restrictive or burdensome to any Borrower or Guarantor than the terms of any
Capital Stock in effect on the date hereof, and (D) Borrowers' and Guarantors'
use of such Net Cash Proceeds shall be subject to the terms of Section 6.4;
(xiii) the issuance of Capital Stock of any
Borrower or Guarantor consisting of common stock pursuant to an employee stock
option or grant or similar equity plan or 401(k) plans of such Borrower or
Guarantor for the benefit of its employees, directors and consultants,
including, without limitation, Parent's issuance of stock options, and the
issuance of shares of its common Capital Stock in connection with the exercise
of such stock options, to Parent's and Borrowers' management pursuant to
Parent's 2004 Stock Plan, provided, that, in no event shall such Borrower or
Guarantor be required to issue, or shall such Borrower or Guarantor issue,
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Capital Stock pursuant to such stock plans or 401(k) plans which would result in
a Change of Control or other Event of Default;
(xiv) the Specified Sale, provided that, at the
time of such sale and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing and the Net Cash Proceeds related
thereto shall be subject to Section 6.4; and
(xv) sale and transfer of Equipment by Borrowers
to Borrowers' or Guarantor's foreign Subsidiaries having an aggregate fair
market value not exceeding $10,000,000 in the aggregate for all such transfers
during the term of this Agreement and evidenced by promissory notes executed by
the transferee of such Equipment, in form and substance reasonably satisfactory
to Agent, provided the then outstanding aggregate amounts of investments and
loans by Borrowers to or in Subsidiaries permitted by Section 9.10(h), plus
those loans permitted by and made pursuant to this Section 9.7(b)(xv) shall not
exceed $15,000,000 and, provided further that, at the time of any such sale or
transfer and after giving effect thereto, if the aggregate cumulative fair
market value of the Equipment sold or transferred in reliance on this subsection
after the date of this Agreement exceeds $2,000,000, (A) no Default or Event of
Default shall have occurred and be continuing, (B) Borrowers shall have Excess
Availability of at least $20,000,000 and (C) such promissory notes shall be
pledged and delivered to Agent as part of the Collateral;
(c) wind up, liquidate or dissolve except that any
Subsidiary of Parent (other than a Borrower) may wind up, liquidate and
dissolve, provided, that, each of the following conditions is satisfied: (i) the
winding up, liquidation and dissolution of such Subsidiary shall not violate any
law or any order or decree of any court or other Governmental Authority in any
material respect and shall not conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage, deed of trust, or any other
agreement or instrument to which any Borrower or Guarantor is a party or may be
bound, (ii) such winding up, liquidation or dissolution shall be done in
accordance with the requirements of all applicable laws and regulations, (iii)
effective upon such winding up, liquidation or dissolution, all of the assets
and properties of such Subsidiary shall be duly and validly transferred and
assigned to a Borrower or a Guarantor, free and clear of any liens, restrictions
or encumbrances other than the security interest and liens of Agent and
encumbrances permitted pursuant to Section 9.8 (and Agent shall have received
such evidence thereof as Agent may reasonably require) and Agent shall have
received such deeds, assignments or other agreements as Agent may request to
evidence and confirm the transfer of such assets to of such Guarantor to a
Borrower or a Guarantor, (iv) Agent shall have received all documents and
agreements that any Borrower or Guarantor has filed with any Governmental
Authority or as are otherwise required to effectuate such winding up,
liquidation or dissolution, (v) no Borrower or Guarantor shall assume any
Indebtedness, obligations or liabilities as a result of such winding up,
liquidation or dissolution, or otherwise become liable in respect of any
obligations or liabilities of the entity that is winding up, liquidating or
dissolving, unless such Indebtedness is otherwise expressly permitted hereunder,
(vi) Agent shall have received not less than five (5) Business Days prior
written notice of the intention of such Guarantor to wind up, liquidate or
dissolve, and (vii) as of the date of such winding up, liquidation or
dissolution and after giving effect thereto, no Default or Event of Default
shall have occurred.
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In connection with any sale or disposition of Collateral permitted by this
Section 9.7 (which, for the avoidance of doubt, shall not include a disposition
of all or substantially all of the Collateral) the Agent will, at the Borrowers'
expense, execute and deliver such releases of Collateral as may be reasonably
necessary to evidence the release of all Liens on such Collateral under the
Financing Documents.
9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall
not permit any Subsidiary to, create, incur, assume, authorize the filing of or
suffer to exist any security interest, mortgage, pledge, lien, charge or other
encumbrance of a similar nature on any of its assets or properties, including
the Collateral, or file or permit the filing of, or permit to remain in effect,
any financing statement or other similar notice of any security interest or lien
with respect to any such assets or properties, except:
(a) the security interests and liens of Agent for itself
and the benefit of Lenders;
(b) liens securing the payment of taxes, assessments or
other governmental charges or levies either not yet overdue or the validity of
which are being contested in good faith by appropriate proceedings diligently
pursued and available to such Borrower, or Guarantor or Subsidiary, as the case
may be and with respect to which adequate reserves have been set aside on its
books;
(c) non-consensual statutory liens (other than liens
described in clause (b) above) arising in the ordinary course of such
Borrower's, Guarantor's or Subsidiary's business to the extent: (i) such liens
secure obligations which are not overdue or (ii) such liens secure obligations
relating to claims or liabilities which are fully insured (subject to
deductibles) and being, or can reasonably be expected to be, defended at the
sole cost and expense and at the sole risk of the insurer in accordance with the
applicable policy or being contested in good faith by appropriate proceedings
diligently pursued and available to or for the benefit of such Borrower,
Guarantor or such Subsidiary, in each case prior to the commencement of
foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books;
(d) zoning restrictions, easements, licenses, covenants
and other restrictions affecting the use and occupancy of Real Property which do
not interfere in any material respect with the use of such Real Property or
ordinary conduct of the business of such Borrower, Guarantor or such Subsidiary
as presently conducted thereon or materially impair the value of the Real
Property which may be subject thereto;
(e) purchase money security interests in Equipment and in
imbedded software in such Equipment and all attachments, accessions and other
property affixed to such Equipment (including Capital Leases) and purchase money
mortgages on Real Property to secure Indebtedness permitted under Section 9.9(b)
or otherwise permitted under this Agreement;
(f) pledges and deposits of cash by any Borrower or
Guarantor after the date hereof in the ordinary course of business in connection
with workers' compensation, unemployment
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insurance and other types of social security benefits consistent with the
current practices of such Borrower or Guarantor as of the date hereof;
(g) liens, pledges and deposits of cash in escrow
accounts or otherwise by any Borrower or Guarantor after the date hereof to
secure the performance of tenders, bids, leases, trade contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations in each case in the ordinary course of business consistent with the
current practices of such Borrower or Guarantor as of the date hereof; provided,
that, in connection with any performance bonds issued by a surety or other
person, if such obligations exceed $250,000, the issuer of such bond shall have
waived or subordinated in writing any rights in or to, or other interest in, any
of the Collateral in an agreement, in form and substance satisfactory to Agent;
(h) liens arising from (i) operating leases and the
precautionary UCC financing statement filings in respect thereof and (ii)
equipment or other materials which are not owned by any Borrower or Guarantor
located on the premises of such Borrower or Guarantor (but not in connection
with, or as part of, the financing thereof) from time to time in the ordinary
course of business and the precautionary UCC financing statement filings in
respect thereof;
(i) judgments and other similar liens arising in
connection with court proceedings that do not constitute an Event of Default,
provided, that, (i) such liens are being contested in good faith and by
appropriate proceedings diligently pursued, (ii) adequate reserves or other
appropriate provision, if any, as are required by GAAP have been made therefor,
(iii) a stay of enforcement of any such liens is in effect and (iv) Agent may
establish a Reserve with respect thereto;
(j) the security interests and liens set forth on
Schedule 8.4 to the Information Certificate and any modifications, replacements,
renewals or extensions thereof to the extent permitted by this Agreement;
(k) the security interests and liens of Term Loan Agent
for itself and the benefit of Term Loan Lenders, subject to the terms and
conditions of the Term Loan Intercreditor Agreement;
(l) the security interests and liens of the New Notes
Trustee, subject to the terms and conditions of the New Notes Intercreditor
Agreement;
(m) the security interests and liens granted by
Borrowers' and Guarantors' foreign Subsidiaries to secure the Indebtedness
incurred by such foreign Subsidiaries permitted pursuant to Section 9.9(g);
(n) licenses and operating leases and subleases granted
to others in the ordinary course of business of Borrowers and permitted pursuant
to Section 9.7 hereof; and
(o) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including a right of set-off) held by
such banking institutions incurred in the ordinary course and within the general
parameters customary for the banking industry;
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(p) Liens existing on property at the time of its
acquisition or existing on the property of any Person that becomes a Subsidiary
after the date hereof (other than Liens on the Capital Stock of any Person that
becomes a Subsidiary); provided, that (i) such liens were not created in
contemplation of such acquisition or such Person becoming a Subsidiary, (ii)
such liens do not extend to or cover any other assets or property (other than
the proceeds or products thereof), and (iii) the Indebtedness secured thereby is
otherwise permitted hereunder;
(q) Liens (not otherwise permitted hereunder) secure
obligations not exceeding (as to Borrowers and all of their Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding and that are subordinate
to the liens and security interests granted to Agent and Lenders pursuant to
this Agreement and the other Financing Agreements pursuant to a subordination
agreement executed by each holder of such liens, in form and substance
reasonably satisfactory to Agent.
Indebtedness. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any Indebtedness, or guarantee,
assume, endorse, or otherwise become responsible for (directly or indirectly),
the Indebtedness of any other Person, except:
(a) the Obligations;
(b) purchase money Indebtedness (including Capital
Leases) arising after the date hereof to the extent secured by purchase money
security interests in Equipment and related assets (including Capital Leases)
and purchase money mortgages on Real Property not to exceed $15,000,000 in the
aggregate at any time outstanding so long as such security interests and
mortgages do not apply to any property of such Borrower, Guarantor or Subsidiary
other than the Equipment, related assets or Real Property so acquired, and the
Indebtedness secured thereby does not exceed the cost of the Equipment, or Real
Property so acquired, as the case may be;
(c) guarantees by any Borrower or Guarantor of the
Obligations of the other Borrowers or Guarantors in favor of Agent for the
benefit of Lenders or other Indebtedness otherwise permitted hereby and
guarantees by Subsidiaries of Parent (other than Borrowers) of Indebtedness
permitted hereunder of any other Subsidiary of Parent;
(d) the Indebtedness of Parent or any of its Subsidiaries
to Parent or any of its Subsidiaries arising after the date hereof pursuant to
loans by any Borrower or Guarantor permitted under Section 9.10 hereof;
(e) unsecured Indebtedness of Parent or any of its
domestic Subsidiaries arising after the date hereof to any third person,
provided, that, each of the following conditions is satisfied as determined by
Agent in good faith: (i) such Indebtedness shall be subject and subordinate in
right of payment to the right of Agent and Lenders to receive the prior
indefeasible payment and satisfaction in full of all of the Obligations on terms
and conditions substantially similar to those contained in the New Notes or
pursuant to the terms of a subordination agreement between Agent and such third
party, in form and substance reasonably satisfactory to Agent, (ii) the terms of
such Indebtedness shall provide that no payments of
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principal or cash interest shall be made or accepted on account of such
subordinated Indebtedness prior to the indefeasible payment and satisfaction in
full of all Obligations, (iii) Agent shall have received not less than ten (10)
days prior written notice of the intention of such Borrower or Guarantor to
incur such Indebtedness, which notice shall set forth in reasonable detail
satisfactory to Agent the amount of such Indebtedness, the anticipated range of
interest rate, the schedule of repayments (subject in all events, however, to
subsection (e)(i) immediately above) and maturity date with respect thereto,
which shall be at least six (6) months after the scheduled maturity of the New
Notes, and such other information as Agent may reasonably request with respect
thereto, (iv) Agent shall have received true, correct and complete copies of all
agreements, documents and instruments evidencing or otherwise related to such
Indebtedness, and (v) as of the date of incurring such Indebtedness and after
giving effect thereto, no Default or Event of Default shall have occurred; and
provided further that (x) all of the proceeds of the loans or other
accommodations giving rise to such Indebtedness shall be, as set forth in
Section 6.4, either used by Borrowers or remitted to Agent for application to
the Obligations, (y) such Borrower and Guarantor shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or
any agreement, document or instrument related thereto, except, that, such
Borrower or Guarantor may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so as to extend the maturity thereof, or to
forgive or cancel any portion of such Indebtedness (other than pursuant to
payments thereof), or to reduce the interest rate or any fees in connection
therewith, or in any other manner not adverse to Lenders as determined by Agent
in good faith, (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness (except pursuant to regularly scheduled payments permitted herein),
or set aside or otherwise deposit or invest any sums for such purpose, and (z)
Borrowers and Guarantors shall furnish to Agent all notices or demands in
connection with such Indebtedness either received by any Borrower or Guarantor
or on its behalf relating to any event of default or acceleration of obligations
outstanding thereunder, promptly after the receipt thereof, or sent by any
Borrower or Guarantor or on its behalf concurrently with the sending thereof, as
the case may be;
(f) the Indebtedness owing with respect to the Term Loan
Debt and the New Notes and any refinancings, refundings, extensions, renewals or
replacements thereof to the extent permitted by this Agreement (provided that no
such refinancing, refunding, extension, renewal or replacements increase the
principal amount thereof); provided, that, (i) Borrowers and Guarantors may,
except as otherwise provided herein, (A) with respect to the Term Loan Debt,
make regularly scheduled payments of interest in respect of such Indebtedness in
accordance with the terms of the Term Loan Documents as in effect on the date
hereof, or as otherwise amended as permitted hereunder, and (B) with respect to
the New Notes, so long as no Event of Default exists and is continuing, make
regularly scheduled payments of interest in respect of such Indebtedness in
accordance with the terms of the New Notes Indenture, as in effect on the date
hereof, or as otherwise amended as permitted hereunder, (ii) Borrowers and
Guarantors shall not, directly or indirectly, (A) except as expressly otherwise
provided in the Term Loan Intercreditor Agreement amend, modify, alter or change
the terms of such Indebtedness, the Term Loan Documents, the New Notes
Indenture, the New Notes or any other agreement, document or instrument related
thereto as in effect on the date hereof, except, that, Borrowers and Guarantors
may, after prior written notice to Agent, amend, modify, alter or change the
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terms thereof so as to extend the maturity thereof, or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or in any other manner that
is not adverse to Agent and Lenders, as determined by Agent in good faith, or
(B) except as provided herein, redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and (iii) Borrowers and Guarantors shall furnish to Agent all
notices or demands relating to an event of default under or acceleration of the
maturity of such Indebtedness either received by any Borrower or Guarantor or on
its behalf, promptly after the receipt thereof, or sent by any Borrower or
Guarantor or on its behalf, concurrently with the sending thereof, as the case
may be. Except as permitted pursuant to Sections 6.4(c), (d) and (e) or
otherwise hereunder, Borrowers shall not make prepayments of principal with
respect to the Term Loan Debt and/or the New Notes and any refinancings,
refundings, extensions, renewals or replacements thereof. Borrowers shall
provide Agent with written notice of any such prepayment made by Borrowers,
concurrently with the making of such prepayment;
(g) Indebtedness for borrowed money incurred by
Borrowers' and Guarantors' foreign Subsidiaries in connection with a stand-alone
credit facility and/or any overdraft facility that may be established by
Borrowers' and Guarantors' foreign Subsidiaries after the date hereof, in an
aggregate principal amount outstanding not to exceed $10,000,000 (a "Permitted
Foreign Subsidiary Credit Facility"), and unsecured guarantees by Borrowers and
Guarantors with respect to such Permitted Foreign Subsidiary Credit Facility;
provided, that, any such guarantee of a Permitted Foreign Subsidiary Credit
Facility shall be subject and subordinated in right of payment to the right of
Agent and Lenders to receive the prior indefeasible payment and satisfaction in
full of all of the Obligations pursuant to the terms of a subordination
agreement between Agent and the lenders providing such Permitted Foreign Credit
Facility, in form and substance reasonably satisfactory to Agent;
(h) other Indebtedness set forth in the Information
Certificate and any refinancings, refundings, extensions, renewals or
replacements thereof (provided that no such refinancing, refunding, extension,
renewal or replacements shall increase the principal amount thereof, except as
otherwise permitted by this Agreement);
(i) unsecured Indebtedness under any Hedging Agreement of
any Borrower entered into in the ordinary course of business;
(j) Indebtedness of any foreign Subsidiary of Borrowers
arising from agreements with Governmental Authorities of any foreign country, or
political subdivision or agency thereof, relating to the construction of plants
and the purchase and installation (including related training costs) of
equipment to be used in a business which is the same as or reasonably related to
any of the businesses of any Borrower and its Subsidiaries on the date hereof,
as reasonably determined by the board of directors of the Parent or the
determining Subsidiary of the Parent; provided that such Indebtedness in the
aggregate does not exceed $7,500,000 outstanding at any one time;
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(k) Indebtedness of Parent or any of its Subsidiaries not
otherwise permitted hereby in an aggregate principal amount not to exceed
$5,000,000 outstanding in the aggregate at any one time, provided that, if such
Indebtedness is secured, such Indebtedness may only be incurred in accordance
with the provisions of Section 9.8(q);
(l) contingent obligations of, or guarantees by, Parent or any
of its Subsidiaries (other than Borrowers) with respect to any Indebtedness
which would constitute Indebtedness permitted hereunder for Parent or such
Subsidiary if incurred directly by Parent or such Subsidiary; and
(m) Indebtedness assumed by Parent or any Subsidiary of Parent
in connection with any Permitted Acquisition to the extent that the direct
incurrence of such Indebtedness is otherwise permitted hereunder.
9.10 Loans, Investments, Etc. Each Borrower and Guarantor shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, make
any loans or advance money or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase the Capital Stock
of any other Person or Indebtedness of any other Person or all or a substantial
part of the assets or property of any Person or business unit or division, or
form or acquire any Subsidiaries, except:
(a) the endorsement of instruments for collection or deposit
in the ordinary course of business;
(b) investments in cash or Cash Equivalents, provided, that,
the terms and conditions of Section 5.2 hereof shall have been satisfied with
respect to the deposit account, investment account or other account in which
such cash or Cash Equivalents are held;
(c) the existing equity investments of Parent and each of its
Subsidiaries as of the date hereof in their respective Subsidiaries, provided,
that, no Borrower or Guarantor shall have any further obligations or liabilities
to make any capital contributions or other additional investments or other
payments to or in or for the benefit of any of such Subsidiaries;
(d) loans and advances by Parent or any of its Subsidiaries to
officers, directors and employees of such Person not to exceed the principal
amount of $500,000 in the aggregate at any time outstanding for: (i) reasonably
and necessary work-related travel or other ordinary business expenses to be
incurred by such employee in connection with their work for such Borrower or
Guarantor and (ii) reasonable and necessary relocation expenses of such
employees (including home mortgage financing for relocated employees);
(e) stock or debt obligations issued to Parent or any of its
Subsidiaries by any Person (or the representative of such Person) or any other
property distributed to Parent or any of its Subsidiaries in respect of
Indebtedness of such Person owing to Parent or any of its Subsidiaries in
connection with the insolvency, bankruptcy, receivership or reorganization of
such Person or a composition or readjustment of the debts of such Person;
provided, that, the original of any such stock or instrument that is held by
Borrowers or Guarantors evidencing such
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obligations with a value in excess of $250,000 shall be promptly delivered to
Agent, upon Agent's reasonable request, together with such stock power,
assignment or endorsement by such Borrower or Guarantor as Agent may reasonably
request or such other property is made part of the Collateral;
(f) obligations of account debtors to Parent or any of its
Subsidiaries arising from Accounts which are past due evidenced by a promissory
note made by such account debtor payable to Parent or any of its Subsidiaries;
provided, that, promptly upon any Borrower's or Guarantor's receipt of the
original of any such promissory note with a face principal amount in excess of
$250,000, such promissory note shall be endorsed to the order of Agent by such
Borrower or Guarantor and promptly delivered to Agent as so endorsed;
(g) loans by a Borrower or Guarantor to another Borrower or
Guarantor after the date hereof, provided, that:
(i) as to all of such loans, (A) within thirty (30)
days after the end of each fiscal month, Borrowers shall provide to Agent a
report in form and substance reasonably satisfactory to Agent of the outstanding
amount of such loans as of the last day of the immediately preceding month and
indicating any loans made and payments received during the immediately preceding
month, (B) the Indebtedness arising pursuant to any such loan shall not be
evidenced by a promissory note or other instrument, unless the single original
of such note or other instrument is promptly delivered to Agent upon its request
to hold as part of the Collateral, with such endorsement and/or assignment by
the payee of such note or other instrument as Agent may require, and (C) as of
the date of any such loan and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing,
(ii) as to loans by a Guarantor to a Borrower, (A)
the Indebtedness arising pursuant to such loan shall be subject to, and
subordinate in right of payment to, the right of Agent and Lenders to receive
the prior final payment and satisfaction in full of all of the Obligations on
terms and conditions acceptable to Agent, and (B) such Borrower shall not,
directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness prior to the end of the term of this Agreement;
(iii) as to loans by Borrowers and Guarantors other
than Parent to Parent, the Indebtedness arising pursuant to such loan shall be
(A) for the purpose of payment of interest and prepayment of principal with
respect to the Term Loan Debt and the New Notes to the extent permitted
hereunder and/or (B) for the purpose of payment by Parent of consolidated tax
obligations and, to the extent permitted by Section 9.12(b), for general
corporate overhead, provided that as of the date of any such loan that is made
for such purpose of prepayment of principal with respect to the Term Loan Debt
and/or the New Notes, and after giving effect thereto, no Trigger Event shall
have occurred and be continuing;
(iv) as to loans by Borrowers to a Person that
becomes a Guarantor after the date hereof (which Person shall be organized
within the United States of America), as of the date of any such loan and after
giving effect thereto, (A) the Borrowers' Excess Availability shall be not less
than $20,000,000 (or such lesser amount as Agent shall agree to in writing, in
Agent's good
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faith determination) and (B) no Default or Event of Default shall exist on the
date of any such loan and after giving effect thereto;
(h) investments (including loans) after the date hereof by
Borrowers to or in Subsidiaries of Borrowers that are not Borrowers in an
aggregate amount not to exceed an amount equal to (i) $15,000,000, minus (ii)
the then outstanding principal amount of loans permitted under Section
9.7(b)(xv) plus (iii) the amount of cash received by Borrowers or Guarantors
from such Subsidiaries as repayments, dividends or as proceeds of the sale or
liquidation of, or any other return of capital with respect to, any such
investment (or any existing investment of Guarantors or Borrowers in any such
Subsidiary); provided, however, that, with respect to such investments
(including loans) in excess of an aggregate amount of $2,000,000, no Trigger
Event has occurred or is continuing;
(i) loans or other investments by Subsidiaries of Borrowers
that are not Borrowers to or in other Subsidiaries of Borrowers that are not
Borrowers;
(j) loans or advances to or investments in Borrowers by
Subsidiaries of Borrowers that are not Borrowers; provided that the repayment of
such loans, advances and/or investments are subordinated to the prior payment in
full of the Obligations pursuant to a subordination agreement in form and
substance reasonably satisfactory to Agent;
(k) extensions of trade credit in the ordinary course of
Borrowers' business;
(l) loans, advances and investments not otherwise expressly
permitted hereunder in an aggregate amount not to exceed $2,000,000 outstanding
at any one time or funded with Net Cash Proceeds of Equity Issuances without any
limitation as to amount thereof in the case of loans to and investments in
domestic Subsidiaries and in an aggregate amount not to exceed $50,000,000
during the term of this Agreement for such loans to and investments in foreign
Subsidiaries, provided that, as of the date of any such loan or investment and
after giving effect thereto, to the extent that such loan or investment will be
funded with Net Cash Proceeds arising from sources other than an Equity
Issuance, (i) Borrowers' Excess Availability shall not be less than $20,000,000
and (ii) no Default or Event of Default shall have occurred and be continuing;
(m) the loans and advances and other investments set forth on
Schedule 9.10 to the Information Certificate; provided, that, as to such loans
and advances, Borrowers and Guarantors shall not, directly or indirectly, amend,
modify, alter or change the terms of such loans and advances or any agreement,
document or instrument related thereto in any manner adverse to Lenders, in
Agent's good faith determination, and Borrowers and Guarantors shall furnish to
Agent all notices or demands in connection with any event of default under or
acceleration of the maturity of such loans and advances either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;
(n) so long as no Default or Event of Default has occurred and
is continuing and shall not have occurred after giving effect to any of the
transactions otherwise permitted pursuant to this Section 9.10(n), Parent and
any of its Subsidiaries may acquire all or a substantial part of
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the assets or property or Capital Stock of any Person or any business unit or
division (the "Target"), subject to the satisfaction of each of the following
conditions (in each case, a "Permitted Acquisition"):
(i) Agent shall receive at least 15 Business Days'
prior written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) the Target's assets shall only comprise a
business of the type engaged in by Borrowers as of the date hereof or ancillary
businesses reasonably related to the business engaged in by Borrowers as of the
date hereof;
(iii) the total cash and noncash consideration
(including, without limitation, assumption of Indebtedness) for all Permitted
Acquisitions under this clause (n) shall not exceed $75,000,000 in the aggregate
during the term of this Agreement;
(iv) subject to the limitation in clause (ii)
immediately above, Parent and any of its Subsidiaries may utilize up to
$35,000,000 of the Net Cash Proceeds of any Debt Issuance, any and all proceeds
of any Equity Issuance and, so long as Average Thirty Day Excess Availability is
greater than $20,000,000, up to $35,000,000 of other cash and/or Revolving
Loans, to consummate such proposed Permitted Acquisition;
(v) the Target shall have pro forma projected EBITDA
of at least $-0- for the four (4) fiscal quarters following the date of the
Permitted Acquisition, as determined by the board of directors of Administrative
Borrower Representative, calculation of which shall be reasonably acceptable to
Agent;
(vi) at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority perfected security interest
and lien (subject to security interests and liens permitted pursuant to Section
9.8) in all assets (to the extent the same are acquired by a Borrower or
Guarantor as of the date of such Permitted Acquisition) or Capital Stock of the
Target on the same terms and conditions set forth in Article 5 and the Target
shall have executed such documents and taken such actions as may be reasonably
required by Agent in connection therewith;
(vii) Concurrently with delivery of the notice
referred to in clause (i) above, Borrowers shall have delivered to Agent, in
form and substance satisfactory to Agent, a pro forma consolidated balance
sheet, income statement and cash flow statement of Parent and its Subsidiaries,
based on recent financial statements and assumptions believed by the Borrowers
to be reasonable at the time made;
(viii) on or prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance reasonably
satisfactory to Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent; and
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(ix) concurrently with consummation of the Permitted
Acquisition under this Section 9.10(n), Administrative Borrower Representative
shall have delivered to Agent a certificate stating that the foregoing
conditions have been satisfied.
Notwithstanding the foregoing, the Accounts, Inventory, Equipment and Real
Property of the Target shall not be included in the Borrowing Base without the
prior written consent of Agent and Required Lenders;
(o) loans by Subsidiaries that are organized outside of the
United States of America to Borrowers and Guarantors, provided that: (i) the
Indebtedness arising pursuant to such loan shall be subject to, and subordinate
in right of payment to, the right of Agent and Lenders to receive the prior
final payment and satisfaction in full of all of the Obligations on terms and
conditions acceptable to Agent, and (ii) Borrowers and Guarantors shall not,
directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness prior to the end of the term of this Agreement; and
(p) no first-tier Subsidiary of a Borrower or Guarantor that
is treated as a disregarded entity for U.S. federal income tax purposes and that
owns directly or indirectly any Capital Stock of a "controlled foreign
corporation" (as described in Section 957 of the Code) shall own any assets
except, or engage in any business other than the ownership of, the Capital Stock
of such controlled foreign corporations or of another Person the only assets and
business of which are the ownership of the Capital Stock of controlled foreign
corporations.
9.11 Dividends and Redemptions. Each Borrower and Guarantor shall not,
directly or indirectly, declare or pay any dividends on account of any shares of
class of any Capital Stock of such Borrower or Guarantor now or hereafter
outstanding, or set aside or otherwise deposit or invest any sums for such
purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of
any class of Capital Stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any consideration or apply or set apart any sum, or make
any other distribution (by reduction of capital or otherwise) (each a
"Restricted Payment") in respect of any such shares or agree to do any of the
foregoing, except that:
(a) any Borrower or Guarantor may make Restricted Payments for
consideration in the form of shares of common stock (so long as after giving
effect thereto no Change of Control or other Default or Event of Default shall
exist or occur);
(b) Borrowers and Guarantors may make Restricted Payments to
the extent permitted in Section 9.12 below;
(c) any Subsidiary of a Borrower or Guarantor may make
Restricted Payments to a Borrower; and
(d) Borrowers and Guarantors may make Restricted Payments in
respect of Capital Stock consisting of common stock held by employees pursuant
to any employee stock ownership plan thereof upon the termination, retirement or
death of any such employee in accordance with the provisions of such plan,
provided, that, as to any such repurchase, each of the following
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conditions is satisfied: (i) as of the date of the payment for such repurchase
and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing, (ii) such Restricted Payments shall be paid with
funds legally available therefor, (iii) such Restricted Payments shall not
violate any material law or regulation or the terms of any indenture, agreement
or undertaking to which such Borrower or Guarantor is a party or by which such
Borrower or Guarantor or its or their property are bound, and (iv) the aggregate
amount of all such Restricted Payments in any calendar year shall not exceed
$1,000,000.
9.12 Transactions with Affiliates. Except as otherwise expressly
permitted in this Agreement, each Borrower and Guarantor shall not, directly or
indirectly:
(a) purchase, acquire or lease any property from, or sell,
transfer or lease any property to, any officer, director or other Affiliate of
such Borrower or Guarantor, except in the ordinary course of and pursuant to the
reasonable requirements of such Borrower's or Guarantor's business (as the case
may be) and upon fair and reasonable terms no less favorable to such Borrower or
Guarantor than such Borrower or Guarantor would obtain in a comparable arm's
length transaction with an unaffiliated person; or
(b) make any payments (whether by dividend, loan or otherwise)
of management, consulting or other fees for management or similar services, or
of any Indebtedness owing to any officer, employee, shareholder, director or any
other Affiliate of such Borrower or Guarantor, except: (i) reasonable
compensation to officers, employees and directors for services rendered to such
Borrower or Guarantor in the ordinary course of business, (ii) payments by any
such Borrower or Guarantor to Parent for actual and necessary reasonable
out-of-pocket legal and accounting, insurance, marketing, payroll and similar
types of services paid for by Parent on behalf of such Borrower or Guarantor, in
the ordinary course of their respective businesses or as the same may be
directly attributable to such Borrower or Guarantor, and for the payment of
taxes by or on behalf of Parent, and (iii) payments by Borrowers to Parent to
pay fees, interest and principal with respect to the Term Loan Debt and the New
Notes to the extent permitted by Section 9.10(g)(iii). Notwithstanding anything
to the contrary contained in any Financing Agreement, Parent and its
Subsidiaries may make payments in respect of any Indebtedness and obligations
(other than the Obligations) held by any of Borrowers' Affiliates if and to the
extent that (A) Parent and its Subsidiaries are not prohibited hereunder from
incurring such Indebtedness and (B) Parent and its Subsidiaries would be
permitted to pay Persons that are not Affiliates holding similar Indebtedness
and obligations, free of any restriction, limitation or condition; and such
Affiliates shall for all purposes under the Financing Agreement be treated as if
they were not Affiliates of Borrowers, insofar as their receipt of payment of
such Indebtedness and obligations is concerned.
9.13 Compliance with ERISA. Each Borrower and Guarantor shall, and
shall cause each of its ERISA Affiliates, to: (a) maintain each Plan in
compliance in all respects with the applicable provisions of ERISA, the Code and
other Federal and State law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) not terminate any
of such Plans so as to incur any liability to the Pension Benefit Guaranty
Corporation; (d) not allow or suffer to exist any prohibited transaction
involving any of such
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Plans or any trust created thereunder which would subject such Borrower,
Guarantor or such ERISA Affiliate to a tax or penalty or other liability on
prohibited transactions imposed under Section 4975 of the Code or ERISA; (e)
make all required contributions to any Plan which it is obligated to pay under
Section 302 of ERISA, Section 412 of the Code or the terms of such Plan; (f) not
allow or suffer to exist any accumulated funding deficiency, whether or not
waived, with respect to any such Plan; or (g) allow or suffer to exist any
occurrence of a reportable event or any other event or condition which presents
a risk of termination by the Pension Benefit Guaranty Corporation of any such
Plan that is a single employer plan, which termination could result in any
liability to the Pension Benefit Guaranty Corporation, except to the extent that
any of the above could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
9.14 End of Fiscal Years; Fiscal Quarters. Except as approved by Agent
(such approval not to be unreasonably delayed or withheld), each Borrower and
Guarantor shall, for financial reporting purposes, cause its, and each of its
Subsidiaries' (a) fiscal years to end on December 31 of each year and (b) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.
9.15 Change in Business. Each Borrower and Guarantor shall not engage
in any business other than the business of such Borrower or Guarantor on the
date hereof and any business reasonably related, ancillary or complementary to
the business in which such Borrower or Guarantor is engaged on the date hereof.
9.16 Limitation of Restrictions Affecting Subsidiaries. Each Borrower
and Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any consensual encumbrance or restriction which prohibits or
limits the ability of any Subsidiary of such Borrower or Guarantor to (a) pay
dividends or make other distributions or pay any Indebtedness owed to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make
loans or advances to such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (c) transfer any of its properties or assets to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (d)
create, incur, assume or suffer to exist any lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than
encumbrances and restrictions arising under (i) applicable law, (ii) this
Agreement, (iii) the Term Loan Documents, (iv) the New Notes Indenture, (v)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (vi) customary restrictions on dispositions of real
property interests found in reciprocal easement agreements of such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor, (vii) any agreement
relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or
Guarantor prior to the date on which such Subsidiary was acquired by such
Borrower or such Guarantor and outstanding on such acquisition date and
refinancings, refundings, extensions, renewals or replacements thereof permitted
hereunder (provided that no such refinancing, refunding, extension, renewal or
replacement shall increase the principal amount thereof), and (viii) the
extension or continuation of contractual obligations in existence on the date
hereof; provided, that, any such encumbrances or restrictions contained in such
extension or continuation are no less favorable to Agent and
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Lenders than those encumbrances and restrictions under or pursuant to the
contractual obligations so extended or continued.
9.17 Fixed Charge Coverage Ratio. If at any time (a) Borrowers' average
Excess Availability for the immediately preceding fiscal month was less than
$20,000,000 or (b) any Default or Event of Default shall have occurred and be
continuing (the occurrence of either of the foregoing being herein referred to
as a "Covenant Compliance Trigger"), then, commencing with the first fiscal
month immediately preceding the Covenant Compliance Trigger in which Agent has
received the monthly financial statements required to be delivered under Section
9.6(a)(i) hereof, and for each fiscal month thereafter until average Excess
Availability for the immediately preceding fiscal month is more than $20,000,000
and no Default or Event of Default exists, Parent and its Subsidiaries shall
maintain a Fixed Charge Coverage Ratio of not less than 1.0:1.0. The Fixed
Charge Coverage Ratio shall be calculated monthly.
9.18 Lender Meetings. Borrowers shall, upon no less than thirty (30)
days advance notice by Agent or the Required Lenders, participate in a meeting
of Agent and Lenders once during each fiscal year (or at any time upon advance
notice by Agent or Required Lenders upon the occurrence and continuation of an
Event of Default), to be held at locations and at times reasonably requested by
Agent (or if applicable, Required Lenders).
9.19 License Agreements. Each Borrower and Guarantor shall (a) promptly
and faithfully observe and perform all of the material terms, covenants,
conditions and provisions of the License Agreements constituting Material
Contracts to which it is a party to be observed and performed by it, at the
times set forth therein, if any, (b) not do, permit, suffer or refrain from
doing anything that could reasonably be expected to result in a default under or
breach of any of the terms of any material License Agreement, (c) not cancel,
surrender, modify, amend, waive or release any material License Agreement in any
material respect or any term, provision or right of the licensee thereunder in
any material respect, or consent to or permit to occur any of the foregoing;
except, that, such Borrower or Guarantor may cancel, surrender or release any
material License Agreement in the ordinary course of the business of such
Borrower or Guarantor; provided, that, such Borrower or Guarantor (as the case
may be) shall give Agent not less than thirty (30) days prior written notice of
its intention to so cancel, surrender and release any such material License
Agreement, (d) give Agent prompt written notice of any material License
Agreement entered into by such Borrower or Guarantor after the date hereof,
together with a true, correct and complete copy thereof and such other
information with respect thereto as Agent may request, (e) give Agent prompt
written notice of any material breach of any obligation, or any default, by any
party under any material License Agreement, and deliver to Agent (promptly upon
the receipt thereof by such Borrower or Guarantor in the case of a notice to
such Borrower or Guarantor and concurrently with the sending thereof in the case
of a notice from such Borrower or Guarantor) a copy of each notice of default
and every other notice and other communication received or delivered by such
Borrower or Guarantor in connection with any material License Agreement which
relates to the right of such Borrower or Guarantor to continue to use the
property subject to such License Agreement, and (f) furnish to Agent, promptly
upon the request of Agent, such information and evidence as Agent may reasonably
require from time to time concerning the observance, performance and compliance
by such
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Borrower or Guarantor or the other party or parties thereto with the material
terms, covenants or provisions of any material License Agreement.
9.20 After Acquired Real Property. If any Borrower or Guarantor
hereafter acquires any fee interest in Real Property, fixtures or any other
property that is of the kind or nature described in the Mortgages and such Real
Property, fixtures or other property is adjacent to, contiguous with or
necessary or related to or used in connection with any Real Property then
subject to a Mortgage, or if such Real Property is not adjacent to, contiguous
with or related to or used in connection with such Real Property, then if such
Real Property, fixtures or other property at any location (or series of
adjacent, contiguous or related locations, and regardless of the number of
parcels) has a fair market value in an amount equal to or greater than $250,000,
individually, or greater than $500,000 in the aggregate for all such Real
Property (or if a Default or Event of Default exists, then regardless of the
fair market value of such assets), without limiting any other rights of Agent or
any Lender, or duties or obligations of any Borrower or Guarantor, promptly upon
Agent's request, such Borrower or Guarantor shall execute and deliver to Agent a
mortgage, deed of trust or deed to secure debt, as Agent may determine, in form
and substance substantially similar to the Mortgages and as to any provisions
relating to specific state laws reasonably satisfactory to Agent and in form
appropriate for recording in the Real Property records of the jurisdiction in
which such Real Property or other property is located granting to Agent a first
priority lien and mortgage on and security interest in such Real Property,
fixtures or other property (subject only to then existing liens and liens that
are permitted to exist or be incurred hereunder or under the Mortgages or as
otherwise consented to in writing by Agent) and such other agreements, documents
and instruments as Agent may reasonably require in connection therewith.
Notwithstanding the foregoing, Agent shall not require Borrowers and Guarantors
to comply with this Section 9.20 with respect to any particular fee interest
Real Property acquired after the date hereof if the cost associated with
obtaining a Mortgage on or Agent's perfection of its Mortgage on such Real
Property is excessive in relation to the value of such Real Property, as
determined by Agent in good faith.
9.21 Costs and Expenses. Subject to Section 11.5 hereof, Borrowers and
Guarantors shall pay to Agent on demand all documented out-of-pocket costs,
expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, syndication,
administration, collection, liquidation, enforcement and defense of the
Obligations, Agent's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and fees, documentary
taxes, intangibles taxes and mortgage recording taxes and fees, if applicable);
(b) costs and expenses and fees for insurance premiums, environmental audits,
title insurance premiums, surveys, assessments, engineering reports and
inspections, appraisal fees and search fees, costs and expenses of remitting
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the Blocked Accounts, together with Agent's customary charges
and fees with respect thereto; (c) charges, fees or expenses charged by any bank
or issuer in connection with the Letter of Credit Accommodations; (d) reasonable
out-of-pocket costs and expenses of
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preserving and protecting the Collateral; (e) reasonable out-of-pocket costs and
expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the security interests and liens of Agent, selling or
otherwise realizing upon the Collateral, and otherwise enforcing the provisions
of this Agreement and the other Financing Agreements or defending any claims
made or threatened against Agent or any Lender arising out of the transactions
contemplated hereby (limited to one (1) outside counsel to Agent and Lenders
prior to the occurrence of a Default or Event of Default that is continuing) and
thereby (including preparations for and consultations concerning any such
matters), subject, however to Section 10.2(i); (f) all reasonable out-of-pocket
expenses and costs heretofore and from time to time hereafter incurred by Agent
during the course of periodic field examinations of the Collateral and such
Borrower's or Guarantor's operations, plus a per diem charge at Agent's then
standard rate for Agent's examiners in the field and office (which rate as of
the date hereof is $1,000 per person per day); and (g) the reasonable fees and
disbursements of outside counsel (including legal assistants) to Agent in
connection with any of the foregoing (limited to one (1) outside counsel to
Agent and Lenders so long as no Default or Event of Default has occurred and is
continuing).
9.22 Further Assurances. At the reasonable request of Agent at any time
and from time to time, Borrowers and Guarantors shall, at their expense, duly
execute and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further
acts as may be reasonably necessary or proper to evidence, perfect, maintain and
enforce the security interests and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Financing Agreements. As a condition to any request by Borrowers for Loans
or Letter of Credit Accommodations, Agent may request a certificate from an
officer of any Borrower or Guarantor representing that all conditions precedent
to the making of Loans and providing Letter of Credit Accommodations contained
herein are satisfied. In the event of such request by Agent, Agent and Lenders
may, at Agent's option, cease to make any further Loans or provide any further
Letter of Credit Accommodations until Agent has received such certificate and,
in addition, Agent has determined in good faith that such conditions are
satisfied.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) any Borrower fails to pay any of the Obligations
within three (3) days of the date when due or (ii) any Borrower or Guarantor
fails to perform any of the covenants contained in Sections 7.1(a) (excluding
Section 7.1(a)(ii)(E)), 8.2(c), 9.2, 9.3(b), 9.4, 9.6, 9.7(a)(i)(A), 9.14 and
9.22 of this Agreement and such failure shall continue for ten (10) days; or
(iii) any Borrower or Guarantor fails to perform any of the covenants contained
in Sections 7.2, 7.3, 7.4, 9.3(a), 9.3(c), 9.13, 9.19 and 9.20 of this Agreement
and such failure shall continue for twenty (20) days; or (iv) any Borrower or
Obligor fails to perform any of the terms, covenants, conditions or provisions
contained in this Agreement or any pledge agreement, security
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agreement or guaranty now or hereafter executed and delivered by any Borrower or
Guarantor in favor of Agent and/or Lenders, other than those described in
Sections 10.1(a)(i), 10.1(a)(ii) and 10.1(a)(iii);
(b) any representation, warranty or statement of fact made by
any Borrower or Guarantor to Agent in this Agreement or in the other Financing
Agreements shall when made or deemed made be false or misleading in any material
respect;
(c) any Guarantor revokes or terminates or purports to revoke
or terminate or fails to perform (after expiration of any applicable grace
period) any of the terms, covenants, conditions or provisions of any guarantee,
endorsement or other Financing Agreement of such party in favor of Agent or any
Lender;
(d) any judgment for the payment of money is rendered against
any Borrower or Guarantor in excess of $2,500,000 in any one case (a "Single
Judgment") or in excess of $5,000,000 in the aggregate (Aggregate Judgment") (to
the extent not covered by insurance where the insurer has assumed responsibility
in writing for such judgment) and shall remain undischarged or unvacated or
unstayed for a period in excess of sixty (60) days or execution shall at any
time not be effectively stayed; except that, no Event of Default shall have
occurred pursuant to this Section 10.1(d) if (i) a Single Judgment is rendered
against any Borrower or Obligor in excess of $2,500,000, but less than
$5,000,000, and after giving effect to a Reserve established by Agent with
respect to such Single Judgment, in an amount equal to 100% thereof, Borrowers
have Excess Availability in excess of $20,000,000 or (ii) Aggregate Judgments
are rendered against any Borrower or Guarantor in excess of $5,000,000, but less
than $7,500,000, and after giving effect to a Reserve established by Agent with
respect to such Aggregate Judgments, in an amount equal to 100% thereof,
Borrowers have Excess Availability in excess of $20,000,000;
(e) any Borrower or any Guarantor, which is a partnership,
limited liability company, limited liability partnership or a corporation,
dissolves or suspends or discontinues doing business, except as otherwise
expressly permitted by this Agreement;
(f) any Borrower or Guarantor makes a general assignment for
the benefit of creditors, makes or sends notice of a bulk transfer as part of a
general assignment for the benefit of creditors or calls a meeting of its
creditors or principal creditors in connection with a moratorium or adjustment
of the Indebtedness due to them;
(g) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect, other than the Chapter 11
Case, or under any insolvency, reorganization, receivership, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity) is filed against any Borrower
or Obligor or all or any material part of its properties and such petition or
application is not dismissed within sixty (60) days after the date of its filing
or any Borrower or Obligor shall file any answer admitting or not contesting
such petition or application or indicates in writing its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;
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(h) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by any Borrower or Guarantor or for all or any part of its
property;
(i) any material default in respect of the Term Loan
Documents, the New Notes or the New Notes Indenture or any other Indebtedness of
any Borrower or Guarantor (other than Indebtedness owing to Agent and Lenders
hereunder), in any case in an amount in excess of $5,000,000, which default
continues for more than the applicable cure period, if any, with respect thereto
and permits the Term Lenders, holders of the New Notes and/or New Notes Trustee
or holders of any such other Indebtedness to accelerate the maturity thereof
and/or is not waived in writing by the other parties thereto;
(j) any material provision hereof or of any of the other
Financing Agreements shall for any reason cease to be valid, binding and
enforceable with respect to any party hereto or thereto (other than Agent) in
accordance with its terms, or any such party shall challenge the enforceability
hereof or thereof, or shall assert in writing, or take any action or fail to
take any action based on the assertion that any provision hereof or of any of
the other Financing Agreements has ceased to be or is otherwise not valid,
binding or enforceable in accordance with its terms, or any security interest
provided for herein or in any of the other Financing Agreements shall cease to
be a valid and perfected first priority security interest in any of the
Collateral purported to be subject thereto (except as otherwise permitted herein
or therein);
(k) an ERISA Event shall occur which results in or could
reasonably be expected to result in liability of any Borrower in an aggregate
amount in excess of $5,000,000; or
(l) any Change of Control;
(m) the indictment by any Governmental Authority of any
Borrower or Guarantor of which any Borrower, Guarantor or Agent receives notice,
as to which there is a reasonable possibility of an adverse determination, in
the good faith determination of Agent, under any criminal statute, or
commencement of criminal or civil proceedings against such Borrower or Obligor,
pursuant to which statute or proceedings the penalties or remedies sought or
available include forfeiture of (i) any of the Collateral having a value in
excess of $2,500,000 or (ii) any other property of any Borrower or Guarantor
which is necessary or material to the conduct of its business;
(n) there shall be a Material Adverse Effect with respect to
the Borrowers and Guarantors taken as a whole; or
(o) any default by Borrowers or Guarantors under the Plan or
the Confirmation Order that continues for more than the applicable cure period,
if any, with respect thereto that has resulted in a Material Adverse Effect.
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10.2 Remedies.
(a) At any time an Event of Default exists or has occurred and
is continuing, Agent and Lenders shall have all rights and remedies provided in
this Agreement, the other Financing Agreements, the UCC and other applicable
law, all of which rights and remedies may be exercised without notice to or
consent by any Borrower or Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Agent and Lenders hereunder, under any of the
other Financing Agreements, the UCC or other applicable law, are cumulative, not
exclusive and enforceable, in Agent's discretion, alternatively, successively,
or concurrently on any one or more occasions, and shall include, without
limitation, the right to apply to a court of equity for an injunction to
restrain a breach or threatened breach by any Borrower or Obligor of this
Agreement or any of the other Financing Agreements. Subject to Section 12
hereof, Agent may, and at the direction of the Required Lenders shall, at any
time or times, proceed directly against any Borrower or Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the generality of the foregoing, at any
time an Event of Default exists or has occurred and is continuing, Agent may, at
its option and shall upon the direction of the Required Lenders, (i) upon notice
to Administrative Borrower Representative, accelerate the payment of all
Obligations and demand immediate payment thereof to Agent for itself and the
benefit of Lenders (provided, that, upon the occurrence of any Event of Default
described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically
become immediately due and payable), and (ii) terminate the Commitments and this
Agreement (provided, that, upon the occurrence of any Event of Default described
in Sections 10.1(g) and 10.1(h), the Commitments and any other obligation of the
Agent or a Lender hereunder shall automatically terminate).
(c) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, Agent may, in its discretion
(i) with or without judicial process or the aid or assistance of others, enter
upon any premises on or in which any of the Collateral may be located and take
possession of the Collateral or complete processing, manufacturing and repair of
all or any portion of the Collateral, (ii) require any Borrower or Obligor, at
Borrowers' expense, to assemble and make available to Agent any part or all of
the Collateral at any place and time designated by Agent, (iii) collect,
foreclose, receive, appropriate, setoff and realize upon any and all Collateral,
(iv) remove any or all of the Collateral from any premises on or in which the
same may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (v) sell, lease, transfer, assign,
deliver or otherwise dispose of any and all Collateral (including entering into
contracts with respect thereto, public or private sales at any exchange,
broker's board, at any office of Agent or elsewhere) at such prices or terms as
Agent may deem reasonable, for cash, upon credit or for future delivery, with
the Agent having the right to purchase the whole or any part of the Collateral
at any such public sale, all of the foregoing being free from any right or
equity of redemption of any Borrower or Obligor, which right or equity of
redemption is hereby expressly waived and released by Borrowers and Obligors
and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased
by Agent upon credit terms or for future delivery, the Obligations shall not be
reduced as a result thereof until payment therefor is finally collected by
Agent. If notice of disposition of Collateral is
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required by law, ten (10) days' prior notice (or such longer time period as may
be required by applicable law) by Agent to Administrative Borrower
Representative designating the time and place of any public sale or the time
after which any private sale or other intended disposition of Collateral is to
be made, shall be deemed to be reasonable notice thereof and Borrowers and
Obligors waive any other notice. In the event Agent institutes an action to
recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, each Borrower and Obligor waives the posting of any bond which might
otherwise be required. At any time an Event of Default exists or has occurred
and is continuing, upon Agent's request, Borrowers will either, as Agent shall
specify, furnish cash collateral to the issuer to be used to secure and fund
Agent's reimbursement obligations to the issuer in connection with any Letter of
Credit Accommodations or furnish cash collateral to Agent for the Letter of
Credit Accommodations. Such cash collateral shall be in the amount equal to one
hundred five (105%) percent of the amount of the Letter of Credit Accommodations
plus the amount of any fees and expenses payable in connection therewith through
the end of the latest expiration date of such Letter of Credit Accommodations.
(d) At any time or times that an Event of Default exists or
has occurred and is continuing, Agent may, in its discretion, enforce the rights
of any Borrower or Obligor against any account debtor, secondary obligor or
other obligor in respect of any of the Accounts or other Receivables. Without
limiting the generality of the foregoing, Agent may, in its discretion, at such
time or times (i) notify any or all account debtors, secondary obligors or other
obligors in respect thereof that the Receivables have been assigned to Agent and
that Agent has a security interest therein and Agent may direct any or all
accounts debtors, secondary obligors and other obligors to make payment of
Receivables directly to Agent, (ii) extend the time of payment of, compromise,
settle or adjust for cash, credit, return of merchandise or otherwise, and upon
any terms or conditions, any and all Receivables or other obligations included
in the Collateral and thereby discharge or release the account debtor or any
secondary obligors or other obligors in respect thereof without affecting any of
the Obligations, (iii) demand, collect or enforce payment of any Receivables or
such other obligations, but without any duty to do so, and Agent and Lenders
shall not be liable for any failure to collect or enforce the payment thereof
nor for the negligence of its agents or attorneys with respect thereto and (iv)
take whatever other action Agent may deem necessary or desirable for the
protection of its interests and the interests of Lenders. At any time that an
Event of Default exists or has occurred and is continuing, at Agent's request,
all invoices and statements sent to any account debtor shall state that the
Accounts and such other obligations have been assigned to Agent and are payable
directly and only to Agent and Borrowers and Obligors shall deliver to Agent
such originals of documents evidencing the sale and delivery of goods or the
performance of services giving rise to any Accounts as Agent may require. In the
event any account debtor returns Inventory when an Event of Default exists or
has occurred and is continuing, Borrowers shall, upon Agent's request, hold the
returned Inventory in trust for Agent, segregate all returned Inventory from all
of its other property, dispose of the returned Inventory solely according to
Agent's instructions, and not issue any credits, discounts or allowances with
respect thereto without Agent's prior written consent.
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(e) To the extent that applicable law imposes duties on Agent
or any Lender to exercise remedies in a commercially reasonable manner (which
duties cannot be waived under such law), each Borrower and Guarantor
acknowledges and agrees that it is not commercially unreasonable for Agent or
any Lender (i) to fail to incur expenses reasonably deemed significant by Agent
or any Lender to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain consents of any Governmental Authority or other third party for
the collection or disposition of Collateral to be collected or disposed of,
(iii) to fail to exercise collection remedies against account debtors, secondary
obligors or other persons obligated on Collateral or to remove liens or
encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other persons, whether or not in the
same business as any Borrower or Guarantor, for expressions of interest in
acquiring all or any portion of the Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Borrower and Guarantor acknowledges that the purpose of this
Section is to provide non-exhaustive indications of what actions or omissions by
Agent or any Lender would not be commercially unreasonable in the exercise by
Agent or any Lender of remedies against the Collateral and that other actions or
omissions by Agent or any Lender shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section. Without limitation of
the foregoing, nothing contained in this Section shall be construed to grant any
rights to any Borrower or Guarantor or to impose any duties on Agent or Lenders
that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this Section.
(f) For the purpose of enabling Agent to exercise the rights
and remedies hereunder, each Borrower and Obligor hereby grants to Agent, to the
extent assignable, an irrevocable, non-exclusive license (exercisable at any
time an Event of Default has occurred and is continuing) without payment of
royalty or other compensation to any Borrower or Obligor, to use, assign,
license or sublicense any of the trademarks, service-marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired by any Borrower or Obligor, wherever the same maybe located,
including in such license reasonable access to all media in which any of the
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licensed items may be recorded or stored and to all computer programs used for
the compilation or printout thereof.
(g) At any time an Event of Default exists or has occurred and
is continuing, Agent may apply the cash proceeds of Collateral actually received
by Agent from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in accordance
with the terms hereof, whether or not then due or may hold such proceeds as cash
collateral for the Obligations. Borrowers and Guarantors shall remain liable to
Agent and Lenders for the payment of any deficiency with interest at the highest
rate provided for herein and all costs and expenses of collection or
enforcement, including reasonable attorneys' fees and expenses.
(h) Without limiting the foregoing, upon the occurrence of a
Default or an Event of Default, (i) Agent and Lenders may, at Agent's option,
and upon the occurrence of an Event of Default at the direction of the Required
Lenders, Agent and Lenders shall, without notice, (A) cease making Loans or
arranging for Letter of Credit Accommodations or reduce the lending formulas or
amounts of Loans and Letter of Credit Accommodations available to Borrowers
and/or (B) terminate any provision of this Agreement providing for any future
Loans or Letter of Credit Accommodations to be made by Agent and Lenders to
Borrowers and (ii) Agent may, at its option, establish such Reserves as Agent
determines, without limitation or restriction, notwithstanding anything to the
contrary contained herein.
(i) Notwithstanding anything to the contrary contained herein,
Borrowers and Guarantors shall not be obligated to pay or reimburse Agent and
Lenders for any costs and expenses (including attorneys' fees and expenses) paid
or incurred in connection with any claims asserted by Agent or any Lender
against Agent or any other Lender, as applicable, arising in connection with,
this Agreement or any other Financing Agreement.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this
Agreement and the other Financing Agreements (except as otherwise provided
therein) and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of New York but excluding any principles of conflicts
of law or other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of New York.
(b) Borrowers, Guarantors, Agent and Lenders irrevocably
consent and submit to the non-exclusive jurisdiction of the Supreme Court of the
State of New York for the County of New York and the United States District
Court for the Southern District of New York, whichever Agent may elect, and
waive any objection based on venue or forum non conveniens with respect to any
action instituted therein arising under this Agreement or any of the other
Financing Agreements or in any way connected with or related or incidental to
the dealings of the parties
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hereto in respect of this Agreement or any of the other Financing Agreements or
the transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree
that any dispute with respect to any such matters shall be heard only in the
courts described above (except that Agent and Lenders shall have the right to
bring any action or proceeding against any Borrower or Guarantor or its or their
property in the courts of any other jurisdiction which Agent deems necessary or
appropriate in order to realize on the Collateral or to otherwise enforce its
rights against any Borrower or Guarantor or its or their property).
(c) Each Borrower and Guarantor hereby waives personal service
of any and all process upon it and consents that all such service of process may
be made by certified mail (return receipt requested) directed to its address set
forth herein and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, or, at Agent's
option, by service upon any Borrower or Guarantor (or Administrative Borrower
Representative on behalf of such Borrower or Guarantor) in any other manner
provided under the rules of any such courts.
(d) BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE. BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT OR ANY
LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(e) Agent and Lenders shall not have any liability to any
Borrower or Guarantor (whether in tort, contract, equity or otherwise) for
losses suffered by such Borrower or Guarantor in connection with, arising out
of, or in any way related to the transactions or relationships contemplated by
this Agreement, or any act, omission or event occurring in connection herewith,
unless it is determined by a final and non-appealable judgment or court order
binding on Agent and such Lender, that the losses were the result of acts or
omissions constituting gross negligence or willful misconduct of Agent or such
Lender. Each Borrower and Guarantor: (i) certifies that neither Agent, any
Lender nor any representative, agent or attorney acting for or on behalf of
Agent or any Lender has represented, expressly or otherwise, that Agent and
Lenders would not, in the event of litigation, seek to enforce any of the
waivers provided for in this Agreement or any of the other Financing Agreements
and (ii) acknowledges that in entering into this Agreement and the other
Financing Agreements, Agent and Lenders are relying upon, among
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other things, the waivers and certifications set forth in this Section 11.1 and
elsewhere herein and therein.
11.2 Waiver of Notices. Each Borrower and Guarantor hereby expressly
waives demand, presentment, protest and notice of protest and notice of dishonor
with respect to any and all instruments and chattel paper, included in or
evidencing any of the Obligations or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever with respect to the
Obligations, the Collateral and this Agreement, except such as are expressly
provided for herein. No notice to or demand on any Borrower or Guarantor which
Agent or any Lender may elect to give shall entitle such Borrower or Guarantor
to any other or further notice or demand in the same, similar or other
circumstances, except such as are expressly provided for herein or such notices
which Borrowers may not waive in accordance with applicable law.
11.3 Amendments and Waivers.
(a) Neither this Agreement nor any other Financing Agreement
nor any terms hereof or thereof may be amended, waived, discharged or terminated
unless such amendment, waiver, discharge or termination is in writing signed by
Agent and the Required Lenders or at Agent's option, by Agent with the
authorization of the Required Lenders, and as to amendments to any of the
Financing Agreements (other than with respect to any provision of Section 12
hereof), by any Borrower; except, that, no such amendment, waiver, discharge or
termination shall:
(i) reduce the interest rate or any fees or extend
the scheduled time of payment of principal, interest or any fees or reduce the
principal amount of any Loan or Letter of Credit Accommodations (it being
understood that the waiver of any mandatory prepayment pursuant to Section 6.4
shall not constitute an extension of the scheduled time of payment of principal,
interest or any fees), in each case without the consent of each Lender directly
affected thereby,
(ii) increase the Commitment of any Lender over the
amount thereof then in effect or provided hereunder (it being understood that
the waiver of any Default, Event of Default, condition precedent to the making
of any Revolving Loan or the issuance of any Letter of Credit Accommodation,
mandatory prepayment or mandatory reduction of Commitments shall not constitute
an increase of the Commitment of any Lender), in each case without the consent
of the Lender directly affected thereby,
(iii) release any Collateral (except as expressly
required or permitted hereunder or under any of the other Financing Agreements
or applicable law and except as permitted under Section 12.11(b) hereof),
without the consent of Agent and all of Lenders,
(iv) reduce any percentage specified in the
definition of Required Lenders, without the consent of Agent and all of Lenders,
(v) consent to the assignment or transfer by any
Borrower or Guarantor of any of their rights and obligations under this
Agreement, without the consent of Agent and all of Lenders, except as otherwise
expressly permitted hereunder,
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(vi) amend, modify or waive any terms of this Section
11.3 hereof, to the extent the substance of this Section is affected, without
the consent of Agent and all of Lenders, or
(vii) increase the advance rates constituting part of
the Borrowing Base or increase the sublimits with respect to Revolving Loans
based on Eligible Inventory or for Letter of Credit Accommodations, without the
consent of Agent and all of Lenders.
(b) Agent and Lenders shall not, by any act, delay, omission
or otherwise be deemed to have expressly or impliedly waived any of its or their
rights, powers and/or remedies unless such waiver shall be in writing and signed
as provided herein. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Agent or any Lender of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right, power and/or remedy which Agent or any Lender would
otherwise have on any future occasion, whether similar in kind or otherwise.
(c) Notwithstanding anything to the contrary contained in
Section 11.3(a) above, in connection with any amendment, waiver, discharge or
termination, in the event that any Lender whose consent thereto is required
shall fail to consent or fail to consent in a timely manner (such Lender being
referred to herein as a "Non-Consenting Lender"), but the consent of any other
Lenders to such amendment, waiver, discharge or termination that is required are
obtained, if any, then Congress shall have the right, but not the obligation, at
any time thereafter, and upon the exercise by Congress of such right, such
Non-Consenting Lender shall have the obligation, to sell, assign and transfer to
Congress or such Eligible Transferee as Congress may specify, the Commitment of
such Non-Consenting Lender and all rights and interests of such Non-Consenting
Lender pursuant thereto. Congress shall provide the Non-Consenting Lender with
prior written notice of its intent to exercise its right under this Section,
which notice shall specify on date on which such purchase and sale shall occur.
Such purchase and sale shall be pursuant to the terms of an Assignment and
Acceptance (whether or not executed by the Non-Consenting Lender), except that
on the date of such purchase and sale, Congress, or such Eligible Transferee
specified by Congress, shall pay to the Non-Consenting Lender (except as
Congress and such Non-Consenting Lender may otherwise agree) the amount equal
to: (i) the principal balance of the Loans held by the Non-Consenting Lender
outstanding as of the close of business on the business day immediately
preceding the effective date of such purchase and sale, plus (ii) amounts
accrued and unpaid in respect of interest and fees payable to the Non-Consenting
Lender to the effective date of the purchase (but in no event shall the
Non-Consenting Lender be deemed entitled to any early termination fee), minus
(iii) the amount of the closing fee received by the Non-Consenting Lender
pursuant to the terms hereof or of any of the other Financing Agreements
multiplied by the fraction, the numerator of which is the number of months
remaining in the then current term of the Credit Facility and the denominator of
which is the number of months in the then current term thereof. Such purchase
and sale shall be effective on the date of the payment of such amount to the
Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall
terminate on such date.
(d) The consent of Agent shall be required for any amendment,
waiver or consent affecting the rights or duties of Agent hereunder or under any
of the other Financing
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Agreements, in addition to the consent of the Lenders otherwise required by this
Section and the exercise by Agent of any of its rights hereunder with respect to
Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an
amendment to the advance rates provided for in this Section 11.3.
11.4 Waiver of Counterclaims. Each Borrower and Guarantor waives all
rights to interpose any claims, deductions, setoffs or counterclaims of any
nature (other then compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.
11.5 Indemnification. Each Borrower and Guarantor shall, jointly and
severally, indemnify and hold Agent and each Lender, and its officers,
directors, agents, employees, advisors and counsel and their respective
Affiliates (each such person being an "Indemnitee"), harmless from and against
any and all losses, claims, damages, liabilities, costs or expenses (including
reasonable attorneys' fees and expenses (to be limited to one (1) outside
counsel to Agent and Lenders so long as no Default or Event of Default has
occurred and is continuing) imposed on, incurred by or asserted against any of
them in connection with any litigation, investigation, claim or proceeding
commenced or threatened in writing related to the negotiation, preparation,
execution, delivery, enforcement, performance or administration of this
Agreement, any other Financing Agreements, or any undertaking or proceeding
related to any of the transactions contemplated hereby or any act, omission,
event or transaction related or attendant thereto, including amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel (to be
limited to one (1) outside counsel to Agent and Lenders so long as no Default or
Event of Default has occurred and is continuing) except that Borrowers and
Guarantors shall not have any obligation under this Section 11.5 to indemnify an
Indemnitee with respect to (a) a matter covered hereby resulting from the gross
negligence or wilful misconduct of such Indemnitee as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction (but without
limiting the obligations of Borrowers or Guarantors as to any other Indemnitee)
or (b) Taxes, the indemnification for which shall be governed by Section 6.11
hereof. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section may be unenforceable because it violates any law or
public policy, Borrowers and Guarantors shall pay the maximum portion which it
is permitted to pay under applicable law to Agent and Lenders in satisfaction of
indemnified matters under this Section. To the extent permitted by applicable
law, no Borrower or Guarantor shall assert, and each Borrower and Guarantor
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any of the other Financing Agreements or any undertaking or
transaction contemplated hereby. All amounts due under this Section shall be
payable upon demand. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
SECTION 12. THE AGENT
12.1 Appointment, Powers and Immunities. Each Lender irrevocably
designates, appoints and authorizes Congress to act as Agent hereunder and under
the other Financing
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Agreements with such powers as are specifically delegated to Agent by the terms
of this Agreement and of the other Financing Agreements, together with such
other powers as are reasonably incidental thereto. Agent (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and in the other Financing Agreements, and shall not by reason of this Agreement
or any other Financing Agreement be a trustee or fiduciary for any Lender; (b)
shall not be responsible to Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any of the other
Financing Agreements, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Financing Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Financing Agreement
or any other document referred to or provided for herein or therein or for any
failure by any Borrower or any Obligor or any other Person to perform any of its
obligations hereunder or thereunder; and (c) shall not be responsible to Lenders
for any action taken or omitted to be taken by it hereunder or under any other
Financing Agreement or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction. Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
Agent may deem and treat the payee of any note as the holder thereof for all
purposes hereof unless and until the assignment thereof pursuant to an agreement
(if and to the extent permitted herein) in form and substance satisfactory to
Agent shall have been delivered to and acknowledged by Agent.
12.2 Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.
12.3 Events of Default.
(a) Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or an Event of Default or other failure of a
condition precedent to the Loans and Letter of Credit Accommodations hereunder,
unless and until Agent has received written notice from a Lender, or a Borrower
specifying such Event of Default or any unfulfilled condition precedent, and
stating that such notice is a "Notice of Default or Failure of Condition". In
the event that Agent receives such a Notice of Default or Failure of Condition,
Agent shall give prompt notice thereof to the Lenders. Agent shall (subject to
Section 12.7) take such action with respect to any such Event of Default or
failure of condition precedent as shall be directed by the Required Lenders to
the extent provided for herein; provided, that, unless and until Agent shall
have
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received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to or by reason of such
Event of Default or failure of condition precedent, as it shall deem advisable
in the best interest of Lenders. Without limiting the foregoing, and
notwithstanding the existence or occurrence and continuance of an Event of
Default or any other failure to satisfy any of the conditions precedent set
forth in Section 4 of this Agreement to the contrary, unless and until otherwise
directed by the Required Lenders, Agent may, but shall have no obligation to,
continue to make Loans and issue or cause to be issued Letter of Credit
Accommodations for the ratable account and risk of Lenders from time to time if
Agent believes making such Loans or issuing or causing to be issued such Letter
of Credit Accommodations is in the best interests of Lenders.
(b) Except with the prior written consent of Agent, no Lender
may assert or exercise any enforcement right or remedy in respect of the Loans,
Letter of Credit Accommodations or other Obligations, as against any Borrower or
Obligor or any of the Collateral or other property of any Borrower or Obligor.
12.4 Congress in its Individual Capacity. With respect to its
Commitment and the Loans made and Letter of Credit Accommodations issued or
caused to be issued by it (and any successor acting as Agent), so long as
Congress shall be a Lender hereunder, it shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include Congress in its individual capacity as Lender
hereunder. Congress (and any successor acting as Agent) and its Affiliates may
(without having to account therefor to any Lender) lend money to, make
investments in and generally engage in any kind of business with Borrowers (and
any of their Subsidiaries or Affiliates) as if it were not acting as Agent, and
Congress and its Affiliates may accept fees and other consideration from any
Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.
12.5 Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrowers hereunder and without limiting any obligations of
Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided, that, no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the party to be indemnified as determined by
a final non-appealable judgment of a court of competent jurisdiction. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on Agent or other Lender, and based
on such documents and
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information as it has deemed appropriate, made its own credit analysis of
Borrowers and Obligors and has made its own decision to enter into this
Agreement and that it will, independently and without reliance upon Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Financing
Agreements. Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower or Obligor of any term or provision of
this Agreement or any of the other Financing Agreements or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Borrower or Obligor. Agent will use reasonable efforts to provide
Lenders with any information received by Agent from any Borrower or Obligor
which is required to be provided to Lenders or deemed to be requested by Lenders
hereunder and with a copy of any Notice of Default or Failure of Condition
received by Agent from any Borrower or any Lender; provided, that, Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent's own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Agent or deemed requested by
Lenders hereunder, Agent shall not have any duty or responsibility to provide
any Lender with any other credit or other information concerning the affairs,
financial condition or business of any Borrower or Obligor that may come into
the possession of Agent.
12.7 Failure to Act. Except for action expressly required of Agent
hereunder and under the other Financing Agreements, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
12.8 Additional Loans. Agent shall not make any Revolving Loans or
provide any Letter of Credit Accommodations to any Borrower on behalf of Lenders
intentionally and with actual knowledge that such Revolving Loans or Letter of
Credit Accommodations would cause the aggregate amount of the total outstanding
Revolving Loans and Letter of Credit Accommodations to such Borrower to exceed
the Borrowing Base of such Borrower, without the prior consent of all Lenders,
except, that, Agent may make such additional Revolving Loans or provide such
additional Letter of Credit Accommodations on behalf of Lenders, intentionally
and with actual knowledge that such Revolving Loans or Letter of Credit
Accommodations will cause the total outstanding Revolving Loans and Letter of
Credit Accommodations to Borrowers to exceed the Borrowing Base, as Agent may
deem necessary or advisable in its discretion, provided, that: (a) the total
principal amount of the additional Revolving Loans or additional Letter of
Credit Accommodations to any Borrower which Agent may make or provide after
obtaining such actual knowledge that the aggregate principal amount of the
Revolving Loans equal or exceed the Borrowing Bases of Borrowers, plus the
amount of Special Agent Advances made pursuant to Section 12.11(a)(ii) hereof
then outstanding, shall not exceed the aggregate amount equal to ten (10%) of
the Maximum Credit and shall not cause the total principal amount of the Loans
and Letter of Credit Accommodations to exceed the Maximum Credit and (b) no
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such additional Revolving Loan or Letter of Credit Accommodation shall be
outstanding more than ninety (90) days after the date such additional Revolving
Loan or Letter of Credit Accommodation is made or issued (as the case may be),
except as the Required Lenders may otherwise agree. Each Lender shall be
obligated to pay Agent the amount of its Pro Rata Share of any such additional
Revolving Loans or Letter of Credit Accommodations.
12.9 Concerning the Collateral and the Related Financing Agreements.
Each Lender authorizes and directs Agent to enter into this Agreement and the
other Financing Agreements. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the terms of this Agreement or the other
Financing Agreements and the exercise by Agent or Required Lenders of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.
12.10 Field Audit, Examination Reports and other Information;
Disclaimer by Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report and report with respect to the Borrowing Base prepared or
received by Agent (each field audit or examination report and report with
respect to the Borrowing Base being referred to herein as a "Report" and
collectively, "Reports"), appraisals with respect to the Collateral and
financial statements with respect Parent and its Subsidiaries received by Agent;
(b) expressly agrees and acknowledges that Agent (i) does not
make any representation or warranty as to the accuracy of any Report, appraisal
or financial statement or (ii) shall not be liable for any information contained
in any Report, appraisal or financial statement;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or any other party performing
any audit or examination will inspect only specific information regarding
Borrowers and Guarantors and will rely significantly upon Borrowers' and
Guarantors' books and records, as well as on representations of Borrowers' and
Guarantors' personnel; and
(d) agrees to keep all Reports confidential and strictly for
its internal use in accordance with the terms of Section 13.5 hereof, and not to
distribute or use any Report in any other manner.
12.11 Collateral Matters.
(a) Agent may, at its option, from time to time, at any time
on or after an Event of Default and for so long as the same is continuing or
upon any other failure of a condition precedent to the Loans and Letter of
Credit Accommodations hereunder, make such disbursements and advances ("Special
Agent Advances") which Agent, in its sole discretion, (i) deems necessary or
desirable either to preserve or protect the Collateral or any portion thereof or
(ii) to enhance the likelihood or maximize the amount of repayment by Borrowers
and
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Guarantors of the Loans and other Obligations, provided, that, the aggregate
principal amount of the Special Agent Advances pursuant to this clause (ii),
plus the then outstanding principal amount of the additional Loans and Letter of
Credit Accommodations which Agent may make or provide as set forth in Section
12.8 hereof, shall not exceed the aggregate amount of ten (10%) percent of the
Maximum Credit or (iii) to pay any other amount chargeable to any Borrower or
Guarantor pursuant to the terms of this Agreement or any of the other Financing
Agreements consisting of (A) costs, fees and expenses payable in accordance with
this Agreement and (B) payments to any issuer of Letter of Credit
Accommodations. Special Agent Advances shall be repayable on demand and together
with all interest thereon shall constitute Obligations secured by the
Collateral. Special Agent Advances shall not constitute Loans but shall
otherwise constitute Obligations hereunder. Interest on Special Agent Advances
shall be payable at the Interest Rate then applicable to Prime Rate Loans and
shall be payable on demand. Without limitation of its obligations pursuant to
Section 6.10, each Lender agrees that it shall make available to Agent, upon
Agent's demand, in immediately available funds, the amount equal to such
Lender's Pro Rata Share of each such Special Agent Advance. If such funds are
not made available to Agent by such Lender, such Lender shall be deemed a
Defaulting Lender and Agent shall be entitled to recover such funds, on demand
from such Lender together with interest thereon for each day from the date such
payment was due until the date such amount is paid to Agent at the Federal Funds
Rate for each day during such period (as published by the Federal Reserve Bank
of New York or at Agent's option based on the arithmetic mean determined by
Agent of the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each of the three leading
brokers of Federal funds transactions in New York City selected by Agent) and if
such amounts are not paid within three (3) days of Agent's demand, at the
highest Interest Rate provided for in Section 3.1 hereof applicable to Prime
Rate Loans.
(b) Lenders hereby irrevocably authorize Agent, at its option
and in its discretion to release any security interest in, mortgage or lien
upon, any of the Collateral (i) upon termination of the Commitments and payment
and satisfaction of all of the Obligations and delivery of cash collateral to
the extent required under Section 13.1 below, or (ii) constituting property
being sold or disposed of if Administrative Borrower Representative or any
Borrower or Guarantor certifies to Agent that the sale or disposition is made in
compliance with Section 9.7 hereof (and Agent may rely conclusively on any such
certificate, without further inquiry), or (iii) constituting property in which
any Borrower or Guarantor did not own an interest at the time the security
interest, mortgage or lien was granted or at any time thereafter, or (iv) having
a value in the aggregate in any twelve (12) month period of less than
$1,500,000, and to the extent Agent may release its security interest in and
lien upon any such Collateral pursuant to the sale or other disposition thereof,
such sale or other disposition shall be deemed consented to by Lenders, or (v)
if required or permitted under the terms of any of the other Financing
Agreements, including any intercreditor agreement, or (vi) approved, authorized
or ratified in writing by all of Lenders. Except as provided above, Agent will
not release any security interest in, mortgage or lien upon, any of the
Collateral without the prior written authorization of all of Lenders. Upon
request by Agent at any time, Lenders will promptly confirm in writing Agent's
authority to release particular types or items of Collateral pursuant to this
Section.
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(c) Without any manner limiting Agent's authority to act
without any specific or further authorization or consent by the Required
Lenders, each Lender agrees to confirm in writing, upon request by Agent, the
authority to release Collateral conferred upon Agent under this Section. Agent
shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the security interest,
mortgage or liens granted to Agent upon any Collateral to the extent set forth
above; provided, that, (i) Agent shall not be required to execute any such
document on terms which, in Agent's opinion, would expose Agent to liability or
create any obligations or entail any consequence other than the release of such
security interest, mortgage or liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any security interest, mortgage or lien upon (or obligations of any Borrower or
Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.
(d) Agent shall have no obligation whatsoever to any Lender or
any other Person to investigate, confirm or assure that the Collateral exists or
is owned by any Borrower or Guarantor or is cared for, protected or insured or
has been encumbered, or that any particular items of Collateral meet the
eligibility criteria applicable in respect of the Loans or Letter of Credit
Accommodations hereunder, or whether any particular reserves are appropriate, or
that the liens and security interests granted to Agent pursuant hereto or any of
the Financing Agreements or otherwise have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent in this Agreement
or in any of the other Financing Agreements, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related thereto,
subject to the other terms and conditions contained herein, Agent may act in any
manner it may deem appropriate, in its discretion, given Agent's own interest in
the Collateral as a Lender and that Agent shall have no duty or liability
whatsoever to any other Lender.
12.12 Agency for Perfection. Each Lender hereby appoints Agent and each
other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral of Agent in assets which, in
accordance with Article 9 of the UCC can be perfected only by possession (or
where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender hereby
acknowledges that it holds possession of any such Collateral for the benefit of
Agent as secured party. Should any Lender obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
12.13 Successor Agent. Agent may resign as Agent upon thirty (30) days'
notice to Lenders and Administrative Borrower Representative. If Agent resigns
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor agent for Lenders. If no successor agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with Lenders and Administrative Borrower Representative, a successor agent from
among Lenders. Upon the acceptance by the Lender so selected of its appointment
as
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successor agent hereunder, such successor agent shall succeed to all of the
rights, powers and duties of the retiring Agent and the term "Agent" as used
herein and in the other Financing Agreements shall mean such successor agent and
the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 12 shall inure to its benefit as to any actions taken
or omitted by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is thirty (30) days after
the date of a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nonetheless thereupon become effective and Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
13.1 Term.
(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the date five (5) years
from the date hereof (the "Renewal Date"), and from year to year thereafter,
unless sooner terminated pursuant to the terms hereof. Agent may, at its option
(or shall at the direction of any Lender in writing received by Agent at least
ninety (90) days prior to the Renewal Date or the anniversary of any Renewal
Date, as the case may be), terminate this Agreement and the other Financing
Agreements, or Administrative Borrower Representative or any Borrower may
terminate this Agreement and the other Financing Agreements, each case,
effective on the Renewal Date or on the anniversary of the Renewal Date in any
year by giving to the other party at least sixty (60) days prior written notice;
provided, that, this Agreement and all other Financing Agreements must be
terminated simultaneously. In addition, Borrowers may terminate this Agreement
at any time upon not less than five (5) Business Days prior written notice to
Agent (which notice shall be irrevocable) and Agent may, at its option, and
shall at the direction of Required Lenders, by written notice to Administrative
Borrower Representative terminate this Agreement at any time on or after an
Event of Default. Upon the Renewal Date or any other effective date of
termination of the Financing Agreements, Borrowers shall pay to Agent all
outstanding and unpaid Obligations and shall furnish cash collateral to Agent
(or at Agent's option, a letter of credit issued for the account of Borrowers
and at Borrowers' expense, in form and substance satisfactory to Agent, by an
issuer acceptable to Agent and payable to Agent as beneficiary) in such amounts
as Agent determines are reasonably necessary to secure Agent and Lenders from
loss, cost, damage or expense, including reasonable attorneys' fees and expenses
(limited to one (1) outside counsel to Agent and Lenders so long as no Default
or Event of Default has occurred and is continuing), in connection with any
contingent Obligations, including issued and outstanding Letter of Credit
Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which Agent or any Lender has not yet received final
and indefeasible payment and any continuing obligations of Agent or any Lender
pursuant to any Deposit Account Control Agreement. The amount of such cash
collateral (or letter of credit, as Agent may determine) as to any Letter of
Credit Accommodations shall be in the amount equal to one hundred five (105%)
percent of the amount of the Letter of Credit Accommodations plus the amount of
any fees and expenses payable in
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connection therewith through the end of the latest expiration date of such
Letter of Credit Accommodations. Such payments in respect of the Obligations and
cash collateral shall be remitted by wire transfer in Federal funds to the Agent
Payment Account or such other bank account of Agent, as Agent may, in its
discretion, designate in writing to Administrative Borrower Representative for
such purpose. Interest shall be due until and including the next Business Day,
if the amounts so paid by Borrowers to the Agent Payment Account or other bank
account designated by Agent are received in such bank account later than 1:00
p.m., Chicago time.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge any Borrower or Guarantor of its
respective duties, obligations and covenants under this Agreement or the other
Financing Agreements until all Obligations have been fully and finally
discharged and paid, and Agent's continuing security interest in the Collateral
and the rights and remedies of Agent and Lenders hereunder, under the other
Financing Agreements and applicable law, shall remain in effect until all such
Obligations have been fully and finally discharged and paid. Accordingly, each
Borrower and Guarantor waives any rights it may have under the UCC to demand the
filing of termination statements with respect to the Collateral and Agent shall
not be required to send such termination statements to Borrowers or Guarantors,
or to file them with any filing office, unless and until this Agreement shall
have been terminated in accordance with its terms and all Obligations paid and
satisfied in full in immediately available funds.
(c) If for any reason this Agreement is terminated prior to
the Renewal Date, in view of the impracticality and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of Agent's and each Lender's lost profits as a result
thereof, Borrowers agree to pay to Agent, for the benefit of Lenders, upon the
effective date of such termination, an early termination fee in the amount equal
to
Amount Period
------ ------
(i) 1% of Maximum Credit From the date hereof to and including the first
anniversary of the date hereof
(ii) .50% of Maximum Credit From and after the first anniversary of the date
hereof to and including the second anniversary of the
date hereof
(iii) .25% of Maximum Credit From and after the second anniversary of the date
hereof to and including any time prior to the end of
the then current term.
Such early termination fee shall be presumed to be the amount of damages
sustained by Agent and Lenders as a result of such early termination and
Borrowers and Guarantors agree that it is reasonable under the circumstances
currently existing. In addition, Agent and Lenders shall be
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entitled to such early termination fee upon the occurrence of any Event of
Default described in Sections 10.1(g) and 10.1(h) hereof, even if Agent and
Lenders do not exercise the right to terminate this Agreement, but elect, at
their option, to provide financing to any Borrower or permit the use of cash
collateral under the United States Bankruptcy Code. The early termination fee
provided for in this Section 13.1(c) shall be deemed included in the
Obligations.
(d) Notwithstanding anything to contrary contained in Section
13.1(c) above, in the event of the termination of the Financing Agreements by
Borrowers prior to the end of the then current term or renewal term of the
Financing Agreements and the full and final repayment of all of the Obligations
of Borrowers and Guarantors to Agent and Lenders and receipt by Agent of cash
collateral for contingent Obligations in accordance with this Agreement from the
proceeds of initial loans and advances to Borrowers pursuant to a credit
facility provided by Wachovia Bank, National Association or its affiliates (or
for which Wachovia Bank, National Association or any of its affiliates is acting
as agent) to Borrowers to replace the financing arrangements provided for
herein, then, solely in such event, Borrowers shall not be required to pay the
early termination fee provided for in Section 13.1(c) above.
13.2 Interpretative Provisions.
(a) All terms used herein which are defined in Article 1,
Article 8 or Article 9 of the UCC shall have the meanings given therein unless
otherwise defined in this Agreement.
(b) All references to the plural herein shall also mean the
singular and to the singular shall also mean the plural unless the context
otherwise requires.
(c) All references to any Borrower, Guarantor, Agent and
Lenders pursuant to the definitions set forth in the recitals hereto, or to any
other person herein, shall include their respective successors and assigns.
(d) The words "hereof", "herein", "hereunder", "this
Agreement" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement
and as this Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(e) The word "including" when used in this Agreement shall
mean "including, without limitation" and the word "will" when used in this
Agreement shall be construed to have the same meaning and effect as the word
"shall".
(f) An Event of Default shall exist or continue or be
continuing until such Event of Default is waived in accordance with Section 11.3
or is cured in a manner satisfactory to Agent, if such Event of Default is
capable of being cured as determined in good faith by Agent.
(g) All references to the term "good faith" used herein when
applicable to Agent or any Lender shall mean, notwithstanding anything to the
contrary contained herein or in the UCC, honesty in fact in the conduct or
transaction concerned and the observance of reasonable commercial standards of
fair dealing based on how an asset based revolving lender with similar
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rights providing a credit agreement of the type set forth herein would act in
similar circumstances at the time with the information then available to it.
(h) Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations hereunder shall be computed
unless otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as used
in the preparation of the financial statements of Parent most recently received
by Agent prior to the date hereof. Notwithstanding anything to the contrary
contained in GAAP or any interpretations or other pronouncements by the
Financial Accounting Standards Board or otherwise, the term "unqualified
opinion" as used herein to refer to opinions or reports provided by accountants
shall mean an opinion or report that is unqualified and also does not include
any explanation, supplemental comment or other comment concerning the ability of
the applicable person to continue as a going concern or the scope of the audit.
(i) 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".
(j) Unless otherwise expressly provided herein, (i) references
herein to any agreement, document or instrument shall be deemed to include all
subsequent amendments, modifications, supplements, extensions, renewals,
restatements or replacements with respect thereto, but only to the extent the
same are not prohibited by the terms hereof or of any other Financing Agreement,
and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, recodifying, supplementing or interpreting the statute or regulation.
(k) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(l) This Agreement and other Financing Agreements may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(m) This Agreement and the other Financing Agreements are the
result of negotiations among and have been reviewed by counsel to Agent and the
other parties, and are the products of all parties. Accordingly, this Agreement
and the other Financing Agreements shall not be construed against Agent or
Lenders merely because of Agent's or any Lender's involvement in their
preparation.
(n) When the payment of any obligation or the performance of
any covenant, duty or obligation is stated to be due or performance required on
a day which is not a Business Day, the date of such payment or performance shall
extend to the immediately succeeding Business Day.
123
13.3 Notices. All notices, requests and demands hereunder shall be in
writing and deemed to have been given or made: if delivered in person,
immediately upon delivery; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
Business Day, one (1) Business Day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such
other address as any party may designate by notice in accordance with this
Section):
If to Administrative Borrower International Wire Group, Inc.
Representative or any Borrower ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
or Guarantor: ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with a courtesy (and not ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
obligatory) copy to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Agent: Congress Financial Corporation
(Central)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Regional Portfolio Manager
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
13.4 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13.5 Confidentiality.
(a) Agent and each Lender shall use all reasonable efforts to
keep confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by any Borrower pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by such Borrower to Agent or such Lender, provided, that, nothing
contained herein shall limit the disclosure of any such information: (i) to the
extent required by
124
statute, rule, regulation, subpoena or court order, (ii) to bank examiners and
other regulators, auditors and/or accountants, (iii) in connection with any
litigation to which Agent or such Lender is a party, (iv) to any Lender or
Participant (or prospective Lender or Participant) or to any Affiliate of any
Lender so long as such Lender or Participant (or prospective Lender or
Participant) or Affiliate shall have been instructed in writing to treat such
information as confidential in accordance with this Section 13.5, or (v) to
counsel for Agent or any Lender or Participant (or prospective Lender or
Participant).
(b) In the event that Agent or any Lender receives a request
or demand to disclose any confidential information pursuant to any subpoena or
court order, Agent or such Lender, as the case may be, agrees (i) to the extent
permitted by applicable law or if permitted by applicable law, to the extent
Agent or such Lender determines in good faith that it will not create any risk
of liability to Agent or such Lender, Agent or such Lender will promptly notify
Administrative Borrower Representative of such request so that Administrative
Borrower Representative may seek a protective order or other appropriate relief
or remedy and (ii) if disclosure of such information is required, disclose such
information and, subject to reimbursement by Borrowers of Agent's or such
Lender's expenses, cooperate with Administrative Borrower Representative in the
reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such portion of the disclosed
information which Administrative Borrower Representative so designates, to the
extent permitted by applicable law or if permitted by applicable law, to the
extent Agent or such Lender determines in good faith that it will not create any
risk of liability to Agent or such Lender.
(c) In no event shall this Section 13.5 or any other provision
of this Agreement, any of the other Financing Agreements or applicable law be
deemed: (i) to apply to or restrict disclosure of information that has been or
is made public by any Borrower, Guarantor or any third party or otherwise
becomes generally available to the public other than as a result of a disclosure
in violation hereof or, to the knowledge of Agent or any Lender, in violation of
any other confidentiality obligation of such third party, (ii) to apply to or
restrict disclosure of information that was or becomes available to Agent or any
Lender (or any Affiliate of any Lender) on a non-confidential basis from a
person other than a Borrower or Guarantor, other than from a Person known to
Agent and/or Lenders to be subject to a confidentiality obligation, (iii) to
require Agent or any Lender to return any materials furnished by a Borrower or
Guarantor to Agent or a Lender or prevent Agent or a Lender from responding to
routine informational requests in accordance with the Code of Ethics for the
Exchange of Credit Information promulgated by The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates or
other applicable industry standards relating to the exchange of credit
information. The obligations of Agent and Lenders under this Section 13.5 shall
supersede and replace the obligations of Agent and Lenders under any
confidentiality letter signed prior to the date hereof or any other written
arrangements concerning the confidentiality of information provided by any
Borrower or Guarantor to Agent or any Lender.
13.6 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agent, Lenders, Borrowers, Guarantors and
their respective successors and assigns, except that Borrowers may not assign
their rights under this Agreement, the other
125
Financing Agreements and any other document referred to herein or therein
without the prior written consent of Agent and Lenders, except as otherwise
provided herein. Any such purported assignment without such express prior
written consent shall be void. No Lender may assign its rights and obligations
under this Agreement without the prior written consent of Agent, except as
provided in Section 13.7 below. The terms and provisions of this Agreement and
the other Financing Agreements are for the purpose of defining the relative
rights and obligations of Borrowers, Guarantors, Agent and Lenders with respect
to the transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.
13.7 Assignments; Participations.
(a) Each Lender may, with the prior written consent of Agent,
assign all or, if less than all, a portion equal to at least $10,000,000 in the
aggregate for the assigning Lender, of such rights and obligations under this
Agreement to one or more Eligible Transferees (but not including for this
purpose any assignments in the form of a participation), each of which assignees
shall become a party to this Agreement as a Lender by execution of an Assignment
and Acceptance; provided, that, (i) such transfer or assignment will not be
effective until recorded by Agent on the Register and (ii) Agent shall have
received for its sole account payment of a processing fee from the assigning
Lender or the assignee in the amount of $5,000.
(b) Agent (acting for this purpose as agent for the Borrowers
but without any liability to Borrowers or Guarantors) shall maintain a register
of the names and addresses of Lenders, their Commitments and the principal
amount of their Loans and the other Obligations (the "Register"); provided, that
in the case of an assignment or delegation covered by Section 13.7(a) hereof,
which is not reflected in the Register, each such assigning Lender (acting for
this purpose as an agent of Borrowers but without any liability to Borrowers or
Guarantors) shall maintain a comparable register (the "Lender Register") and
each such assigning Lender shall collect from each such assignee certificates
and statements described in Section 6.11 (and updated as required by Section
6.11) hereof as if such assignee were a Lender under Section 6.11 hereof. Agent
shall also maintain a copy of each Assignment and Acceptance delivered to and
accepted by it and shall modify the Register to give effect to each Assignment
and Acceptance. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and any Borrowers, Obligors, Agent and
Lenders may treat each Person whose name is recorded in the Register and the
Lender Register as a Lender hereunder for all purposes of this Agreement. The
Register and the Lender Register shall be available for inspection by
Administrative Borrower Representative and any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(c) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
the assignee thereunder shall be a party hereto and to the other Financing
Agreements and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations (including, without limitation, the obligation to participate in
Letter of Credit Accommodations) of a Lender hereunder and thereunder and the
assigning Lender shall, to the
126
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement.
(d) By execution and delivery of an Assignment and Acceptance,
the assignor and assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any of the other Financing Agreements or the execution, legality,
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Financing Agreements furnished pursuant hereto, (ii) the assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower, Obligor or any of their
Subsidiaries or the performance or observance by any Borrower or Obligor of any
of the Obligations; (iii) such assignee confirms that it has received a copy of
this Agreement and the other Financing Agreements, together with such other
documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance, (iv) such
assignee will, independently and without reliance upon the assigning Lender,
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Financing Agreements, (v) such
assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Financing
Agreements as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Financing
Agreements are required to be performed by it as a Lender. Agent and Lenders may
furnish any information concerning any Borrower or Obligor in the possession of
Agent or any Lender from time to time to assignees and Participants.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Financing Agreements (including, without
limitation, all or a portion of its Commitments and the Loans owing to it and
its participation in the Letter of Credit Accommodations, without the consent of
Agent or the other Lenders); provided, that, (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitment hereunder) and the
other Financing Agreements shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and Borrowers, Guarantors, the other Lenders and Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Financing
Agreements, and (iii) the Participant shall not have any rights under this
Agreement or any of the other Financing Agreements (the Participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the Participant relating
thereto) and all amounts payable by any Borrower or Obligor hereunder shall be
determined as if such Lender had not sold such participation. Borrowers and
Guarantors agree that each Participant shall be entitled to the benefits of
Sections 6.4 and 6.11 to the same extent as if it
127
were a Lender and had acquired an interest by assignment pursuant to paragraph
(a) of this Section 13.7. A Participant shall not be entitled to receive any
greater payment under Sections 6.4 and 6.11 than the applicable Lender (or
Transferee) would have been entitled to receive with respect to the
participation sold to such Participant. In order to be eligible for the benefits
under Sections 6.4 and 6.11, such Participant must comply with Section 6.11(d)
or (g), whichever is applicable, as though it were a Lender.
(f) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lenders from such Federal Reserve Bank; provided, that,
no such pledge shall release such Lender from any of its obligations hereunder
or substitute any such pledgee for such Lender as a party hereto.
(g) Borrowers and Guarantors shall assist Agent or any Lender
permitted to sell assignments or participations under this Section 13.7 in
whatever manner reasonably necessary in order to enable or effect any such
assignment or participation, including (but not limited to) the execution and
delivery of any and all agreements, notes and other documents and instruments as
shall be requested and the delivery of informational materials, appraisals or
other documents for, and the participation of relevant management in meetings
and conference calls with, potential Lenders or Participants. Borrowers shall
certify the correctness, completeness and accuracy, in all material respects, of
all descriptions of Borrowers and Guarantors and their affairs provided,
prepared or reviewed by any Borrower or Guarantor that are contained in any
selling materials and all other information provided by it and included in such
materials.
13.8 Entire Agreement. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
13.9 USA Patriot Act. Each Lender hereby notifies Borrowers that
pursuant to the requirements of the USA Patriot Act, it is required to obtain,
verify and record information that identifies Borrower, which information
includes the name and address of Borrowers and other information that will allow
such Lender to identify Borrower in accordance with the requirements of such Act
and any other applicable law.
13.10 Counterparts, Etc. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such agreement by telefacsimile shall also deliver an original executed
128
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.
[SIGNATURE PAGES FOLLOW]
129
IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have
caused these presents to be duly executed as of the day and year first above
written.
BORROWERS
INTERNATIONAL WIRE ROME
OPERATIONS, INC.
OMEGA WIRE, INC.
OWI CORPORATION
IWG RESOURCES, LLC
CAMDEN WIRE CO., INC.
WIRE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer of each
GUARANTOR
INTERNATIONAL WIRE GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
AGENT:
CONGRESS FINANCIAL CORPORATION
(CENTRAL), as Agent
By: /s/ [ILLEGIBLE]
---------------------------------------
Title: S.V.P.
------------------------------------
LENDER
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By: /s/ [ILLEGIBLE]
---------------------------------------
Title: S.V.P.
------------------------------------
Commitment: $110,000,000
EXHIBIT A
to
LOAN AND SECURITY AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of _____________, 200_ is made between
________________________ (the "Assignor") and ____________________ (the
"Assignee").
WITNESSETH:
WHEREAS, Congress Financial Corporation (Central), in its capacity as
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on
behalf of the financial institutions which are parties thereto as lenders (in
such capacity, "Agent"), and the financial institutions which are parties to the
Loan Agreement as lenders (individually, each a "Lender" and collectively,
"Lenders") have entered or are about to enter into financing arrangements
pursuant to which Agent and Lenders may make loans and advances and provide
other financial accommodations to Omega Wire, Inc., International Wire Rome
Operations, Inc., OWI Corporation, Camden Wire Co., Inc., IWG Resources, LLC and
Wire Technologies, Inc. (collectively, "Borrowers") as set forth in the
Loan and
Security Agreement, dated October 20, 2004, by and among Borrowers, certain of
their affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"; capitalized terms used but not otherwise defined herein shall
have the meanings assigned to them in the Loan Agreement), and the other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements");
WHEREAS, as provided under the Loan Agreement, Assignor committed to
making Loans (the "Committed Loans") to Borrowers in an aggregate amount not to
exceed $___________ (the "Commitment");
WHEREAS, Assignor wishes to assign to Assignee [part of the] [all]
rights and obligations of Assignor under the Loan Agreement in respect of its
Commitment in an amount equal to $______________ (the "Assigned Commitment
Amount") on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, Assignor hereby sells, transfers and assigns to Assignee, and
Assignee hereby purchases, assumes and undertakes from Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) an interest in (i) the Commitment and each of the
Committed Loans of Assignor and (ii) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the
Loan Agreement and the other Financing Agreements, so that after giving effect
thereto, the Commitment of Assignee shall be as set forth below and the Pro Rata
Share of Assignee shall be _______ (__%) percent.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), Assignee shall be a party to the Loan Agreement and succeed
to all of the rights and be obligated to perform all of the obligations of a
Lender under the Loan Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Commitment Amount. Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Commitment of Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Commitment Amount
and Assignor shall relinquish its rights and be released from its obligations
under the Loan Agreement to the extent such obligations have been assumed by
Assignee; provided, that, Assignor shall not relinquish its rights under
Sections 2.2(f), 6.4, 6.8, 11.5 and 12.5 of the Loan Agreement to the extent
such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date Assignee's Commitment will be
$_____________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date Assignor's Commitment will be
$______________ (as such amount may be further reduced by any other assignments
by Assignor on or after the date hereof).
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, Assignee shall pay to Assignor on the
Effective Date in immediately available funds an amount equal to $____________,
representing Assignee's Pro Rata Share of the principal amount of all Committed
Loans.
(b) Assignee shall pay to Agent the processing fee in the
amount specified in Section 13.7(a) of the Loan Agreement.
3. Reallocation of Payments. Any interest, fees and other payments
accrued to the Effective Date with respect to the Commitment, Committed Loans
and outstanding Letter of Credit Accommodations shall be for the account of
Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Commitment
2
Amount shall be for the account of Assignee. Each of Assignor and Assignee
agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt.
4. Independent Credit Decision. Assignee acknowledges that it has
received a copy of the Loan Agreement and the Schedules and Exhibits thereto,
together with copies of the most recent financial statements of International
Wire Group, Inc. and its Subsidiaries, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis and
decision to enter into this Assignment and Acceptance and agrees that it will,
independently and without reliance upon Assignor, Agent or any Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Loan Agreement.
5. Effective Date; Notices.
(a) As between Assignor and Assignee, the effective date for
this Assignment and Acceptance shall be _______________, 200_ (the "Effective
Date"); provided, that, the following conditions precedent have been satisfied
on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed
and delivered by Assignor and Assignee;
(ii) the consent of Agent [and Borrowers] [IF
REQUIRED BY DEFINITION OF ELIGIBLE TRANSFEREE] as required for an effective
assignment of the Assigned Commitment Amount by Assignor to Assignee shall have
been duly obtained and shall be in full force and effect as of the Effective
Date;
(iii) written notice of such assignment, together
with payment instructions, addresses and related information with respect to
Assignee, shall have been given to Administrative Borrower Representative and
Agent;
(iv) Assignee shall pay to Assignor all amounts due
to Assignor under this Assignment and Acceptance; and
(v) the processing fee referred to in Section 2(b)
hereof shall have been paid to Agent.
(b) Promptly following the execution of this Assignment and
Acceptance, Assignor shall deliver to Administrative Borrower Representative and
Agent for acknowledgment by Agent, a Notice of Assignment in the form attached
hereto as Schedule 1.
6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]
(a) Assignee hereby appoints and authorizes Assignor in its
capacity as Agent to take such action as agent on its behalf to exercise such
powers under the Loan Agreement as are
3
delegated to Agent by Lenders pursuant to the terms of the Loan Agreement.
(b) Assignee shall assume no duties or obligations held by
Assignor in its capacity as Agent under the Loan Agreement.]
7. Withholding Tax. Assignee (a) represents and warrants to Assignor,
Agent and Borrowers that under applicable law and treaties no amount of tax will
be required to be withheld by Assignor, Agent or Borrowers with respect to any
payments to be made to Assignee hereunder or under any of the Financing
Agreements which is greater than the amount of tax which would be required to be
withheld by such persons if payment were made to Assignor, (b) agrees to furnish
(if it is organized under the laws of any jurisdiction other than the United
States or any State thereof) to Agent and Administrative Borrower prior to the
time that Agent or Borrowers are required to make any payment of principal,
interest or fees hereunder, duplicate properly completed and duly executed
originals of either U.S. Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY,
as applicable (wherein Assignee claims entitlement to a complete exemption from
U.S. federal income withholding tax on all payments hereunder) and agrees to
provide such new forms upon the expiration, obsolescence or invalidity of any
previously delivered form or comparable statements in accordance with applicable
U.S. law and regulations and amendments thereto, duly executed and completed by
Assignee in accordance with the requirements of the Loan Agreement, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any security interest, lien, encumbrance or
other adverse claim, (ii) it is duly organized and existing and it has the full
power and authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment
and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance, and apart from any agreements or undertakings
or filings required by the Loan Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance, and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignor, enforceable against Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or any of the other Financing
Agreements or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other instrument
4
or document furnished pursuant thereto. Assignor makes no representation or
warranty in connection with, and assumes no responsibility with respect to, the
solvency, financial condition or statements of Borrowers, Guarantors or any of
their respective Affiliates, or the performance or observance by Borrowers,
Guarantors or any other Person, of any of its respective obligations under the
Loan Agreement or any other instrument or document furnished in connection
therewith.
(c) Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder, (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the Loan Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; and (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignee, enforceable against Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights to general equitable principles.
9. Term Loan Intercreditor Agreement; New Notes Intercreditor
Agreement. Assignee acknowledges and agrees that it has received a copy of each
of the Term Loan Intercreditor Agreement and the New Notes Intercreditor
Agreement (collectively, the "Intercreditor Agreement") and that it shall be
bound by the terms hereof as a Working Capital Lender as such term is defined in
each Intercreditor Agreement (including without limitation, the obligations of
Working Capital Lenders under Section 3 of the Term Loan Intercreditor Agreement
with respect to the purchase option in favor of Term Loan Agent on behalf of
Term Loan Lenders) and Assignee shall be deemed to make all representations and
warranties made by a Working Capital Lender in each Intercreditor Agreement.
Without limiting any other rights or authorization of Agent, Assignee hereby
specifically authorizes Agent to take such actions as are provided for to be
taken by it under the terms of each Intercreditor Agreement on behalf of
Assignee as a Working Capital Lender.
10. Further Assurances. Assignor and Assignee each hereby agree to
execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to Borrowers or Agent, which may be
required in connection with the assignment and assumption contemplated hereby.
11. Miscellaneous
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in
5
exercising any right, power or privilege hereunder shall operate as a waiver
thereof and any waiver of any breach of the provisions of this Assignment and
Acceptance shall be without prejudice to any rights with respect to any other
for further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) Assignor and Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Assignment and Acceptance by facsimile shall be equally
effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Assignor and
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in New York County, New York over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State or Federal court. Each party to
this Assignment and Acceptance hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.
(f) ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING
AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance to be executed and delivered by their duly authorized officers as
of the date first above written.
[ASSIGNOR]
By:
----------------------------------------
Title:
-------------------------------------
[ASSIGNEE]
By:
----------------------------------------
Title:
-------------------------------------
[BORROWERS] [IF REQUIRED BY DEFINITION OF
ELIGIBLE TRANSFEREE]
By:
----------------------------------------
Title:
-------------------------------------
6
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___, 2004
Attn.:
------------------------------
Re: International Wire Group, Inc. and Subsidiaries
Ladies and Gentlemen:
Congress Financial Corporation (Central), in its capacity as agent
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the financial institutions which are parties thereto as lenders (in such
capacity, "Agent"), and the financial institutions which are parties to the Loan
Agreement as lenders (individually, each a "Lender" and collectively, "Lenders")
have entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Omega Wire, Inc., International Wire Rome Operations, Inc.,
OWI Corporation, Camden Wire Co., Inc., IWG Resources, LLC and Wire
Technologies, Inc. (collectively, "Borrowers") as set forth in the
Loan and
Security Agreement, dated October 20, 2004, by and among Borrowers, certain of
their affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"), and the other agreements, documents and instruments referred
to therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
"Financing Agreements"). Capitalized terms not otherwise defined herein shall
have the respective meanings ascribed thereto in the Loan Agreement.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________________ (the "Assignor") to
___________________________ (the "Assignee") such that after giving effect to
the assignment Assignee shall have an interest equal to ________ (__%) percent
of the total Commitments pursuant to the Assignment and Acceptance Agreement
attached hereto (the "Assignment and Acceptance"). We understand that the
Assignor's Commitment shall be reduced by $_____________, as the same may be
further reduced by other assignments on or after the date hereof.
2. Assignee agrees that, upon receiving the consent of Agent to such
assignment, Assignee will be bound by the terms of the Loan Agreement as fully
and to the same extent as if the Assignee were the Lender originally holding
such interest under the Loan Agreement.
3. The following administrative details apply to Assignee:
(A) Notice address:
Assignee name:__________________________________________
1
Address:________________________________________________
Attention:______________________________________________
Telephone:______________________________________________
Telecopier:_____________________________________________
(B) Payment instructions:
Account No.:__________________________________________________
At:___________________________________________________________
Reference:____________________________________________________
Attention:____________________________________________________
▇.▇▇▇ are entitled to rely upon the representations, warranties and
covenants of each of Assignor and Assignee contained in the Assignment and
Acceptance.
2
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
----------------------------------
Title:
-------------------------------
[NAME OF ASSIGNEE]
By:
----------------------------------
Title:
-------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
CONGRESS FINANCIAL CORPORATION
(CENTRAL), as Agent
By:
-----------------------------------------
Title:
--------------------------------------
3
EXHIBIT C
TO
LOAN AND SECURITY AGREEMENT
Compliance Certificate
To: Congress Financial Corporation
(Central), as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned hereby certifies to you in [his/her] capacity as an
officer of International Wire Group, Inc., and not individually, pursuant to
Section 9.6 of the Loan Agreement (as defined below) as follows:
1. I am the duly elected Chief Financial Officer of International Wire
Group, Inc., a Delaware corporation ("Parent"). Capitalized terms used herein
without definition shall have the meanings given to such terms in the
Loan and
Security Agreement, dated October 20, 2004, by and among Congress Financial
Corporation (Central) as agent for the financial institutions party thereto as
lenders (in such capacity, "Agent") and the financial institutions party thereto
as lenders (collectively, "Lenders"), Borrowers, Parent and certain of their
affiliates (as such
Loan and Security Agreement is amended, modified or
supplemented, from time to time, the "Loan Agreement").
2. I have reviewed the terms of the Loan Agreement, and have made, or
have caused to be made under my supervision, a review in reasonable detail of
the transactions and the financial condition of Borrowers and Guarantors, during
the immediately preceding fiscal month.
3. The review described in Section 2 above did not disclose the
existence during or at the end of such fiscal month, and I have no actual
knowledge of the existence and continuance on the date hereof, of any condition
or event which constitutes a Default or an Event of Default, except as set forth
on Schedule I attached hereto. Described on Schedule I attached hereto are the
exceptions, if any, to this Section 3 listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
any Borrower or Guarantor has taken, is taking, or proposes to take with respect
to such condition or event.
4. I further certify that, based on the review described in Section 2
above, no Borrower or Guarantor has at any time during or at the end of such
fiscal month, except as specifically described on Schedule II attached hereto or
as permitted by the Loan Agreement, done any of the following:
(a) Changed its respective corporate name, or transacted business
under any trade name, style, or fictitious name, other than
those previously described to you and set forth in the
Financing Agreements.
C-1
(b) Changed the location of its chief executive office, changed
its jurisdiction of incorporation, changed its type of
organization or changed the location of or disposed of any of
its properties or assets (other than pursuant to the sale of
Inventory in the ordinary course of its business or as
otherwise permitted by Section 9.7 of the Loan Agreement), or
established any new asset locations.
(c) Permitted or suffered to exist any security interest in or
liens on any of its properties, whether real or personal,
other than as specifically permitted in the Financing
Agreements.
(d) Received any notice or obtained knowledge of any of the
following not previously disclosed to Agent which could be
expected to result in any Borrower or Guarantor incurring
material liability (as described in Section 9.3(b)) arising
from: (i) the occurrence of any event involving the release,
spill or discharge of any Hazardous Material in violation of
applicable Environmental Law, or (ii) any investigation,
proceeding, complaint, order, directive, claims, citation or
notice with respect to: (A) any non-compliance with or
violation of any applicable Environmental Law by any Borrower
or Guarantor, or (B) the release, spill or discharge of any
Hazardous Material in violation of applicable Environmental
Law, or (C) the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal
of any Hazardous Materials in violation of applicable
Environmental Laws, or (D) any other environmental, health or
safety matter, which has a material adverse effect on any
Borrower or Guarantor or its business, operations or assets or
any properties at which such Borrower or Guarantor
transported, stored or disposed of any Hazardous Materials.
(e) Become aware of, obtained knowledge of, or received
notification of, any breach or violation of any material
covenant contained in any instrument or agreement in respect
of Indebtedness for money borrowed by any Borrower or
Guarantor.
5. Attached hereto as Schedule III are the calculations used in
determining, as of the end of such fiscal month whether (a) a Covenant
Compliance Trigger has occurred and (b) if a Covenant Compliance Trigger has
occurred, Borrowers and Guarantors are in compliance with the covenants set
forth in Section 9.17 of the Loan Agreement for such fiscal month.
C-2
The foregoing certifications are made and delivered this day of
___________, 200_.
Very truly yours,
INTERNATIONAL WIRE GROUP, INC.
By:
----------------------------------
Title:
-------------------------------
C-3
SCHEDULE 9.17
TO
LOAN AND SECURITY AGREEMENT
